Seth Goldenberg, Ph.D., and Carl Ning, Veeva Systems03.04.20
Medical device and diagnostics companies have experienced dramatic growth over the last decade that is significantly impacting the supply chain. Gone are the days of single-source procurement. To keep pace with the velocity of innovation, manufacturers have diversified their network of suppliers. They now source from hundreds—even thousands—of vendors to leverage the global supply of parts, active ingredients, and other components to help drive costs down and stay competitive.
Because each of these suppliers can impact product quality, device manufacturers must oversee them as though they were an extension of the company and not an outside entity. However, this has become challenging as large suppliers establish hundreds of global manufacturing sites to increase capacity and smaller suppliers are being acquired or divested. This adds to supply chain complexity with more suppliers to manage in more locations amid constant change.
Additional suppliers are not only more difficult to track, but also increase the potential for supply chain disruption that could have a domino effect on product quality. Any one vendor could suddenly go out of business, encounter manufacturing snags, decrease capacity, or other events. Adding to the challenge, many medical device companies rely on manual processes and systems that limit visibility and make it difficult to comprehensively monitor supplier quality across longer, more complicated supply chains.
These challenges have taken a major toll on the industry with a surge in product shortages, recalls, and regulatory citations. The FDA issued 49 Class I recalls in 2019—the most in four years.1 Non-routine quality events—such as major observations, recalls, warning letters, and consent decrees, along with associated warranties and lawsuits—cost the industry between $2.5 billion and $5 billion per year on average.2 These figures do not include losses of goodwill and market share. Further, major quality events can mean long-term devaluation for a company. In the past decade, an average of one company per year has seen a 10 percent drop in share price after a single major product recall.2
Modern, cloud-based systems that have been used to successfully manage complex supply chains in other industries can help device manufacturers collaborate better with vendors and manage quality more effectively and efficiently. The challenge, now, is supplier adoption. The key to improving quality is not just adopting advanced systems and smarter processes within a device company’s four walls, but also ensuring top suppliers do the same. Bringing external suppliers into the device company’s quality management processes can improve quality and reverse quality’s downward trend—as it must. Following are ways to encourage suppliers to adopt best practices.
Demonstrate Value and ROI to Suppliers
Some medical device suppliers are hesitant to collaborate within medical device companies’ quality management systems—they are uncertain how this could impact day-to-day operations. However, if a device company demonstrates the value, efficiency, and operational benefits of a collaborative, best-in-class solution, suppliers will recognize the advantage. For example, joint workshops or conference room pilots of a new system between select suppliers and the device manufacturer provide opportunities to demonstrate system value while fostering productive relationships between manufacturers and suppliers.
“Patient safety and product quality are our top priorities so as our supply chain grew, we adopted a modern solution that allowed us to automate manual quality management tasks,” said Jon Cornell, head of quality at Coloplast. “Soon, we were able to demonstrate ROI—specifically, how the solution increased efficiency and saved us resources so we were in a better position to maintain high quality.”
Best-in-class technology solutions enable medical device companies to eliminate the manual steps involved with tracking supplier quality, such as transcribing phone calls into the system of record, inputting incident reports, e-mailing back and forth with suppliers, scanning documents, and more. One Class III medical device company found their supplier quality engineers were spending up to four hours per person each day on administrative tasks. With new technology, companies can dramatically improve efficiency and free staff to focus on other tasks.
Modern systems also automate the ongoing process of managing supplier scorecards. For instance, alerts and workflows can be automatically triggered when any supplier nears an unacceptable quality threshold. Device manufacturers can set pre-determined limits across various quality factors, and if breached, the system demotes that supplier from “approved” to “conditionally approved,” and prevents any further purchases until resolved. If needed, it can auto-generate requests for “for-cause audits,” ensuring all suppliers are closely monitored. This also allows device companies to be more proactive in averting a potential disaster. The same is true for suppliers equally as vested in avoiding the financial and brand damage stemming from a major quality event in one of their customers’ products.
