Make the Most of Your Quality Systems
OEMs are requiring contract manufacturers and suppliers to do more testing on their own at all levels of the supply chain.
Quality is the most important part of the entire production process—not only are there lost profits when products are returned or reworked, but a serious or deadly quality incident can put a company out of business. This ever-present risk, combined with tougher U.S. Food and Drug Administration standards and OEMs shrinking their supply chains to only a select group of preferred vendors, is driving companies to pay more attention to their quality systems.
For medical device manufacturers and their suppliers, the challenges to quality are many—global competition, economic and competitive pricing pressures, increasing customer demands, and stringent regulatory oversight, both in the United States and overseas. As a result, OEMs are looking for more transparency and less risk from their supply chain.
“Overall product quality is the responsibility of the brand owner or OEM, who must have real-time visibility and control over suppliers and contract manufacturers,” said Jaideep Rao, medical device industry manager for Camstar Systems Inc., a provider of enterprise manufacturing software and quality solutions based in Charlotte, N.C. “This cannot be effectively achieved through time consuming onsite audits of your global supply network and redundant quality verification on receipt of materials. OEMs are asking for simple ways to drive supplier and contract manufacturer quality to prevent risky and costly rework, scrap, and other waste downstream. They want early visibility and real-time manufacturing process intelligence [built] into supplier and contract manufacturer processes with the ability to effectively collaborate with the suppliers to correct and prevent problems from occurring.”
Making the Supply Chain Do More
OEMs are requiring contract manufacturers (CMs) and suppliers to do more testing on their own at all levels of the supply chain. Not only does this identify problems sooner, suppliers also assume more of the risk and cost of product development.
“In the past, we were most often asked to provide equipment for final testing, whereas now we are being asked to provide equipment for subassemblies,” observed Jeff Lind, president of Compliance West USA in Del Mar, Calif., a manufacturer of surge testers and hipot equipment for production, laboratory, and custom requirements. “Now tests are more stringent and have tighter tolerances. For example, instead of a continuity test and a hipot test on a lead, today the requirement could easily be for repeated energization and comparison of values before and after the test, and rejection of all parts that didn’t meet a very tight tolerance.”
The cost of this extra testing can be substantial. If OEMs only require subcontractors to conduct limited testing, it’s a fairly inexpensive and efficient process because the goal is simply to verify that the design of a particular part meets the requirements. In other cases, however, subcontractors may be required to conduct testing according to International Electrotechnical Commission (IEC) standards (normally only required once in the lifetime of the product) multiple times on 100 percent of production, with an acceptance criterion that is much tighter than required by IEC standards.
Compliance West USA helps contract manufacturers with OEM test requirements and often finds the CM doesn’t have a full grasp on the tests; this simply may result from the OEM not providing enough information to allow the CM to fully understand the required test package. Regardless, not having all details can lead to increased costs and longer build times and/or result in the test package being designed and carried out incorrectly.
“The problem is mostly that the subcontractor is not in a position to completely understand the requirement,” said Lind. “The OEM is always very helpful but the sub doesn’t always know what questions to ask. This can be a big potential problem if the subcontractor understands the requirements incorrectly. The best-case scenario is for the subcontractor to work with a test equipment provider who understands the requirement and can interact with the OEM on the subcontractor’s behalf to ensure that the equipment is tested properly.”
Many companies are utilizing risk-based methods to benchmark quality. An increasing number of medical device manufacturers are incorporating hazard analysis into their process, determining the potential risks and hazards throughout their value chains.
“With the speed of business today, quality activities need a systematic method for identifying potential adverse events,” said Tim Lozier, director of marketing and strategy for EtQ Management Consultants, a developer of quality management and environmental, health, and safety management software in Farmingdale, N.Y. “Risk is becoming the new approach to benchmark quality.”
