The Future of Supply Chain Management: What the Medtech Industry Can Learn from the Aerospace Industry?

Transcription

1 The Future of Supply Chain Management: What the Medtech Industry Can Learn from the Aerospace Industry? 26 June 2013 Joseph G Pinto Executive Vice-President & COO Performance Review Institute 1

2 Today s Presenter 2 Joseph G Pinto Executive Vice President & Chief Operating Officer Jpinto@sae.org

3 Agenda 3 Introduction and Performance Review Institute (PRI) Overview Aerospace Industry Approach to Supply Chain Oversight Why is Supply Chain Oversight so Relevant to the Medical Device Industry now? Medical Devices: the story so far

4 About PRI 4 PRI is a global provider of customer focused solutions designed to improve process and product quality by adding value, reducing total cost and promoting collaboration among stakeholders in industries where safety and quality are shared goals. PRI exists to provide quality oversight and supply chain management solutions for critical manufacturing processes in industries where excellence in quality and safety are not just shared industry goals, but prerequisites to a successful global organization. PRI is a not-for-profit affiliate of SAE International and is led by a Board of Directors with responsibility for strategic direction and financial stability.

5 Established PRI Programs 5 Accreditation (Qualification) Product Qualification Professional Development Management Systems Special Process, System and Product Qualification Qualified Products List is similar to Nadcap. Focuses on Products rather than processes. Industry Managed Provides personnel qualification, developed and managed by industry. Improves the quality of personnel, products and processes through public and onsite training classes and memberships. ANAB approved Registrar committed to improving the quality of: Personnel, Products & Processes AS9100, ISO9000, ISO14001 Complementary

6 Aerospace Industry Approach to Supply Chain Oversight 6

7 Nadcap Definition 7 The leading, worldwide industry-managed cooperative program of major companies designed to manage a cost effective consensus approach to special processes/products and provide continual improvement within the aerospace industry. Compliance Control Cost Savings Risk Reduction

8 Nadcap - Regulatory Requirements & Acceptance 8 Federal Aviation Administration European Aviation Safety Agency Order A - Production Approval Holder Use of Other-Parties to Supplement Their Supplier Control Program Other-party registration is a method whereby a supplier contracts with an appropriately recognized or accredited other-party for the purpose of obtaining a registration. The recognized or accredited other-party organization is normally a professional society, such as the Society of Automotive Engineers, the National Aerospace and Defense Contractors Accreditation Program, the American Society of Mechanical Engineers, or an ISO 9000 registrar accredited by a group such as the ANSI-ASQ National Accreditation Board (ANAB). Registration indicates that the supplier has satisfactorily demonstrated an inspection and quality control system or manufacturing process that meets the requirements of the other-party on a continuing basis. AMC No.2 to EASA Part 21A.139(b)(1)(ii) - Vendor and sub-contractor assessment, audit and control - Production Organization Approval (POA) holder using other party supplier certification Other party supplier certification is a method whereby a supplier contracts with an appropriately recognised or accredited Other Party (OP) for the purpose of obtaining a certification from that OP. The assessment and surveillance of suppliers by an OP should be deemed to satisfy the requirements of 21A.139(b)(1)(ii) when the conditions of this AMC are satisfied.

9 PRI & Nadcap Organizational Structure 9 Policy Board of Directors Executive Leaders Legal entity Fiduciary responsibility Set policy Provide the vision Tactical Nadcap Management Council (NMC) Senior quality leaders & managers Oversee operation of Nadcap Establish/implement policy & procedure Task group coordination & development Identify/develop/deploy improvement Technical Task Groups Special Processes Nondestructive Testing, Materials Testing, Heat Treating, Coatings, Chemical Processing, Welding, NMSE, Non Metallic Materials Testing & Conventional Machining Measurement & Inspection Systems & Products Electronics, Sealants, Elastomer Seals, AQS (AC7004), Fluid Distribution Systems & Composites Supplier Support Committee (SSC) Technical Experts Determine requirements Develop documents Accept corrective action Final decision on accreditation

10 Existing Nadcap Processes and Products Special/Critical Manufacturing Processes Systems & Products Non-Destructive Testing Coatings Aerospace Quality Systems Electronics Welding Non-Conventional Machining Composites Fluid Distribution Systems Chemical Processing Conventional Machining as a Special Process Elastomer Seals Sealants Heat Treating Surface Enhancement Future Processes Materials Testing Laboratories Non Metallic Materials Testing Raw Materials Castings & Forgings Measurement & Inspection Non Metallic Materials Manufacturing The Medical Device Industry has expressed interest in these Special Processes and Products 10