Historically, medical device companies have only been able to react months after discovering an approved supplier slipped from one incident per quarter to 10. By then, the damage has been done and the costs are significantly higher than if it had been caught early. Modern solutions track suppliers in real time, empowering companies to head off a problem early and affording them more control for creative problem resolution. Suppliers, in turn, will likely reduce their quality infractions, and be rewarded by the manufacturer upgrading them to preferential status. Frequency and intensity of supplier audits may also decrease depending on consistent, positive audit results, scorecard, and risk rating, translating into significant time and resource savings.
“When companies work collaboratively, it’s a win-win-win,” added Cornell. “Working within the same modern system is ideal. Suppliers increase their business, manufacturers improve quality and reduce costs, and patients’ lives are enhanced with safer products.”
Help Get Suppliers Up and Running Fast
Naturally, some suppliers are reluctant to adopt a new system if perceived as difficult to use. As consumers, we expect technology to be intuitive with clear, point-and-click navigation for rapid access to records, auto-populating fields to save time, and simple drop-down menus.
As important, device companies should help suppliers assess organizational readiness by identifying any requisite change management protocol and evaluating the optimal training approach—both from content development and delivery perspectives—to ease the transition. By giving suppliers expert guidance before a changeover, device companies reduce any potential apprehension.
“The cost of quality isn’t always part of the financial accounting process, so whatever device companies can do to show value will motivate most suppliers to consider making a change,” said Cornell. “Modern systems allow fast information sharing and improved efficiencies but you must roll-up your sleeves and demonstrate that value.”
Post-implementation, device companies should provide system support, including virtual and/or in-person user training and educational materials to help onboard the suppliers and provide ongoing training sessions in regular intervals. Likewise, technology vendors should be expected to partner with device companies to support their efforts for greater system adoption among suppliers.
Increase Supplier Quality, Decrease Post-Market Surveillance Burdens
Modern technology is the core enabler to improving supplier quality management in the medical device and diagnostics industry. However, for manufacturers to fully leverage the advantages of new technology, collaboration outside their four walls is paramount. Device companies must demonstrate system benefits and incentivize suppliers by passing along these benefits such as preferential status or less frequent audits (when possible). In addition, they should encourage system adoption by providing onboarding assistance and comprehensive, ongoing training.
The result is increased quality of materials coming in, which increases the quality of finished products going out—ultimately, reducing the heavy post-market surveillance (PMS) burden. The PMS team is one of the highest cost centers at medical device companies as it is burdened with handling all product quality complaints (including adverse event and regulatory reporting for health authorities across the globe), complaint investigation, coordination with the CAPA team, and more—all in a fast-paced, high-volume environment. The EU Medical Device Regulation’s heightened focus on PMS adds further strain.
Higher quality products reduce complaints and improve patient safety while freeing resources to be redirected to other strategic initiatives like product innovation. This can lead to additional revenue streams that fuel accelerated development of more life-altering products for patients.
Conversely, device companies that fail to get ahead of supplier quality in today’s complex supplier landscape will face quality issues. Stuck in a reactionary mode, these organizations risk increases in complaints, warning letters, consent decrees, product recalls, and worst of all, causing patient harm.
“When suppliers and medical device manufacturers are on the same page, it naturally creates a more seamless working relationship,” concluded Cornell. “Communication increases and risk decreases. Quality issues can be circumvented early. And, both companies benefit from increased efficiencies.”
References
Seth Goldenberg is responsible for Veeva Vault strategy in the medical device and diagnostics industry, including customer engagement, market adoption, and product development. Goldenberg has nearly 20 years of experience supporting medical device and diagnostic companies to navigate complex regulations and improve market access. Before joining Veeva, Goldenberg was director of product development strategy at North American Science Associates (NAMSA), where he supported medical device companies from inception through commercialization and post-market activities. Outside of Veeva, Goldenberg is an active member of the Regulatory Affairs Professionals Society (RAPS) and is the “entrepreneur in residence” at the Pennsylvania Pediatric Device Consortium. He holds a doctorate in pharmacology from the University of Washington and a master’s degree from the school of biomedical engineering at Drexel University. He can be reached at seth.goldenberg@veeva.com.
Carl Ning is responsible for Veeva Vault Quality solutions strategy, with an emphasis on the medical device and diagnostics vertical. With over 20 years of experience delivering transformative solutions in the life sciences, consumer products, discrete manufacturing, and financial services industries, Ning has dedicated 15 of those years to quality management. He has been involved in over 100 quality/regulatory system design and implementation initiatives, and continually seeks ways to evolve solution designs to maximize value without sacrificing efficiency and compliance. He can be reached at carl.ning@veeva.com.