Hazard analysis involves taking the potential hazards within the product lifecycle—such as product, production, supplier, and process—and determining a risk level to the hazard. Appropriate controls are then selected to mitigate those risks. “You end up with a product lifecycle that has all potential hazards identified and controls to mitigate their risk,” said Lozier. “The food industry does this with Hazard Analysis Critical Control Points and the life science industry is taking a page from the book and using similar tools.”
Suppliers having a robust quality management system in place can reduce the frequency of
OEM audits; when audits are needed, a good quality system makes them more effective and a problem can be targeted and mitigated to closure. Auditing a supplier is in itself a quality control mechanism that should be based on the supplier risk level—something that varies for every OEM based on its risk appetite and the risk of the supplier’s types of products, services, technology and quality system it provides.
“The performance level of the supplier must also be part of the equation,” indicated Deborah Kacera, industry solutions director for Pilgrim Software Inc., a provider of enterprise risk, compliance, and quality management software solutions in Tampa, Fla. “The performance of the supplier needs to encompass measures from receiving, inspections, nonconformances, corrective actions, previous audit findings, etc. Additionally, if the supplier changes locations or adds a location for manufacturing or processing, introduces a new production line, or additional equipment, then these ‘exceptions’ can also trigger supplier audits.”
Depending on the situation, audits can be onsite or offsite. When performance metrics trend in a negative direction, an onsite audit is generally required to discuss what changes have occurred and to see what guidance can be given to suppliers. “With the evolution of technology, a Web-based audit can be conducted to audit a supplier’s standard operation procedures, work instructions, and reports/metrics of their processes, which saves time and travel costs,” said Kacera. “You do not have to be onsite to see these documents; instead, spend the time onsite to experience the manufacturing environment, not the conference room.”
According to Kacera, capturing supplier performance and risk profile information from the supplier’s cross-functional teams requires a system that has the ability to compile information from multiple data sources and to aggregate and generate supplier score cards, both locally and globally, for each supplier location/part number. Receiving data should be pulled from a manufacturing execution system or enterprise resource planning integration to capture the delivery and quantity performance. Other commonly used performance measures include incoming quality inspection, manufacturing floor rejections where the supplier is the root cause, downtime where supplier is the root cause, field service complaints/recall where the supplier is the root cause, corrective actions, audit scores, adverse changes in pricing, and supplier deviations on approved product/process. The performance and risk level information should be combined to determine the frequency of auditing your supplier to ensure they are in compliance.
Speed to Market
New products are introduced each year, competition grows, and companies move faster to get the latest product versions to market. This “need for speed” by the OEMs increases pressure on the supply chain. To keep pace with OEM demands, contract manufacturers must have newer, more advanced quality systems because the old ways of benchmarking quality simply cannot keep up.
“Reducing risk through risk management improves speed to market because less risk means more efficient production,” said Lozier. “Mitigating risk in design through failure mode and effects analysis (FMEA), risk in process with hazard analysis, risk in the supply chain, and enterprise risk management all provide the systematic, repeatable, and objective decision-making tools organizations need to keep pace with the world.”
Involving as many departments as possible early on through concurrent engineering and design helps identify potential problems before they happen. Getting early input from what is normally considered a near-end process, such as ship testing and packaging, can improve the initial design and production process, which ultimately helps improve quality and save time.
“Most of our customers are doing a more thorough job in the development phase of ship test and shelf-life testing,” agreed David Huff, chief operating officer for Coastal Life Technologies Inc., a provider of contract assembly, packaging, and sterilization services in San Antonio, Texas. “In the past these activities were usually the last to be considered. Over the last few years the package design and related actions have occurred more concurrent with the product design.”
Because OEMs want more testing and faster production time, the standard equipment isn’t efficient enough anymore—subcontractors often must invest in custom-built quality testing equipment or outsource the testing process.
“After seeing the increase in test programs subcontractors are being asked to provide, and the increased run times and tolerances required, it is becoming clear that the only way to increase throughput and testing is to have extremely specialized test equipment,” observed Lind.
