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Pharmaceutical Manufacturing and Packing Sourcer

Top Quality Supply, Bottom Line Success

Yaniv Vardi at Sparta Systems Europe, Ltd discusses the benefits of enterprise-wide quality management in the manufacturing chain

Profit and quality are both laudable and indeed vital goals for the pharmaceutical manufacturing company planning to be in business for the long haul, yet all too often it seems that the latter is compromised by the need to provide a decent return for stakeholders. But does it need to be this way? This article examines this proposition, along with some of the other challenges faced by manufacturers in deploying an effective and resource-conscious quality management system, with a view to suggesting some key measures that can be implemented to achieve a working balance.

SUPPLY CHAIN EFFICIENCY COMPETES WITH SUPPLY QUALITY FOR PRIORITY

A tug-of-war frequently goes on between company executives intent on establishing an efficient product lifecycle – thereby maximising profit potential – and those responsible for ensuring product quality through the enforcement of strict procedures. In this situation, it is all too easy for quality to lose out as production needs and profit take precedence. However, when tackled in the right manner (as we will see in this article later), improvements in quality management across the enterprise can also introduce efficiencies and control mechanisms that help to achieve bottom line success.

LACK OF A CENTRALISED REPORTING SYSTEM

The main problem faced by many pharmaceutical companies – including some of the largest – is the lack of a centralised system to track the constant stream of events taking place during the interaction between themselves and their suppliers. Given the advantages of comprehensive tracking and streamlined reporting, plus the attendant benefits of higher efficiency and stricter compliance, it may seem incredible that only elementary methods are used in their place. But it is certainly true that a multitude of database and spreadsheet applications and innumerable other customised or home-grown point solutions – none of which communicate with each other – are routinely used to address these tasks.

These legacy systems fall short of providing the level of support that the organisation needs in many ways, some of which are listed below:

• Management has no centralised view of quality and compliance across the enterprise
• Lack of integration with other enterprise software systems within the organisation to aggregate data
• Increasing the possibility of costly human error due to inability to automate critical business functions
• Low level of direct connectivity and visibility into the company’s manufacturing processes
• No means to ensure workflow and process consistency
• Low efficiency means reduced time for product innovation

Clearly these deficiencies present a significant challenge to quality and compliance, but there are still more factors that exacerbate the problems.

INSIGHTS NEED TO BE SHARED

Executives in a pharmaceutical company are usually responsible for overseeing multiple aspects of the organisation’s global operations, with the result that they may not become sufficiently involved in ensuring that supplier relationships are maintained effectively. Instead, the issue of supply quality is often left to departments that lack the necessary insight to fully understand the correlation between supply quality management and the company’s financial performance, so there is no guarantee that the correct procedures will be put in place to gauge supply quality and evaluate processes.

ASSESSING SUPPLIER RISK EFFICIENTLY

Analysing and grading suppliers based on the level of risk they pose to the total manufacturing operation is another vital inclusion that may be missing from the wish-list of quality procedures. Without risk-based analysis, dividing up time and human resources between the scrutiny of low-risk reliable suppliers and those of more dubious provenance is likely to be a hit-or-miss affair at best. To combat this, it will be necessary to deploy comprehensive risk analysis tools.

SUPPLY CHAIN REACH INCREASING

On top of these challenges we have globalisation to contend with, and the demands here are likely to continue at an increasing pace as supply chains extend to all reaches of the globe. With holding companies and distributors now complicating the picture, identifying the actual manufacturer and supplier of an ingredient has never been more fraught with difficulty. As well as third-party suppliers, pharmaceutical industries also depend on their own internal manufacturing and compliance processes and must somehow find a way to maintain quality standards across the board without impeding the efficiency of the supply chain.

EQMS OR ERP?

Putting in place an enterprise-wide quality system (EQMS) that effectively resolves the difficulties posed by all of these challenges would help to drive compliance and also reduce the burden of the cost of poor quality, so it seems the logical way forward. However, particularly in the current less-than-ideal economic climate, there is another force within the organisation that may stand in the way – the desire to eliminate redundant technology and its supporting infrastructure. This can stop an EQMS in its tracks if the executive view is that an existing enterprise resource planning (ERP) solution can perform the same tasks satisfactorily in its place.

ERP AS A QUALITY MANAGEMENT SYSTEM

There are essentially two options for adapting ERP to give the functionality required for quality management:

• Carry out extensive customisation in order to gain access to the additional data needed to provide visibility into quality issues at the time of product release; this can be prohibitively expensive, with a price tag running into millions of dollars
• Don’t customise; this is an error-prone approach that leads to the need for intensive manual workarounds

Planning to add another string to the ERP bow is a wholly understandable approach – typically a company will have invested heavily in its ERP system and licences and will be familiar with the idea of enlisting its versatility to perform new tasks. Not surprisingly, faced with the options outlined, the customisation route is preferred.

In fact there is a long history of ERP installations being customised to extend their use beyond traditional, transactional supply chain oriented purposes into more peripheral areas of the business. For those who have pursued this goal in the past with quality management in mind, from a footprint perspective it initially seemed a positive practice, but with time it has proven to be disruptive due to the need for full competitive evaluation processes to be undertaken at the point of each upgrade. Consequently, the trend appears to be reversing as hindsight indicates that employing purpose-designed applications to perform their designated functions provides the better time/value and time/productivity balance. Ultimately, the consensus seems to be that quality modules for ERP can manage isolated processes – for example, various types of deviations that occur during the manufacturing process can be logged against a particular batch and limited screens can be exposed to enable tracking of investigative activity – but in most cases they don’t fulfil the requirements from a holistic view.