Because each of these suppliers can impact product quality, device manufacturers must oversee them as though they were an extension of the company and not an outside entity. However, this has become challenging as large suppliers establish hundreds of global manufacturing sites to increase capacity and smaller suppliers are being acquired or divested. This adds to supply chain complexity with more suppliers to manage in more locations amid constant change.
Additional suppliers are not only more difficult to track, but also increase the potential for supply chain disruption that could have a domino effect on product quality. Any one vendor could suddenly go out of business, encounter manufacturing snags, decrease capacity, or other events. Adding to the challenge, many medical device companies rely on manual processes and systems that limit visibility and make it difficult to comprehensively monitor supplier quality across longer, more complicated supply chains.
These challenges have taken a major toll on the industry with a surge in product shortages, recalls, and regulatory citations. The FDA issued 49 Class I recalls in 2019—the most in four years.1 Non-routine quality events—such as major observations, recalls, warning letters, and consent decrees, along with associated warranties and lawsuits—cost the industry between $2.5 billion and $5 billion per year on average.2 These figures do not include losses of goodwill and market share. Further, major quality events can mean long-term devaluation for a company. In the past decade, an average of one company per year has seen a 10 percent drop in share price after a single major product recall.2
Modern, cloud-based systems that have been used to successfully manage complex supply chains in other industries can help device manufacturers collaborate better with vendors and manage quality more effectively and efficiently. The challenge, now, is supplier adoption. The key to improving quality is not just adopting advanced systems and smarter processes within a device company’s four walls, but also ensuring top suppliers do the same. Bringing external suppliers into the device company’s quality management processes can improve quality and reverse quality’s downward trend—as it must. Following are ways to encourage suppliers to adopt best practices.
Demonstrate Value and ROI to Suppliers
Some medical device suppliers are hesitant to collaborate within medical device companies’ quality management systems—they are uncertain how this could impact day-to-day operations. However, if a device company demonstrates the value, efficiency, and operational benefits of a collaborative, best-in-class solution, suppliers will recognize the advantage. For example, joint workshops or conference room pilots of a new system between select suppliers and the device manufacturer provide opportunities to demonstrate system value while fostering productive relationships between manufacturers and suppliers.
“Patient safety and product quality are our top priorities so as our supply chain grew, we adopted a modern solution that allowed us to automate manual quality management tasks,” said Jon Cornell, head of quality at Coloplast. “Soon, we were able to demonstrate ROI—specifically, how the solution increased efficiency and saved us resources so we were in a better position to maintain high quality.”
Best-in-class technology solutions enable medical device companies to eliminate the manual steps involved with tracking supplier quality, such as transcribing phone calls into the system of record, inputting incident reports, e-mailing back and forth with suppliers, scanning documents, and more. One Class III medical device company found their supplier quality engineers were spending up to four hours per person each day on administrative tasks. With new technology, companies can dramatically improve efficiency and free staff to focus on other tasks.
Modern systems also automate the ongoing process of managing supplier scorecards. For instance, alerts and workflows can be automatically triggered when any supplier nears an unacceptable quality threshold. Device manufacturers can set pre-determined limits across various quality factors, and if breached, the system demotes that supplier from “approved” to “conditionally approved,” and prevents any further purchases until resolved. If needed, it can auto-generate requests for “for-cause audits,” ensuring all suppliers are closely monitored. This also allows device companies to be more proactive in averting a potential disaster. The same is true for suppliers equally as vested in avoiding the financial and brand damage stemming from a major quality event in one of their customers’ products.
Historically, medical device companies have only been able to react months after discovering an approved supplier slipped from one incident per quarter to 10. By then, the damage has been done and the costs are significantly higher than if it had been caught early. Modern solutions track suppliers in real time, empowering companies to head off a problem early and affording them more control for creative problem resolution. Suppliers, in turn, will likely reduce their quality infractions, and be rewarded by the manufacturer upgrading them to preferential status. Frequency and intensity of supplier audits may also decrease depending on consistent, positive audit results, scorecard, and risk rating, translating into significant time and resource savings.