Lind cited a recent example of an international medical device manufacturer that needed help developing a customized two-in-one tester which tests to DF-1 and DF-4 for both the isolation and current carrying waveforms. The testing had to be streamlined and data acquisition needed to take place without intervention. It needed to deliver clean waveforms using solid state devices and avoid pre-arcing and bouncing caused by mechanical relays. The LED display on the front panel also had to display the voltage in the selected capacitor and the status of the tester (polarity selected, test selected, DF-1 or DF-4, charging, trigger, interlock, or standby).
“As a result, the tester had lots of features and capabilities, including variable waveform truncation for isolation waveforms, the ability to test two products at one time, USB computer control featuring preset multi-test sequence, voltage, polarity control and the ability to record voltage, polarity, time, and type of waveform of each pulse delivered, all delivered to an Excel file,” said Lind.
Regardless of the equipment being connected to an ethernet network directly or via USB, the test equipment software should be flexible and easily modified in order to add or modify tests as directed by the OEM, or to better test for a known weakness. The test equipment must be able to adapt to meet new challenges in the production or the use as envisioned by the OEM.
“In addition, test-equipment providers must be capable of developing very specialized high voltage and high current testers to meet the industry’s increasingly stringent specifications,” said Lind. “We are seeing more stand-alone test equipment, designed to function autonomously; keeping a light footprint and performing testing with no assistance from a computer or network device.”
Harmonization and Standardization
Speed to market also is essential for medical device manufacturers who want to compete in international markets. Conducting international business smoothly requires a compliant quality system and the submittal of a comprehensive technical file that enables the timely review and approval of the product.
“Our clients frequently need to develop quality systems that satisfy the requirements of multiple markets,” indicated Mick Howk, North American sales manager for SGS North America Healthcare Group, an inspection, verification, testing, and certification company in Rutherford, N.J. “We often audit quality systems that have been designed to satisfy the specific requirements of the U.S., Japan, Canada and the European Union. This presents a challenge for the manufacturer in developing a system that satisfies all of the individual requirements of their markets.”
Increasingly, OEMs want to standardize their operations under a single enterprise quality management system for all their locations around the world. However, each site level facility has its own unique processes and tends to resist a change to its normal operations.
“The question becomes, ‘How can we all be common yet maintain each site’s unique business process?’” said Lozier. “The answer is using technology to create a corporate standardized ‘backbone’ workflow that still allows each site to ‘layer’ unique processes to retain their individuality. This way, harmonization can happen at the enterprise level, but each site is able to have its own unique workflow.”
The most accurate quality processes are closed-loop so variables can be contained and measured, making it easier to mine key data from all sources for metrics and emerging trends. Accessing this data in real time allows for quick reactions and decision making—especially valuable for widespread or global supply chains.
For example, Camstar provides a unique cloud-based software solution for on-demand visibility and real-time manufacturing process intelligence and collaboration that helps brand owners or OEMs efficiently manage their supply chain quality. It quickly can respond to out-of-compliance manufacturing process shifts and other events exposed through dashboard and alerts. Manufacturing and test data via web browser can be leveraged from anywhere in the world. Product problems can be detected at the source, prior to shipment, preventing quality escapes. The system can automatically collect data from the test floor and redirect engineering from time-consuming data gathering tasks to high-value problem solving. It also can roll up and analyze granular parametric and attribute test data associated with each serial number and subassembly—and correlate it with return and warranty analysis.
“All these capabilities reduce audits and incoming inspections,” said Rao. “The goal is to replace contract manufacturer audits with real-time monitoring, and replace incoming quality inspections with dock-to-stock deliveries. The total cost of implementation and installation of this system is recovered within months through reduced manufacturing costs (up to 20 percent), reduced customer returns (up to 40 percent), and reduced costly service repair costs. This allows your valuable supplier quality group to shift its focus from time-consuming, nonproductive work such as travel and data collection to value-added activities like data analysis and supplier development projects.”
