Part 1 – Setting the Stage and Initial Thoughts

 

Well-publicized media stories about recalls and regulatory agency action (483’s, warning letters, and consent decrees), have raised the general public’s and medical device manufacturers’ awareness of the critical need for “product quality” in designing and producing medical devices.  Efforts have been made to educate companies and employees on regulatory expectations and the need for stringent quality in design, development and manufacturing.  Also taught is the need for effective execution of Corrective and Preventative Action (CAPA) processes to correct and prevent reoccurrence of lapses in product quality.  Despite this, failure to demonstrate both efficacy of corrective actions and improvement of product quality remain ongoing issues.

Beyond the damaging stories visible to the outside world, gaps in product quality create waste.  They cause undue work for employees (which also affects morale and retention), unacceptable scrap rates, and repeated failure of verification & validation.  They also cause high customer support costs and lead to expensive “tiger teams” created to fix the problem.   These and other costs all affect the company’s bottom line.

Dealing with regulatory actions creates significant distraction from business goals and activities (while incurring significant costs).  Other costs resulting from poor quality (e.g. increased inspection of incoming components, increased supplier oversight or friction with those suppliers, increases in field support personnel, increased warrantee expenses, etc.) are less often discussed, but nevertheless can easily become existential issues to the organization.

A number of organizational functions typically try to address quality issues: Development, Operations, Supplier Management, Quality, Regulatory, PMO (and others).  These functions and the people within them are well intentioned and hardworking – yet they often work in isolation from each other, and thus have differing perspectives and incentives.  This can, and does, interfere with the design and production of a high-quality product.

Let’s present a vignette[1] to illustrate how this occurs (note: line numbers have been added for use in reference in later articles in this series).

The well-respected company, My Quality Device, Inc. (MQD), has an internally developed idea for a new medical therapy.  An internal champion has proposed a general purpose medical device called the Internal Organ Monitoring and Diagnostic Device “IOMDD.”  After spending several years developing and presenting a nearly final design working prototype for the device, the champion has garnered intense interest and financial support from upper management.  A development team has been assembled and funded, and a required launch date for this new potentially lucrative product has been specified.

MQD has an existing quality system suitable for development of the IOMDD.  The quality system has been well thought out and put in place by personnel highly experienced in the content of the regulations.  The development team has been trained in the quality system, and instructed to adhere strictly to its procedures.

As development of the product proceeds, the development team feels uncomfortable.  As they refine the design at its lowest levels, they end up in disagreement over what the specific output levels and detection sensitivities of some of the subassemblies should be.  They even disagree over what some of the physiological signals are that should be detected.  They spend hours and days in meetings arguing about these points.  Ultimately, the internal champion simply says “do it this way.”  Moreover, as they carefully follow the quality system, the development team is sometimes forced to reach conclusions that seem illogical and against common sense.  They even encounter circumstances in which different aspects of the quality system seem contradictory – and they are not sure what to do.  Upper management is extremely clear regarding schedule and launch date, and is putting a lot of pressure on the development team to meet their contracted deliverable dates.  So, the team marches on, defines criteria for the design as well as specifications and supplier sources for the components, and hands the design off to manufacturing.

Manufacturing quickly discovers that many of the defined components are going to be obsolete within the next year.  They rush to define replacements, or do a large (and expensive) “last buy” to lay in enough stock to last for several years of manufacturing.  They also discover that the prices for components and subassemblies from the vendors are much more than expected.  The suppliers indicate that the design tolerances, in combination with the materials specified, are very tight and difficult to manufacture.  There is therefore a very high scrap rate, which increases the cost of the in-specification parts that can be shipped to MQD.  MQD puts intense pressure on the suppliers to reduce cost of the components.  They do so … but the working relationship sours; communication between MQD and the suppliers becomes curt and infrequent.  Occasionally, bad parts or bad lots of components are received anyway, and are not detected in the receiving process.  In a reaction to this the receiving processes are re-written and more resources are hired to support the additional receiving steps and inspections.  On top of all that, internal manufacturing finds that their scrap rates are very high: “the IOMDD is very difficult to assemble reliably”.  Finally, during a regulatory audit, the auditor finds several critical manufacturing tolerances that are not monitored or controlled.  A 483 with several findings is issued.

In the end, the IOMDD launches later than contracted for, and at a significantly higher cost of goods sold than originally forecast.  At first the IOMDD does not meet its sales quotas.  The customers complain that it is too expensive – so the average selling price is lowered.  Sales pick up somewhat, but MQD starts hearing that the IOMDD performs functions the customers do not need or want, and that it is difficult to make it perform desired functions. Additionally, MQD starts receiving complaints that IOMDD are breaking and they are being returned.  A “help center” is opened to coach customers on how to use the product, and costs for running this center increase alarmingly.  Failed products are returned and replaced at no cost to the customer.  Frequently, the customer simply wants a refund.

After a few years, it is clear that revenues are down, and internal indirect expenses are high. As a result, profit is far below expectations of the shareholders.  Senior management and Finance conclude that they need to maintain the revenue stream of MQD, so 25% of R&D, Regulatory, and Quality personnel are let go.  The next year, the situation is still bad – so another 25% of the personnel of each of these non-revenue producing functions are laid off.  The year after that, the Board of Directors meets and concludes that the senior management of the company is not meeting their expectations, and they are asked to resign.

The year after that MQD files for bankruptcy, and shortly afterward goes out of business.