While on the subject of application redundancy, it is worth considering the impact that recent mergers and acquisitions (M&A) have had on businesses within the pharmaceutical industry. In a more prosperous financial setting the customary approach would have been to rip out and replace the existing infrastructures within the combined organisations, using M&A funding to integrate systems. The current economic situation discourages this due to the high cost, long timescale and degree of disruption involved; instead, a middleware bridging approach is now favoured, which attempts to link multiple pre-existing ERP installations and enable them to co-exist. At the outset, the problems of trying to gain a holistic view of quality across the enterprise still persist as for an individual ERP installation, but are now multiplied potentially by a factor dependent on the number of linked systems.

To look at ways of overcoming these inherent disadvantages this article will consider some features and benefits of EQMS and then examine its role as an integrator of ERP and legacy systems.

THE BENEFITS OF ENTERPRISE-WIDE QUALITY MANAGEMENT

The challenges outlined demonstrate that a global view of all quality issues and supplier rankings is needed to increase visibility into potential supplier problems. This can require significant resources, such as investment in systems and infrastructure, training costs and time. The benefits are manifold: improving supplier investigation and root cause analysis processes enables repeat problems to be anticipated and reduced; compliance with industry regulations, good manufacturing practices and ISO standards is ensured; and the high costs associated with scrap, rework and delays caused by supplier quality problems are minimised. Add to this the ability to integrate purchasing and inventory systems with the quality management system, and this also opens up the possibility of improved quality trending and management reporting.

DESIRABLE EQMS FEATURES FOR SUPPLY CHAIN MANAGEMENT

To centralise the quality process across the enterprise requires numerous management and compliance processes to be deployed. Some of the supplier related abilities to look for in an EQMS system include those that:

• Manage the qualification and approval of new suppliers, which may also include tasks such as self-assessment and onsite audit
• Handle audits based on risk level, audit frequency and supplier rating or score as recorded in a supplier’s profile. A supplier audit must be scheduled when a trend in supplier quality problems is identified; the audit process, related audit findings, and subsequent supplier corrective and preventive actions can then be managed and tracked in order to reach a quick and effective resolution
• Create inspection records for incoming materials to ensure tracking of all inspection activities, including received date, material details, quantity, and inspection type and results
• Enable the organisation to maintain and monitor approved and preferred supplier lists, which can be customised reports or online databases that may be reviewed and updated by qualified staff
• Generate non-conformance reports directly from the inspection record or independently within the manufacturing operation when materials fail quality control. The system should also ensure that supplier investigations and root cause analyses are tracked through to completion
• Track all supplier corrective and preventive actions through to completion. Ideally, third-party suppliers should be provided with secure access to view their specific non-conforming material reports and audit findings and enable them to record corresponding corrective actions
• Maintain or link to supplier documentation providing important data such as material specifications, inspection plans, delivery windows and acceptance sampling for received items.

INTEGRATION OF ERP WITH EQMS

From the technology perspective, various strategies have been employed to attempt ERP integration, ranging from the use of yet more legacy batch processes through to the latest real-time web services. The key to making such integration relatively painless is to expose master data from the ERP – the material master information, product details and vendor information used to support supplier quality management related processes. Also critical is the integration of product issue related processes in the EQMS with product release functionality within the ERP. This is most commonly approached by having the EQMS perform outbound communication with the ERP in real time, flagging products for which issues are logged and the affected batches have been identified. At the point of resolution in the EQMS, a further outbound communication is performed to update the ERP and allow products to be released.

Where ERP deployment is limited or legacy solutions prevail, progressive organisations can still extend the use of EQMS to manage release criteria by bridging across multiple instances of product related quality information. The EQMS can then be integrated with the ERP to execute goods movement transactions, allowing release when all of the relevant criteria have been met.

Earlier we hinted at the potential for merged organisations linking their ERP systems to create communications chaos, but that need not be the actual outcome. EQMS has emerged as a bridging force in these environments by delivering flexible integration capabilities that can successfully interconnect many legacy systems and still ensure consistent, transparent quality system processes. Perhaps the most surprising benefit is how manageable the cost and effort involved are, especially when compared to the time and expense of customising the ERP system.

CONCLUSION

Far from being mutually exclusive, we can argue that making a profit is not only entirely consistent with corresponding quality management heightened priority, but will almost certainly even come to depend on it before long. Without the powerful visibility and traceability of EQMS and the efficiency and compliance it brings to the enterprise, it is only a matter of time before the tardy and ill-prepared are caught out by regulatory intervention or, worse still, a post-manufacture incident in the marketplace that brings production to an abrupt halt – and that is not a scenario that any company wishes to contemplate.


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Yaniv Vardi is Managing Director of Sparta Systems Europe, Ltd, and is responsible for overall management, finances, sales, professional services and business development activities. He joined the company in 2000 as a Product Specialist and was promoted to Project Manager shortly thereafter, leading several large global implementations. In 2004, he co-established Sparta Systems Europe and acted as the Vice President of Operations from 2004 to 2008. He is an industry expert in quality management and compliance regulations and holds a BSc in Industrial Engineering from NJIT University.

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