11 Nadcap Process Flow 11 OEMs reach consensus on core audit criteria OEMs mandate Nadcap to supply chain as part of the supplier approval process Suppliers schedule and pay for the audit PRI contracts OEM approved Auditors who conduct on-site process audits to industry managed checklist Audit data is entered into eauditnet (PRI s in-house web based audit management system) PRI Staff Engineers review the audit report packages and work with Suppliers to close non-conformances Task Groups review audit packages, identify issues and vote to grant accreditation or request additional actions OEMs work with PRI to measure program effectiveness and continually assess and improve Nadcap for all participants

12 Industry Qualifies & Selects Auditors 12 Required auditor skills, knowledge and abilities are defined by Nadcap Task Groups Potential candidates complete an on-line pre-screening questionnaire and, if qualified, are interviewed by PRI Staff Task Group interview with powers of approval or rejection Testing/Certification may be required for acceptance as an Auditor Approved Auditor candidate completes extensive training and evaluation Candidates are approved after successfully performing an audit under observation Continual performance monitoring through on-site observation by Task Group and Supplier feedback Continued training at annual Auditor Conference and technical advisories Auditors average 30 years of industry experience

13 General Focus vs. Process Specific Audit General focus audit is not process specific 13 Does the Supplier define the processes employed for calibrating, inspection, measuring, and testing? Electronics (PCBs) NDT Chemical Processing Nadcap audit- is process specific Is there a procedure for the analysis of electrical test failures, which include failure analysis, nonconformance assessment and mandates for documented corrective actions? Are the fluorescent penetrant inspection (FPI) dryer ovens calibrated every three months at multiple points across the usable range? Is measuring and test equipment used to control or monitor the control of a process (within parameters) maintained in a calibration system compliant with ISO ? (I.e. temperature gages, conductivity meters, voltmeters, rectifiers) Electronics (PCBs) NDT Chemical Processing

14 Audit Management System - eauditnet 14 All audits are electronically recorded in an in-house web based system called eauditnet The Auditor will submit into eauditnet: Completed checklist Required attachments Write-up and grading of non-conformances Supplier will submit into eauditnet: Responses to non-conformances Supplier feedback form (evaluation of the Auditor) Upon Audit report submission: All automatic notifications are sent to designated OEM, Suppliers, PRI Staff and Auditors Time control metrics are automatically initiated and sent to OEMs

15 Non-Conformance Corrective Action Process 15 Supplier Supplier submits root cause analysis and objective evidence of corrective actions for each non-conformance PRI Staff Engineer reviews the audit report, works with the Supplier to close and approve corrective actions Task Group Reviews each non-conformance, approves or rejects the Supplier s response All issues must be resolved prior to closure of the audit by Task Group Votes to accredit the Supplier if all corrective actions are acceptable If the audit fails, Supplier must start the Nadcap process again (initial audit) PRI Issues certificate of accreditation (period of validity dependent on merit status) Schedules next audit (reaccreditation audit)

16 Why is Supply Chain Management so Relevant to the Medical Device Industry Now? 16

17 Current Situation: Medical Devices 17 Increased number of recalls attributed to supplier quality issues Overall increased interest in outsourcing and globalization of the supply chain, thereby increasing the challenge of oversight Purchasing controls is one of the top ten cited FDA 483 observations for medical device quality system violations Purchasing controls has been the target of several enforcement actions (warning letters, consent decrees)

18 Applying Critical Manufacturing Process Control 18 A critical manufacturing process is one where the parameters are directly influenced by component geometry and/or the results cannot be confirmed by inspection. 2010: FDA issues a Class II recall on an Automated External Defibrillator ¹. Root cause: Printed Circuit Board Assembly (PCBA) Product failure/recall Specific rootcauses Supplier has incorrectly applied solder flux Ineffective cleaning 20,525 devices were recalled Contamination could have lead to inoperability There is currently no industry-wide system for critical manufacturing process control in the Medical Devices industry. Threat to life & profits Although individual supplier could resolve issue, the industry remains exposed Customers remain exposed to potential consequences Highly likely industry will face similar issues from other suppliers

19 Medical Devices: the Story so Far Objective as defined by industry (February 2013): Create an industry managed supply chain oversight program that will reduce risk to patient safety, assure quality products and compliance with requirements as they apply to critical manufacturing processes. 19

20 Who s involved? Companies who have attended meetings or are actively engaged in supporting the development of the program include: Abbott Laboratories Baxter International Inc Beckman Coulter Boston Scientific Brunk Industries, Inc* DePuy (Johnson & Johnson) Flextronics* GE Healthcare Medtronic Meridian Bioscience, Inc. Merz Aesthetics Updated 19 June * Supplier Microtech* Paragon Medical* Philips Healthcare Plexus Manufacturing Solutions Sanmina Medical Division* Stellartech Research Corp* Stryker Symmetry Medical* Terumo Medical Zimmer Holdings

