Digitize Your QMS via an Enterprise Cloud Platform

It’s well understood that medical device manufacturers must comply with stringent quality standards, and they require a quality management system (QMS) to register their products and bring them to market. Since every device is unique, the burden falls on the manufacturer to set up an appropriate QMS and prove conformity with FDA requirements and/or ISO standards.

In the past few years, the ability to meet quality requirements has become more difficult. In a 2018 update, deputy FDA commissioner Anna Abram noted one of the biggest challenges comes from globalization.1 With the emergence of new global markets, supply chains have become more complex, adding to the hurdles in ensuring the safety and efficacy of medical devices. Risks are present at every step of global supply chain networks—from manufacturing to packaging to distribution.

Risks are also added by the industry’s increased use of outsourcing, which can offer opportunities, such as faster innovation and competitive pricing. But ensuring quality means companies must have a stringent approach to supplier selection, quality agreements, raw material inspection, and ongoing monitoring.

The COVID-19 pandemic also threw the industry into chaos. Some manufacturers transitioned operations to meet demand for scarce equipment and supplies, while others had their supply chains constricted, forcing them to diversify their suppliers.

To meet quality requirements within this difficult landscape, a QMS will ideally leverage an integrated, total digital strategy. This article will review what a QMS must entail, discuss the challenges inherent to historical approaches, and use a case study to illustrate the advantages of leveraging an enterprise cloud platform. Finally, the article will examine how companies can utilize an enterprise resource planning (ERP) system to operationalize quality management, if it doesn’t have the resources for an all-at-once enterprise implementation.

What a QMS Must Entail
A QMS is a collection of documented processes, procedures, and responsibilities for achieving quality and compliance objectives.

Medical device companies in the U.S. must comply with FDA 21 CFR part 820 Quality System Regulations, and if they also market outside of the U.S., the quality system must be built based on ISO 13485. Luckily, the FDA has synchronized a lot of its criteria to match ISO standards.

According to the FDA, a QMS should provide controls over the following areas:

• Management Responsibilities
• Design
• Materials
• Production & Process
• Corrective & Preventive Actions
• Equipment & Facility
• Records & Documents

Quality management processes are ideal targets for digitalization, as it would help automate processes, minimize product variation, and reduce risks. The listed areas also have sub-category processes—such as complaint handling and managing nonconformances—that assist with standardization and the handling of materials that don’t meet quality specifications.

When companies first start to digitize quality processes, they often begin by determining what data needs to be captured, what processes and workflows need to be automated, what checkpoints need to be recorded, and which team members need access to quality information.

Companies often find points where quality must be tracked as part of another business process, such as engineering, inventory management, or customer service. For example, quality should know when customer complaints come in or when critical design changes are made to the device. And if a product must be recalled due to a failed part, quality must be able to quickly assess what inventory lots and customer orders were affected. These are examples of how a quality system must seamlessly interact in real-time with other business departments, including an ERP system.

Traditional QMS Challenges
Manual & Paper-based QMS
Some companies start out tracking and managing quality using manual, paper-based processes. FDA regulations for paper-based documentation are well-established and pretty straightforward to follow. It’s completely legitimate for a company to have, as its QMS, a Word document or Excel spreadsheet, which stores all of its policies, workflows, and standard operating procedures (SOPs). Many companies have validated this type of QMS with inspectors and been able to confirm compliance with the requirement.

As a company grows and develops more sophisticated operations, however, paper-based documentation will actually hinder its ongoing compliance efforts. Keeping track of physical folders, ensuring signatures on critical documents, and scouring piles of paper for missing data can become painstaking tasks. Tracking and analysis become nearly impossible. When a company outgrows its paper-based quality tracking, the process can actually create more complication and risk, where it once provided simplification.

A Mish Mash of Point Solutions
A QMS must encompass so many different areas—all aspects of design, manufacturing, customers, supplier management, risk management, complaint handling, distribution, and more. As a manufacturer moves through various stages of digitization, quality processes can become housed in different point solutions.

Some may still employ low-tech options, such as a Word document, Excel spreadsheet, or simple database to house SOPs. Others might have quality processes housed in a legacy solution. Both low-tech and legacy systems are difficult for stakeholders to access, share, and modify—and they don’t provide enterprise-level orchestration.

Altogether, the various QMS components become a patchwork of unconnected solutions, making it difficult to get to the data needed when audits occur. These disjointed processes make it difficult for a manufacturer to ensure compliance throughout the product lifecycle. Companies must resort to costly, labor-intensive procedures to substantiate compliance—and all of this hinders their ability to grow and respond to market changes.

Companies also end up with a reactive response, dealing with quality issues as they arise, rather than being able to anticipate issues and address them before they become problematic.

As companies take on global, multifaceted operations, quality processes must likewise evolve to become part and parcel of all business processes—from securing raw material from suppliers to delivering the finished product to the end-consumer.

