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Toyota Woes Highlight Importance of Supplier Quality Management

February 10, 2010 By 6 Comments

Welcome to the 894,302nd and counting piece about Toyota’s fall from manufacturing grace.

We don’t need to devote a lot of space here to recounting Toyota’s problems. You probably know the story: After months of hemming and hawing, the once-proud carmaker finally acknowledged the obvious this month and said it was recalling a boatload of cars that have accelerator pedal problems.

But it gets worse: Yesterday (February 9, 2010) Toyota added that it was also recalling over 400,000 Prius, Lexus because of a brake problem as well as additional problems with the Camry and possibly the Corolla, too. For now, the jury is still out on exactly what went wrong (beyond how badly Toyota handled the PR side of this).

Yet we’re writing about this today because, even as Toyota’s massive problems are being probed, analyzed and dissected by experts from various industries, the issue of supplier quality management (SQM) doesn’t seem to be coming up much.

By enabling the capture, analysis, and assessment of quality related issues, Supplier Quality Management (SQM) creates total transparency and visibility into the supply chain. It provides instant traceability and real time monitoring across the supplier network.

By enabling the capture, analysis, and assessment of quality related issues, Supplier Quality Management (SQM) creates total transparency and visibility into the supply chain. It provides instant traceability and real time monitoring across the supplier network.

That’s too bad, because one of the few good things that could come out of all of this is reminding car manufacturers, medical device makers, pharmaceutical companies, food manufacturers and a host of other businesses that supplier quality management is key to being a profitable, effective company that only gets good headlines (See box below, Sal’s Tips).

“Gone are the days when manufacturers can say suppliers can’t have an impact on their success” or, perhaps in the case of Toyota, a spectacular failure, says Dun & Bradstreet analyst Jim Lawton. He also has a background working on medical device issues with Hewlett Packard.

Lawton’s first lesson gleaned from Toyota is that companies should strongly consider focusing on their core competencies and outsourcing other stuff. For example, companies should work hard with partners to understand risk and develop procedures and programs to mitigate it.

“Unfortunately, the medical device industry is not out in front when it comes to managing supplier quality,” worries Jim. “They are all about taking out costs,” he adds. For more of his excellent insights, check out his recent interview with Industry Week.

That can be a case of being penny wise and pound foolish, agrees Sal Lucido at AssurX. ‘Supplier quality management has not gotten the attention it should, because it’s complicated; involving the processes and politics of other companies. It’s hard enough to manage your own company’s issues let alone those of your global suppliers,” Sal says, adding that he believes lessons can be learned from Toyota’s missteps.

Sal’s Tips: Lessons Learned From The Toyota Fiasco

Toyota’s pain could be others gain, IF they learn from what happened to a once-lauded manufacturer. Sal lists some lessons:

  • The costs associated with the loss of your company’s reputation are incalculable.
  • Product quality includes both the actual and the PERCEIVED view customers hold of your product.
  • Ensure you have visibility to the data you need to detect problems early. Prevention is an order of magnitude less costly than late reaction.
  • Don’t rely solely on return on investment calculations to direct your process improvement efforts. Sal states as an example that, “ROI calculations are effective when it comes to making decisions such as purchasing automation equipment, but they can fall short when it comes to upstream process improvement investments such as SQM.”

SQM often also gets short shrift because it is harder to calculate in terms of the return on investment (ROI), Sal notes. “When supplier issues are addressed with band aids and tape, they can be hidden from view – for a while. But the day of reckoning always comes.” This is one of the lessons we all may be able to learn from Toyota’s predicament. “The further back in the supply chain, the less attention it gets,” says Sal.

But the Toyota case might make it easier for others to calculate their return on investment in supplier quality. “Decades of reputation building (not to mention billions of dollars) by Toyota has been washed away in a matter of days! It’s very sobering if you are a manufacturer,” Sal points out.

Some good can come out of Toyota’s very public problem if we use it as a wake up call to look at our own house and make sure the processes are sound throughout, starting with supplier quality.

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Filed Under: Michael Causey, Quality Management Tagged With: , ,

Former FDA inspector Miles on What FDA Looks for During Inspections & the Importance of Strong CAPA Systems

December 1, 2009 By 1 Comment

Ken Miles, Former FDA Inspector

Ken Miles, Former FDA Inspector

Ken Miles, a 28 year veteran of the FDA, is today a widely-respected industry consultant to the medical device industry. He draws on his extensive experience to help firms effectively and efficiently comply with FDA requirements. Ken’s expertise includes evaluating Good Manufacture Practice (GMP) and Good Laboratory Practice (GLP) compliance, Quality System Regulations, and QSIT certification inspections (Management, Design, Process Controls, and CAPA).

