Placing Quality at the Core of Your Business Processes

Transcription

1 Trusted Advisors to Healthcare and Life Science Executives Presented by Daniel R. Matlis Placing Quality at the Core of Your Business Processes Copyright 2009 Axendia, Inc. 1 1 Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc.

2 Agenda Is Compliance an Obstacle to Quality? FDA s Case for Quality Initiative The Many Sides of Process Improvement Chasing Defects The Commitment Gap So Many Systems, So Little Improvement Does Focusing on Quality Pay? Place Quality at the Core of Your Business Processes 2 Copyright 2015 Axendia, Inc.

3 Transform or Perish Companies are poised to capitalize on global opportunities; however, they must balance the risks and rewards of globalization. Shift Happens Regional Vertically Integrated Tribal knowledge Corporate best practices Supply Chains One Size fits all Global Outsourced Intelligence & Analytics Network collaboration Supply Networks Tailored & personalized 3 Copyright 2015 Axendia, Inc.

5 FDA s Focus on Product Quality In recent years the FDA has identified significant lapses in quality by some companies operating in the U.S. and around the world All companies must understand that quality is the basis for the public s trust and confidence in their products and maintaining high quality standards is part of the cost of doing business. Margaret Hamburg, M.D. Commissioner, FDA Source: 5 Copyright 2015 Axendia, Inc.

6 FDA s Case for Quality Initiative Launched in 2011, this initiative aims to bring stakeholders together to drive higher medical device quality. To achieve this mission, FDA identified 3 core components: FOCUS ON QUALITY While compliance is still a baseline, the FDA wants to identify and promote practices that result in high-quality devices, aligning FDA regulatory approaches with those practices. ENHANCE DATA TRANSPARENCY Provide stakeholders with understandable and objective information about medical device quality, which will help incentivize innovation and higher quality. STAKEHOLDER ENGAGEMENT Foster strategies that focus stakeholder interactions on device quality. 6 Copyright 2015 Axendia, Inc.

7 FDA s Case For Quality Our analysis flagged manufacturing quality risks and showed that firms that managed those risks by driving quality organization-wide tend to be more productive, with fewer complaints and investigations per batch, and often have smaller quality units with lower quality-related costs than their competitors. while the sophistication and complexity of medical devices has grown rapidly in recent years, the sophistication of device manufacturers quality systems has not necessarily kept pace. Steve Silverman, Director, Office of Compliance FDA CDRH Source: 7 Copyright 2015 Axendia, Inc.

8 Trusted Advisors to Healthcare and Life Science Executives Stop Chasing Defects, Start Improving Processes Copyright 2009 Axendia, Inc. 8 8 Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc.

9 Stop Chasing Defects, Start Improving Processes Process Improvement is described by many Med-Tech Executives as an imperative to survival. The benefits of these Process Improvement initiatives have eluded most in the Medical Technology sector. The majority of Med-Tech companies are still chasing defects. According to Axendia c research study based on a survey of : 239 Medical Technology Industry practitioners in 96 different companies from 22 countries. 9 Copyright 2015 Axendia, Inc.

10 Trusted Advisors to Healthcare and Life Science Executives The Many Sides of Process Improvement Copyright 2009 Axendia, Inc Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc.

20 Trusted Advisors to Healthcare and Life Science Executives So Many Systems, So Little Improvement Copyright 2009 Axendia, Inc Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc.

23 Trusted Advisors to Healthcare and Life Science Executives Does Focusing on Quality Pay? Copyright 2009 Axendia, Inc Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc.

24 Boston Scientific After receiving a Corporate Warning letter in 2006, Boston Scientific (BSC) went through a culture transformation with strong executive leadership and a focus on investing in prevention and product quality, which improved quality performance. BSC saw a steady decrease in Field Actions from 66 in 2005 to 16 in 2013 BSC saw strong FDA Inspection results, one 483 observation out of 16 inspections in 2013 Many of the elements of the Case for Quality align with BSC s quality-improvement journey. Source: FDA Case For Quality Executive Forum, June 26, Copyright 2015 Axendia, Inc.

25 Boston Scientific (BSC) The secret sauce was in leveraging the Quality System Regulations (QSRs) as a strategic foundation for improving business operations while aligning the organization with disciplined execution. With strong executive support, BSC revised its quality policy and shifted its culture to focus on product quality, where everyone owns quality. This included implementing a redesigned, globally standardized quality system and a new internal mindset and philosophy to focus on the proper execution of continuous improvement. Source: FDA Case For Quality Executive Forum, June 26, Copyright 2015 Axendia, Inc.

26 Boston Scientific Results BSC s focus on quality and implementation of the QSRs has created a competitive advantage with strong business impact. Some examples: Estimate that each Field Action (FA) costs ~$100K. Since 2005, BSC has reduced FAs from 66 to 16, resulting in $5M in annual savings. 50% reduction in CAPA cycle time (estimated cost of each CAPA is $20K). Improved customer experience by having less service interruption as a result of fewer quality issues. In addition, BSC reduced inventory by 25 days, resulting in $125M in savings. 2.5% of sales is average cost of quality. Source: FDA Case For Quality Executive Forum, June 26, Copyright 2015 Axendia, Inc.

27 Terumo Cardiovascular Systems In 2011, Terumo Cardiovascular Systems entered into a consent decree This event positively impacted its quality improvement journey Implemented technology to improve manufacturing product quality Terumo s consent decree was focused on quality system issues The firm leveraged its momentum to implement technology that would provide a closed-loop system and become a competitive advantage, with the goal to continue to improve product quality. The new system provided early detection and prevention of issues with hard stops, visibility to quickly find and correct root causes, and realtime data and Key Performance Indicator metrics to drive continuous improvement and consistency across all plants Source: FDA Case For Quality Executive Forum, June 26, Copyright 2015 Axendia, Inc.