Benefits of an Enterprise Cloud Platform
Eventually, a QMS must embrace an integrated, total digital approach that will help satisfy the safety and performance needs of the particular manufacturer, product, and user market. Many companies are deciding to execute their digital strategy by leveraging an enterprise cloud platform. This type of platform is highly scalable and flexible, enabling companies to configure processes to their specific quality needs, meet the challenges of globalization, and comply with mandates as they evolve over time.

Quality must work hand-in-hand with other business functions, such as production, supplier management, and customer service. With an enterprise cloud platform, companies can build a robust yet customized end-to-end solution, which might include accounting, customer relationship management (CRM), ERP, and product lifecycle management (PLM), as well as QMS.

A single integrated platform provides the basis for advanced analytics. It eliminates time delays, or the waterfall effect when information must cross from application to application. Instead, analysis is enabled through a real-time river of information. It eliminates painful master data management and data warehouse extract-transform-load (ETL) processes that companies have long endured to consolidate data for analysis. Companies with an enterprise platform can set up simple dashboards to view all key performance indicators.

Modern cloud platforms also offer no- or low-code configuration capabilities, which enable everyday business users to deploy additional dashboards, customize processes, deploy mobile apps, embed AI, and leverage analytics. Easy-to-configure tools give companies the power to adapt their solution set to the needs of today’s shifting landscape.

Finally, systems and organization controls (SOC) are far easier to manage and assess when a single cloud platform underlies all applications, critical data, and processes. The platform self-documents processes and changes across all applications, making it easier to enforce enterprise-wide controls and to document change-management procedures.

Case in Point: Many Solutions on One Platform
One medical device company realized its current technology mix was an obstacle to its plan for quality, compliance, and growth. The company was using an assortment of separate, unintegrated applications, which resulted in quality issues, disconnected silos of information, and frustrating inefficiencies.

One of the key components of the company’s QMS was a simple document control application. This system was just a shared network folder with software controlling document revisions and history. However, it was fraught with issues.

Another significant challenge was the company’s inefficient complaint-handling process. The company knew that complaints were an essential part of customer feedback, quality improvements, and compliance. Even though the company’s sales volume was on the rise, it was falling behind on processing and resolving complaints.

Complaints were being tracked manually, which made it challenging to keep up with every detail. Each complaint submitted had to be touched by many different departments, including quality, compliance, engineering, sales, and R&D, which increased complexity and the need for a more scalable solution.

The company also used a separate inventory management application that tracked inventory quantities and lots, and another software application for accounting. These two systems were supposed to be linked but it was not a seamless connection.

For CRM, the company used a basic system, but this resulted in further silos. For example, the process of reconciling revenue between its CRM and its financial system could take several days. At any given time, the company didn’t know what its revenue was because their most up-to-date report was four days behind.

An Enterprise Cloud Approach to Solutions
Determined to move away from disconnected silos of information and inefficient interactions with suppliers, production, quality management, and customers, the company decided to move to an enterprise cloud platform to support all of its needs.

This enterprise cloud platform would include ERP, CRM, and QMS capabilities. Of particular interest was having an ERP track and trace complete product history, provide lot control, and improve efficiencies through automation, especially with inventory and engineering management.

At the same time, the QMS would streamline quality, compliance, content, and collaboration management across a diverse, globally based supply chain. And since it was on the same cloud platform, the QMS integrated seamlessly with the ERP solution. With the new QMS, the company would be able to ensure patient safety and compliance with FDA regulations.

Since applications on the cloud platform were relatively easy to deploy, the company went live with its total digital solution in seven months.

Post Implementation
Since going live, the company has automated many of its formerly manual and disconnected processes, including purchasing, inventory management, engineering management, production, and finance.

Beyond these efficiencies, the single integrated solution has given the company greater visibility into its entire operations. For each department, the ERP and QMS offer real-time dashboards, analytics, and in-depth reporting to facilitate key business decisions. In addition, the quality team uses customized dashboards for spotting potential problems, conducting risk assessments, and as a training and tracking tool.

Lot Control and Traceability
The company knew identifying the root cause of a complaint could be costly and unmanageable if it could not track products throughout their lifecycles, including parts or components it might have sourced or subcontracted in its supply chain. The new ERP provided end-to-end lot control and serial number tracking for complete traceability along with comprehensive device history. The company is now able to process complaints and efficiently associate them with specific lots across the system.

Complaint Processing
As mentioned previously, improving complaint processing was also one of the company’s goals. The integrated QMS, CRM, and ERP have solved this problem. The QMS gets customer data from the CRM, but also integrates with the ERP for inventory, lot number tracking, transaction dates, and many other product details.

Prior to going live, the number of open complaints was rising rapidly. Between product improvements its engineering team has made and the improved complaint-handling efficiency, the number of open complaints has significantly decreased despite its continued rise in sales.

The enterprise platform has also solved the problem of inefficient complaint processing. The timeframe for investigating and resolving complaints has decreased by an average of 60 percent.

The company has visibility during the complaints process across multiple departments. Reports and information can now be pulled in a fraction of the time it took in the past, whether internally or by an external auditor.

