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“Make it a Blockbuster night!” Credit: Sean Davis
This year, the Medical Device Innovation Consortium held an Excellence in Quality Summit where it was promised that participants would receive a “unique opportunity to learn adoptable cutting-edge practices to maximize the impact of investing in quality across [their] total product life cycle.”
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Participants were guided by industry experts to examine enterprise transformation, enhanced patient safety, and increased returns—all through the lens of the most advanced approaches to elevating quality. Turns out the key to protecting your margins is to shift from reactive to proactive quality.
This topic couldn’t be more timely.
Quality management is key for nearly every industry, but especially in automotive and life sciences, where strict adherence to quality standards is critical due to the risk of human harm should a production defect go undetected.
However, the idea that life science firms can view quality as a means of potential financial returns offers a different perspective. Inflationary pressures that drive the costs of inputs, from raw materials to labor, as well as price controls demanded by consumers and governments, threaten to squeeze revenues. Every investment in a life science organization must have demonstrable returns. That includes the costs associated with “quality.”
A life science company’s quality department garners tremendous respect, yet often it receives the least amount of financial and other support. At worst, quality is met with resistance from those seeking to innovate or market new devices, medicines, or treatments. Quality departments are often perceived as the group that’s “too strict” or “narrowly interprets regulations” to avoid recalls, U.S. Food and Drug Administration warning letters, and other censures. Anyone who has been involved in the life sciences industry can acknowledge the delicate dialogues and negotiations that occur between legal, quality/compliance, marketing, and R&D staff members, especially regarding new product introductions.
And though everyone knows “quality” is necessary, few really understand that it does more than maintain compliance, help leadership teams stay out of jail, and keep patients safe. Quality can also contribute to a life science company’s bottom line.
Remember Blockbuster? That blue-and-yellow behemoth that once ruled the video rental world? They laughed off the streaming revolution, clinging to late fees and physical stores. Those of us old enough to remember or young enough to have learned about this business as a case study know how that ended.
Now, life science organizations are facing their own disruptive moment. Pricing pressures, amplified by government negotiations and global economic volatility, are squeezing margins like never before. Inflation, supply chain chaos, and the shadow of counterfeit drugs loom large.
Life sciences can’t cut corners on safety and quality. Lives are literally on the line. But how do you protect margins without compromising the bedrock of your industry?
The quality conundrum
Even though recalls are on the rise, as noted by recent examples cited by the FDA related to medical devices, medical devices with faulty software, and pharmaceuticals and nutraceuticals, most life science companies are pretty good at catching quality issues before products hit the market. Your quality systems may be working, but at what cost to you?
Here’s the thing: Detection typically takes a reactive approach. By the time you find a defect, the damage is done. You’ve already poured resources into a product that’s now destined for the scrap heap or a major rework. It’s like fixing a leaky faucet after your basement is flooded.
The “Rule of 10” in quality management tells us that the further down the line you address a problem, the more expensive it gets. Catching a defect during the design phase might cost you a dollar. But if that same defect makes it to the customer, the cost due to recalls, remediation, legal action, and loss of customer confidence will cost you tenfold, hundredfold, thousandfold, or beyond. The Rule of 10 highlights the exponential cost savings achieved by identifying and resolving quality problems at earlier stages of production. Also, the Rule of 10 suggests that for every dollar invested in improving quality early in the production process, manufacturers can expect multiplied returns from cost savings and improved outcomes. The amount you invest in quality and prevention is far less expensive than detection or reaction.
Preventive medicine for your margins
To meet quality, regulatory, and financial requirements, life science firms must build quality into their products and processes from the ground up. Creating a culture of quality throughout your organization can leverage the skills of existing staff and doesn’t require additional monetary investment. This approach means shifting your focus from detection to prevention.
Tony Tan, IT manager at Renolit, a German company providing high-quality plastic film for a number of industries, shares this advice for other manufacturers to drive a culture of quality throughout their organizations: “Because our division is in healthcare, we are completely focused on quality,” he says. “You have to start from the top, and then drive it all the way down. And IT also has to provide the tools... have the EQMS system tool kit at the bottom [as the base], because if you can’t measure it, you’re just practicing.”
Here are some additional strategies to get you started.
Robust new-product introduction (NPI) process: Don’t leave quality to chance. Bake it into your NPI process from Day One. Identify potential risks early and design them out of the system.
Design for quality: Make quality a nonnegotiable part of product design. This might involve using more robust materials, simplifying designs, or incorporating error-proofing measures.
Disciplined improvement: Use best-practice quality tools like 8D, Ishikawa diagrams, and 5 Whys to systematically root out the causes of repeat issues. Don’t just fix problems; prevent them.
Quality awareness: Make sure everyone in your organization understands the financial effect of quality. It’s not just the job of the quality department; it’s everyone’s job.
Cross-functional teams: Break down silos and get different departments working together to tackle your biggest quality challenges. A holistic approach is often the most effective.
The future is now
The pressures facing life sciences won’t let up anytime soon. Government regulations are only getting tighter, and global economic forces show no signs of stabilizing.
But here’s the good news: You’re not alone. Other industries, like automotive and consumer goods, have been wrestling with margin pressures for years. They’ve developed sophisticated systems and processes to deliver high-quality products while keeping costs in check.
It’s time for life sciences to take a page out of these industries’ manuals. Thanks to modern quality management systems (QMS), that’s never been easier. A QMS can automate many of the tasks involved in quality management, freeing up your team to focus on strategic initiatives like preventive quality planning. It can also help you identify and mitigate risks before they turn into costly problems.
Don’t let the Blockbuster blind spot derail your business. Embrace the power of preventive quality and arm yourself with the tools you need to thrive in this era of margin pressure.
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