21 Background: PRI was approached by several medical device industry OEMs to determine applicability of a Nadcap-like program (Aerospace) for their industry PRI gathered information, presented at industry events, and met individually with multiple OEM supply chain quality executives 5 December 2012 Initial Medical Device Industry Roundtable meeting held in Chicago, Il (5Dec12) Attendees included 19 medical device industry stakeholders representing 15 different OEMs and suppliers Interest expressed in further exploring an industry managed program for the medical device industry Value proposition sub-team established (GE Healthcare, Stryker Corp, Baxter Healthcare Corp and Philips Healthcare)

22 Current Status 22 2 Roundtable Meetings held YTD: Dallas, TX including observation of Dallas Nadcap meeting (20-22Feb13) Chicago, IL (15-May-13) Program Management Council formed: 3 active sub-teams (Proof of Concept Audits/Program Documents/External Communications) Letter of Intent confirming commitment to program development signed by Philips Healthcare (June 2013) Objectives are to achieve critical mass for program launch, develop program documents, oversee proof of concept audit activities and engage industry organisations and regulatory bodies as appropriate. 5 Task Groups created: Sterilization Electronics PCBAs Electronics Wiring Harnesses Heat Treating Welding Objectives are to deliver proof of concept audits, develop audit criteria and develop auditor base.

23 Proof of Concept Audit - Welding 23 Supported by a leading orthopaedics OEM, audit was conducted using Nadcap checklist at a supplier performing fusion and laser welding (April 2013). OEM Perspective: Highly educational Highlighted issues with flow-down of requirements Confirmed their suspicions about weaknesses in their current approach Confirmed their belief in the value of a program for the MD industry Existing Nadcap checklists used are a 99% fit for MD industry Supplier Perspective: Enlightening experience: Audit preparation and process will lead to improvements in their systems Highlighted areas for improvement Demonstrated need to review and record procedures

24 Critical Manufacturing Process Areas of Interest Casting/Forging Chemical Processing Cleaning Coatings Electronics Displays PCBA**** Power sources/supplies** Wiring Harnesses*** Heat Treatment** Machining Laser Etch Material Testing Laboratories Measurement & Inspection Non-Destructive Testing Packaging Sterile Raw Materials Resins Composites Injection Molding Sterilization**** Software* Hosted Services Welding* KEY: BOLD - PRI currently has checklists addressing these Special Process/Product areas * - Number of votes received by 22Mar13 Dallas Roundtable participants for Proof of Concept audits RED - Top 4 special process areas for Proof of Concept audits

25 Benefits to Medical Device Industry Promotes a philosophy of continuous improvement and a culture of patient safety and quality for all participants Enhances compliance and quality management system effectiveness throughout the industry Provides consistent/standardized special process audits accepted by the medical device industry resulting in fewer redundant onsite audits by multiple OEMs Promotes best practices to assure patient safety and quality Promotes application of industry and technical standards/practices Provides an opportunity for collaboration between suppliers and OEMs Improves visibility of industry requirements to sub-tier suppliers Promotes least burdensome approach by reducing redundant process audits by multiple customers Enables reallocation of resources to other areas requiring attention Provides real-time and consistent visibility of supply chain quality

26 Next Steps 26 Conduct further proof of concept audits (July-September 2013) Conduct meeting with FDA (September 2013) Continue to increase number of participating companies (Letters of Intent) (ongoing) Signature of Program Development Agreements (September-December 2013)

27 How can you get involved? 27 Program Management Council: Description: Face to face meetings and teleconferences that provide an overview of program development activity and work to gain broader industry participation Participants: Senior Executives from Quality/Supply Chain/Regulatory/Procurement etc. Roundtable Meeting #4 9 July 2013 (Tues) London, UK Roundtable Meeting #5 28 August 2013 (Weds) Pittsburgh, PA Roundtable Meeting #6 31 October 2013 (Thurs) Minneapolis, MN (following MD&M (29-30Oct)) Roundtable Meeting #7 5 December 2013 (Thurs) Pittsburgh, PA Bi-weekly Teleconference Meetings Next meeting: July (Weds) 11:00am 12:00pm EST * All meeting locations, dates and times are subject to change

28 28 Questions Pittsburgh London Beijing Nagoya Singapore International Headquarters Performance Review Institute 161 Thorn Hill Road Warrendale, PA USA