In this multi-part series, we talked with Ken about FDA inspections, CAPA, quality systems, audits, training and more.

Q: When you were with the FDA, what did you look for during onsite inspections at medical device facilities?

A: What I primarily looked for was a robust quality management system that covered all of the key areas: CAPA, internal quality audit findings, training, MDRs and complaints, supplier quality, etc.   Supplier audits are also very important, and they should always tie back into CAPA and management review findings.

Q: You mention training as part of the overall quality management system –  what kind of problems did you see in that area?

A: The most common problem with training is that programs are often inadequate. Oftentimes procedures are either nonexistent or very poorly written. You need to have stringent management commitment and oversight, while also removing irresponsible people who can seriously damage the business. Procedures, management review and training are the primary areas that should generally be addressed through a CAPA program to make it work.

Q: Digging deeper, what were the CAPA-related issues you saw most often during inspections?

A: The one thing I saw often was that companies did not prioritize their CAPA items. You need to prioritize them using a risk-based approach. The highest priority ones should be put at the top of the list. Sounds like an obvious thing, but a lot of companies just throw all CAPA related issues into one bucket with no priority or even closure dates. If you don’t have some sort of prioritization system, you might become weighed down with too many assignments with no end in sight. Prioritize by low, medium and high priority, as well as severity of consequences. That would also imply that you have a target date, or closure date once you implement that program. A lot of companies don’t do that.

Q: You stress the importance of prioritizing and setting due dates for CAPA. Can you give us some examples of what you looked for during your inspections?

A: Medium and serious CAPA issues should be closed out within 30 or 90 days at the most. I’ve seen situations where CAPAs are still hanging out there after two or three years! And I’ve even some that have never closed or resolved! In certain situations, I’ve also seen CAPAs that don’t even have a closure date. Unfortunately, that’s typical of spreadsheet based CAPA systems.

In the next part, we will delve deeper into actual situations, and discuss some of the more egregious things that Ken Miles experienced as an FDA inspector.

Click here for more detailed information about CAPA.

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Filed Under: FDA Regulated, Quality Management, Regulatory, Tamar June Tagged With: , , , ,

FDA Importer Guidance for Medical Devices: What it Means to you Going Forward

March 17, 2009 By 2 Comments

intensive care unit monitorThe FDA has had many challenges and setbacks in the past few years. From budget cuts to high-level departures, the agency has also faced fury from lawmakers on Capitol Hill over high-profile device, drug and food recalls.

Off the record, current and former FDAers have told us that they know they’ve been understaffed and underfunded in recent years, and that their enforcement capabilities often weren’t up to the task.

Now with a new president and renewed focus on government regulation in Washington, it’s likely pressure from the White House and Capitol Hill will spur the agency to be more active this year and in the next several years, experts say.

In a new white paper from AssurX, you’ll learn why a FDA’s new Good Importer Practices draft guidance is putting the device industry on notice. The white paper explains that the FDA will:

  • Hold those at the top accountable for any import problems for their
    products,
  • Expect medical device manufacturers to be vigilant about quality, and;
  • Increase its emphasis on device firms’ catching and correcting mistakes and
  • complaints.

As this new guidance demonstrates, a revitalized FDA today demands that medical device manufacturers to build quality into their products from the very beginning, and to spot procedural problems very early in the product lifecycle.

At its heart, the FDA guidance wants device manufacturers to:

1) Establish procedures for developing corrective action plans, and for taking corrective and preventive actions if non-compliance with a U.S. requirement or a safety concern should arise.

2) Identify and investigate the root cause of non-compliance with U.S. requirements for products they import, or by foreign firms with which they do business.

3) Take steps to remediate and prevent harm from present and future shipments, and to ensure non-compliance and safety problems do not recur.

4) Work with the non-compliant firm to meet U.S. requirements, or stop conducting business with that firm.

“This is part of a broader effort, pushing responsibility for manufacturing on the manufacturer,” says Mark Mansour, an attorney with Bryan Cave LLP in D.C. While the FDA is saying it will inspect and enforce more, manufacturers are counted on as the “first line of defense,” he adds. “Device firms should take this very seriously,” Mansour said.

Request your copy of the FDA Importer Guidance for Medical Devices paper here.

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Filed Under: FDA Regulated, Featured, Medical Devices, Quality Management, Tamar June Tagged With: , , , ,