Recognizing Revenue, Optimizing Profitability
The integrated solution has enabled the company to overcome its initial challenges in performing revenue recognition. Now, the company benefits from a continuous, real-time exchange between sales, finance, and operations. It has used this information to better understand demand, optimize profitability, and respond to changes in supply and demand. These capabilities help ensure accurate sales forecasts, maximized revenue, and well-orchestrated production plans. Sales is better able to drive revenue with less unsold inventory and more efficient production.

Evolution, Not Revolution
The company in the example had a plan for aggressive growth, while maintaining quality and compliance. With an enterprise platform that included ERP, QMS, and CRM applications, it now has what it needs to support this mission.

Although this particular company utilized a big-bang approach and implemented several systems at once, a key benefit of an enterprise cloud platform is that adoption of applications can occur in a phased approach. Many companies will lay out an overall digital strategy, using an enterprise cloud platform as its core. Then as part of this strategy, they will go live with one or two key components first, being sure to choose the systems that will enable it to carry out its more critical business functions. Then, at a future point in time, companies can implement additional applications as needed or as their requirements evolve.

An ERP-First Approach
Among the lineup of potential applications, many companies often choose to implement ERP first, and with good reason. Most of the regulations for a quality system—over 75 percent of the FDA QS regulations and ISO 13485 requirements²—pertain to processes and procedures for production and post-production activities. For many companies that don’t have the wherewithal for a big-bang approach, they can operationalize quality within their ERP system.

Today’s modern ERP, which sits on an enterprise cloud platform, are highly configurable, so companies can operationalize the most critical components of quality until their operations demand the rigors of a dedicated QMS.

Following are some quality processes that can be managed from within an ERP.

• Design Control: An ERP is capable of establishing a well-defined design control procedure. It can capture key design changes to prove the product continues to meet user needs and is safe and effective. It can maintain design documentation and records as part of the design history file.
• Clinical Validation: An ERP can track clinical validation performed on production units, lots, batches, or the equivalent. If the results of a clinical validation lead to design changes, it can track those changes along with production modifications, and if clinical validation needs to be repeated, it can track those results as well.
• Document Management: The disciplines of quality management and documentation are intimately connected. An ERP can save thousands of documents, which include SOPs, work instructions, and policies. It can also document audits and corrective and preventive actions (CAPAs). All of these documents are necessary to demonstrate the quality of products, processes, and services, as well as compliance with laws and regulations.
• Engineer Change Management: If the development department changes a parameter in the design, there may be consequences for production. With changes housed in an ERP, the change can be visible to all departments. Increased visibility reduces the chance of launch delays and costly production errors.
• Managing Inventory with Lot Number Tracking: The FDA and ISO have guidelines for medical device products to include lot numbers and expiration dates on all packaging. The ERP gives detailed, real-time traceability so companies can see expiration dates, updated quantities, and inspection results. The ERP can track items as built and maintained, including serial numbers and revision levels of subcomponents, such as software components. It also provides visibility up and down the company’s business to connect demand forecasts back to supplier purchase orders, so a company is always keeping pace with production needs and customer expectations.
• Supplier Management: New and untested suppliers represent a major risk. Qualification and oversight of ingredient suppliers and contractor manufacturers is a key lifecycle responsibility. It requires strong partnerships and quality agreements with provisions for audits and prompt notifications of changes. An ERP can track all of these data points, as well as providing online communities to enable real-time communication in a globalized market.

Quality in a Globalized Market
Digitization is part of the change that’s required to improve quality, but it requires participation from an entire company. As such, companies must foster a culture in which all employees understand the potential impact their activities could have on quality.

As discussed, a QMS plays a vital role. It can optimize operations, help contain costs, and enhance quality, safety, and compliance. But the right QMS is dependent on a particular company’s needs, its product, and where that company is in terms of bringing that product to market. For some startup companies, a simple Word document or spreadsheet with all of its policies and SOPs may be a sufficient QMS, given its resources. But once the company’s operations become more sophisticated, its QMS needs will also evolve.

Ideally, a QMS will be part of a total digital approach on an enterprise platform, but many requirements for quality management can be satisfied through advanced ERP software. Eventual integration of ERP and QMS will enable manufacturers to have a single platform for visibility into their quality, production and supplier management processes. Having the most current data will help executives make optimal decisions around the future of their company’s quality and compliance efforts. 

References

1. http://bit.ly/mpo210351
2. http://bit.ly/mpo210352

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David Stephans is chief revenue officer at Rootstock Software, where he provides strategic direction for all revenue channels, customer acquisition, solution architecture, and services activities. He has more than 25 years of manufacturing and technology experience and a proven track record of taking the customer experience to new levels of productivity and profitability. Prior to Rootstock, he worked at several medical device companies, as well as an aerospace and defense government subcontractor. In addition, he’s held numerous senior management positions with firms such as Baan Supply Chain Solutions, i2 Technologies, and Relevant. He has deep understanding of manufacturing systems from both the buyer and seller perspectives.