Is this an unrealistic “perfect storm” of things gone wrong?  Perhaps.  But the story illustrates how many typical company behaviors can lower the quality in products as they are designed.  It also illustrates what can happen when high-quality is not present in marketed product.  In their collective experience, the authors have seen many of these typical, but ultimately damaging, behaviors occur in organizations: you have likely seen some of these behaviors in your own organization.  Sometimes all of these behaviors do indeed occur during a single product’s development.  In those cases, a scenario like that of MQD may occur.

It is our belief that organizations as a whole are missing four key points when it comes to designing and producing high-quality product:

  1. Product quality is an outcome of effective interaction between organizational functions. It is not “owned” by any one function, and cannot be “put into” a product by any one function.
  2. Few organizations have a position that coordinates organizational functions and to which the functions are responsible (other than a VP or SVP, who is typically preoccupied with business-level issues). Because organizational functions have different perspectives and incentives, they are, at best, not coordinated in objectives.  At worst, they operate with conflicting objectives.  Some companies attempt to remedy the situation by implementing broad PLM systems.  But these implementations are often not properly managed, and the effect of a poorly-managed implementation is worse than none at all.  In short:  no one is minding the store.
  3. Many functions operate without clear and intentional consideration of how their decisions affect the company’s bottom line. For example: development can produce designs that are not manufacturable or maintainable; manufacturing can miss opportunities to feed information back to development; and quality or regulatory can create procedures that are overly burdensome and perhaps not even executable.
  4. Quality is, to paraphrase, the ability of a product to safely perform its desired function. Meeting this goal is at the heart of Design Controls as defined by the FDA and ISO.  Failure to clearly define the desired function leads to project scope creep, project delays, failed V&V, and more.  Failure to concisely define and limit the collection of desired product functions leads to “too much”: too much of or too complicated a design; too many design outputs to verify and control; too stringent a set of requirements to demand of a supplier, etc.  “Too much” can – and will – “handcuff” the organization.  This is organizational and operational distraction at its source: with that distraction, something essential will always get “dropped,” creating the quality and cost issues at the heart of this discussion.

Solutions

There appear to be a number of potential actions to correct the situation described above.  However, these actions are not the ones that organizations have previously taken.  After all, if we keep trying the same thing and it does not work, clearly we need to try something different!  The authors are interested in starting this discussion with the intent of helping organizations understand and find solutions to the issues that prevent them from consistently producing high-quality products.

Toward that goal, we will be publishing a series of articles to expand on and illuminate specific topics associated with the organizational issues described above.  One hint of things to come: although the authors are all deeply ensconced in the design and use of “quality systems,” we do not feel that the problematic issues and organizational behaviors can be solved by creating or modifying those quality systems.  It is our belief that the solutions to these problems are already known, and lie in the nexus of recognized best practices in systems engineering, design for six sigma, six sigma, and project management.  Further, the issues run deeper into organizational structure, hiring practices, and training practices.  We hope that as we move forward with this exploration, you will all join in the discussion and contribute your insights.

© 2016 DPMInsight, LLC all right reserved.

(This article, and others in the series, are available and archived at http://www.dpmillc.com/reflections.html.

About the Authors:

Cushing Hamlen

Over 27 years of experience in industry, including 20 years with Medtronic, where he worked and consulted with many organizational functions, including research, systems engineering, product design, process design, manufacturing, and vendor management.  He has also worked with development, regulatory submission, and clinical trials of combination products using the pharma (IND) regulatory pathway.  He has been extensively involved with quality system (FDA and ISO) use and design, and is particularly concerned about effective understanding and use of product requirements and design controls.  He has formally taught elements of systems engineering, design for six sigma, Lean, and six sigma.  Cushing has degrees in chemistry and chemical engineering, is certified as a Project Management Professional, is certified as a Master Black Belt in Lean Sigma, and is the owner/member of DPMInsight, LLC (www.dpmillc.com).

 

Bob Parsons

Over 26 years of experience in leading Quality Assurance, Validation and remediation efforts in FDA regulated Medical Device and Pharmaceutical industry. Experience includes product development life cycle management from initial VOC through New Product Introductions (NPI), sustainable manufacturing, and end of life product management.  Technical expertise in quality system gap assessment, system enhancement, alignment and implementation of all quality elements including design controls, risk management, purchasing controls, change control and post-market surveillance.  Regulatory experience includes; ISO 13485, 9001 and 14971 certification, providing guidance for FDA PMA/510K and CE clearance, designated Management Representative, company representative and lead during FDA and ISO audits, 483 and warning letter resolution with experience working within consent-decree environments.  Bob currently supports various organizations in remediation and compliance projects through Raland Compliance Partners (RCP) www.raland.com .

 

Michael B. Falkow

Michael Falkow is a Quality Specialist with Raland Compliance Partners. He has served as a regulatory compliance and quality assurance executive with multi-facility/international companies and was an FDA Compliance Officer and Senior Investigator/Drug Specialist.  Michael has subject matter expertise for quality and regulatory compliance, quality auditing, quality assurance, quality control, supplier evaluation and certification, and compliance remediation.  He has been approved by FDA as a GMP certifying authority and is qualified to provide Expert Witness testimony for GMPs.

Currently – Adjunct Professor at Mercer County Community College – teaching courses on Clinical Development for Certificate Program in Clinical Research as part of Drexel University’s Masters Degree in Clinical Development.

[1] Disclaimer: the company and product portrayed in this vignette is totally fictitious: it is a compilation of observations made by the authors, and does not represent any company currently or previously in business.

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