Standardization is a way to create consistency across an organization's operations, especially quality management. The key is creating consistency in the data, consistency in the processes, and a synergy across the organization.
“Regulatory agencies are raising the bar for compliance and managing 18 different ways of doing the same thing can create a disconnect and increase the risk of non-compliance and reduced quality,” said EtQ’s Lozier. “By harmonizing on a single process platform, you can keep control of the compliance and reduce any risks.”
To truly succeed in a harmonization initiative, Lozier believes executive sponsorship, team leadership, and team participation are critical. Companies must be able to track progress, resolve issues in the system, and communicate easily and openly in order to foster continuous improvement. A repeatable methodology for standardizing processes must be “system agnostic”—in other words, not related to any one system or type of execution.
Quality data also certainly can be used to affect change within an organization.
“With all the quality data entering the system, there is an opportunity to utilize this data to foster organizational change within the enterprise beyond the product,” added Lozier. “With the right team in place (and the right software), you can use the data to drive design effective change within the organization—such as post-market evaluation, cost/benefit analyses, project management, and sourcing (supply chain planning).”
Sometimes the solution isn’t the next technological advance or latest edition of software. Sometimes the solution is simple, visual, and can be determined with a hand-drawn flow chart on a piece of paper. Lean techniques—especially value stream mapping—are highly effective in evaluating a process and identifying and eliminating waste. In many cases it simply is a matter of taking the time to be observant.
Sherrie Robbins is director of regulatory affairs for Nelson Laboratories, a Salt Lake City, Utah-based provider of testing services. She recently used a PFMEA (process failure mode and effects analysis) to determine the most efficient document scanning process for the company to use internally.
“We all know about FMEA, failure mode and effects analysis,” she said. “PFMEA simply takes it a step further and applies it to a process, examining it piece by piece, line by line. What could fail? If it fails, what will the effect be? Will it be severe? Can we detect it? What is the probability it will happen?”
After doing the PFMEA Nelson corrected several gaps in Nelson Laboratories’ document scanning process. “The PFMEA document then becomes a dynamic document,” she added.
“Any time the process is modified the document needs to be updated. For us, we now know the best way to transition from paper-based archives to digital archives and expect to have a high ROI [return on investment] when the process is completed.”
Ongoing benchmarking is critical to sustained improvement and better quality. Over the last year or two Coastal Life Technologies has automated much of the data collection process, allowing the company to measure indicators more frequently and spot trends as they start to develop.
“For example, one of the metrics we benchmark is defects per units produced,” said Huff.
“Our goal is to continuously lower the ratio. We use our manufacturing discrepancy report information (that we input into a database) to categorize the types of defects produced in a given product line. A team is then put together to reduce or eliminate the most frequent defect. We continue to monitor the process, and will make sure whatever we have done has worked, and then move on to correct what used to be the second-highest defect. In one product line we reduced our manufacturing defects per 10,000 units produced from 54 to 21 over a two-year period.”
With increasing demands from OEMs on a number of fronts, there may be a tendency for contract suppliers to pay less attention to mature product lines—something Huff considers to be a mistake.
“In physics,” he said, “the natural order of any system is entropy. Companies have to keep putting energy into existing products and processes. They must retrain personnel and review procedures, even on mature product lines. I have seen the same thing in manufacturing processes—put one together, have it running smoothly, leave it alone for six months, and you’ll be surprised to discover you are producing defects that you thought were eliminated. It is essential to keep training and monitoring the process or it will slowly fall apart—quality management is an ongoing process that requires commitment at all levels of the company, at all times.”
Mark Crawford is a full-time freelance business and marketing/communications writer based in Madison, Wis. His clients range from startups to global manufacturing leaders such as Kohler. He also writes a variety of feature articles for regional and national publications and is the author of five books. Contact him at email@example.com.