28 Let Compliance Come Along For The Ride Drive quality and let compliance come along for the ride Mark Lincoln, VP Operations Terumo CV When Terumo looked at work orders per year x pages per work order x data collection points per page, it had close to 5 million opportunities to make a mistake. Even if Terumo s DHR accuracy was 99.5%, it would still have 24,000 potential errors/year. This translated into 96 opportunities for error, every day. Terumo invested in a manufacturing execution system (MES), to error proof manufacturing and focus the operators on building higher-quality product (as opposed to filling out paper). Eliminate the noise causing you to prioritize on the wrong thing. Terumo is measuring effectiveness of quality programs by looking at product performance in the field and applying an outside-in, patient centric approach. Source: FDA Case For Quality Executive Forum, June 26, Copyright 2015 Axendia, Inc.

29 Terumo CV Results Terumo s quality system implementation realized business value from its investment in prevention: 6% - 10% increase in productivity 41% reduction in production NCRs 58% reduction in overall complaints 65% reduction in workmanship complaints 100% reduction in documentation errors Source: FDA Case For Quality Executive Forum, June 26, Copyright 2015 Axendia, Inc.

30 Trusted Advisors to Healthcare and Life Science Executives How Can You Place Quality at the Core of Your Business Processes? Copyright 2009 Axendia, Inc Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc.

31 The Challenge While Most Med-Tech companies claim to embrace Process Improvement, our research show that most are still firefighting and chasing defects. The vast majority of Med-Tech Companies are currently using a variety of process improvement methodologies. Yet they are still unable to reap the rewards of these initiatives. Most Med-Tech companies are focusing brute force approaches to eliminate defects and support regulatory compliance. Reducing defects and improving regulatory compliance should be the outcome of well designed and well-executed processes, NOT the drivers for them. 31 Copyright 2015 Axendia, Inc.

32 Walk the Talk In an ever increasing global competitive market coupled with the reality of pricing pressures, quality and cost are the two competing forces that will need to be managed effectively. To meet the rigor of this new Med-Tech reality, the industry needs to fully embrace Process Improvement and close the commitment gap at every level in the organization. Process improvement is not a one-time project used to gain a belt. Process improvement is a continuous process that requires steady, long term commitment and support from all functional areas and organizational levels across the organizations. 32 Copyright 2015 Axendia, Inc.

33 Stop Chasing Defects As long as defects remain the primary focus, companies will not get to the real efficiencies, cost saving and leaning of their processes. As many Med-Tech companies have become hyper-focused on the next quarter results, Process Improvement initiatives that require steady, long term commitment and support have not taken hold. While process improvement initiatives get started with good intentions, they are thrown aside when fires flare up or new priorities emerge. 33 Copyright 2015 Axendia, Inc.

34 Stop Chasing Defects For many companies, this creates the endless loop of good work started, but never completed to realize the primary benefits of Process Improvement Consequently, companies continue firefighting As a result, root causes are not addressed and defects reappear periodically. 34 Copyright 2015 Axendia, Inc.

35 Stop Throwing Technology At Problems Merely implementing Point Solutions in response to regulatory enforcement actions creates more problems than it solves. Technology and systems can be a great enabler in the shift from the current reactive to proactive and ultimately predictive approaches to address manufacturing and operational issues. Take a strategic view to technology and implement interconnected systems to support PI and facilitate visibility across the organization. This approach will enable Med-Tech companies to have an early warning to identify trends before they evolve into nonconformances, CAPAs or recalls. 35 Copyright 2015 Axendia, Inc.

36 Technology MUST Support Business Goals To ensure that IT solutions and systems support Process Improvement Med-Tech companies should: Integrate data islands and point solutions into platforms to aggregate data needed to glean business information and make informed business decisions Implement global, standards based, and interoperable systems to support visibility outside the corporate four walls Collect, analyze, and act on critical-to-quality indicators and parameters Implement solutions to support business goals, not simply meet regulatory requirements 36 Copyright 2015 Axendia, Inc.

37 Shifting from Reactive Proactive Predictive Transform the Business Stop Chasing Defects Instead Focus on Achieving On-Demand Visibility across all constituents Improving processes by error proofing Addressing root causes Eliminating bottlenecks and non-value add activities Thereby Increasing Customer satisfaction Brand equity Product Quality 37 Copyright 2015 Axendia, Inc.

38 Focus on Quality, Not Just Compliance Compliance should be a byproduct of a well designed and executed process Build a Quality Culture Quality is everyone's job, not just the Quality departments Establishing a quality culture throughout the organization will allow your organization to more effectively manage critical business, quality and regulatory processes Drive quality and let compliance come along for the ride Mark Lincoln, VP Operations Terumo CV 38 Copyright 2015 Axendia, Inc.

39 Trusted Advisors to Healthcare and Life Science Executives Questions and Discussion Copyright 2009 Axendia, Inc Presented at NetApp Pharma Copyright Copyright RT, October , Axendia, 2009Inc. Inc. 39

40 Thank You for attending this session Thank You Placing Quality at the Core of Your Life Sciences Business Processes Daniel R. Matlis President & Founder (267) If you have questions or to request a copy of the Whitepaper series, Is Med-Tech Improving Processes or Chasing Defects URL: Blog: please contact me at dmatlis@axendia.com Trusted Advisors to Healthcare and Life Science Executives 40 Copyright 2015 Axendia, Inc.