“When companies work collaboratively, it’s a win-win-win,” added Cornell. “Working within the same modern system is ideal. Suppliers increase their business, manufacturers improve quality and reduce costs, and patients’ lives are enhanced with safer products.”
Help Get Suppliers Up and Running Fast
Naturally, some suppliers are reluctant to adopt a new system if perceived as difficult to use. As consumers, we expect technology to be intuitive with clear, point-and-click navigation for rapid access to records, auto-populating fields to save time, and simple drop-down menus.
As important, device companies should help suppliers assess organizational readiness by identifying any requisite change management protocol and evaluating the optimal training approach—both from content development and delivery perspectives—to ease the transition. By giving suppliers expert guidance before a changeover, device companies reduce any potential apprehension.
“The cost of quality isn’t always part of the financial accounting process, so whatever device companies can do to show value will motivate most suppliers to consider making a change,” said Cornell. “Modern systems allow fast information sharing and improved efficiencies but you must roll-up your sleeves and demonstrate that value.”
Post-implementation, device companies should provide system support, including virtual and/or in-person user training and educational materials to help onboard the suppliers and provide ongoing training sessions in regular intervals. Likewise, technology vendors should be expected to partner with device companies to support their efforts for greater system adoption among suppliers.
Increase Supplier Quality, Decrease Post-Market Surveillance Burdens
Modern technology is the core enabler to improving supplier quality management in the medical device and diagnostics industry. However, for manufacturers to fully leverage the advantages of new technology, collaboration outside their four walls is paramount. Device companies must demonstrate system benefits and incentivize suppliers by passing along these benefits such as preferential status or less frequent audits (when possible). In addition, they should encourage system adoption by providing onboarding assistance and comprehensive, ongoing training.
The result is increased quality of materials coming in, which increases the quality of finished products going out—ultimately, reducing the heavy post-market surveillance (PMS) burden. The PMS team is one of the highest cost centers at medical device companies as it is burdened with handling all product quality complaints (including adverse event and regulatory reporting for health authorities across the globe), complaint investigation, coordination with the CAPA team, and more—all in a fast-paced, high-volume environment. The EU Medical Device Regulation’s heightened focus on PMS adds further strain.
Higher quality products reduce complaints and improve patient safety while freeing resources to be redirected to other strategic initiatives like product innovation. This can lead to additional revenue streams that fuel accelerated development of more life-altering products for patients.
Conversely, device companies that fail to get ahead of supplier quality in today’s complex supplier landscape will face quality issues. Stuck in a reactionary mode, these organizations risk increases in complaints, warning letters, consent decrees, product recalls, and worst of all, causing patient harm.
“When suppliers and medical device manufacturers are on the same page, it naturally creates a more seamless working relationship,” concluded Cornell. “Communication increases and risk decreases. Quality issues can be circumvented early. And, both companies benefit from increased efficiencies.”
References
Seth Goldenberg is responsible for Veeva Vault strategy in the medical device and diagnostics industry, including customer engagement, market adoption, and product development. Goldenberg has nearly 20 years of experience supporting medical device and diagnostic companies to navigate complex regulations and improve market access. Before joining Veeva, Goldenberg was director of product development strategy at North American Science Associates (NAMSA), where he supported medical device companies from inception through commercialization and post-market activities. Outside of Veeva, Goldenberg is an active member of the Regulatory Affairs Professionals Society (RAPS) and is the “entrepreneur in residence” at the Pennsylvania Pediatric Device Consortium. He holds a doctorate in pharmacology from the University of Washington and a master’s degree from the school of biomedical engineering at Drexel University. He can be reached at seth.goldenberg@veeva.com.
Carl Ning is responsible for Veeva Vault Quality solutions strategy, with an emphasis on the medical device and diagnostics vertical. With over 20 years of experience delivering transformative solutions in the life sciences, consumer products, discrete manufacturing, and financial services industries, Ning has dedicated 15 of those years to quality management. He has been involved in over 100 quality/regulatory system design and implementation initiatives, and continually seeks ways to evolve solution designs to maximize value without sacrificing efficiency and compliance. He can be reached at carl.ning@veeva.com.
