Measure and monitor the cost of poor quality
Philip Crosby, an expert in quality concepts, had these reflections on quality: "It is erroneous to think that quality is
intangible, and therefore unmeasurable. It is precisely measurable by the oldest and most respected of means—cold, hard cash."
It is also called "the price of nonconformance" but this is "an oversimplified definition . . . it is the costs associated
with avoiding, finding, making, and repairing defects and errors"(12). The cost of nonconformance is part of the ongoing,
day-to-day operating costs and is usually hidden in the operations (not measured). Examples are out-of-specification results,
investigations, rejects, rework, expired components, unused labeling, production delays, waste, and so forth. The cost of
nonconformance is a powerful tool for quantifying and reducing operating costs based on solid science and improved quality.
The concept of "do more with less" can be translated into "make more product and profit with less waste and rework." It can
be effective even if narrowly focused on just one part of the process. Very few companies are effectively looking at this.
"[F]inancial measurements generally aren't used to validate quality's impact on profitability and costs." Most companies have
absolutely no idea how their day-to-day operating costs are affected by poor quality.
Measuring and monitoring the cost of nonconformance is going to be increasingly important for our industries. Profit margins
are facing growing global pressures from government price controls, larger purchasing power (both public and private), cross-border
pricing, Rx-to-OTC switches, loss of patents, and so forth. It is already important to identify opportunities for improvement
and hidden value and convince management to do more. Finding the cost of compliance can stop the debate because the returns
on investment can be enormous. According to Crosby, "most organizations spend 25–40% of operating cost in nonvalued activities
(the price of nonconformance) because requirements are not clear, communicated and consistently met" (13).
A company's cost of nonconformance can increase because:
- Processes are not fine-tuned or made robust in development before technology transfer. Development staff are not given adequate
time (based on activities being driven by filing deadliness) to do the job properly.
- Some of the process and specification parameters that are agreed to and established in regulatory filings to obtain approval
are difficult to meet in manufacturing.
- Validation is based on development parameters, before the regulatory filing process.
- Regulatory affairs does not want to reopen a file by submitting an amendment or supplement (and there is no structure or process
for reaching a corporate decision in this regard).
How to establish an appropriate quality system
Existing products and processes must be the focus for implementing the quality system. However, it will be years before we
approach the ideal cradle-to-grave quality system model. The industry must do what it can, as a practical matter, to effectively
reengineer the moving train while the new tracks are being put in place. Dealing with existing products and processes boils
down to dealing with and improving the current reality of our products and manufacturing processes.
To start, apply a hazard-control approach to select an existing product and process for improvement. Define the key practical
steps toward improvement while proving value to build management support. Then apply quality-system thinking to problems found
during the improvement steps.
A quality system should be appropriate for the degree of risk presented by the product, the complexity of the product in the
manufacturing process, the intended use of the product, and the size and complexity of the manufacturer.
Major sections of FDA's quality system model include the following:
- Management responsibilities
- Manufacturing operations
- Evaluation activities.
Management responsibility. The quality system should hold senior management responsible for:
- The effectiveness and robustness of the quality system
- Ensuring the quality system is meeting customer needs
- Demonstrating commitment to developing and maintaining their quality system.
- Setting implementation priorities and developing action plans
- Providing leadership by being an active participant in the quality-system design, implementation, and monitoring including
ongoing review of the system
- Being an advocate of continual improvement of the quality system
- Providing adequate resources to support the objectives of the quality system and there should be measurable goals that are
monitored regularly for the operation
- Structuring the organization to ensure quality system includes the authority to oversee the cause and effect of the manufacturing
- The manufacture and production of quality products
- Documenting the structure to ensure that interactions are defined and understood
- Ensuring the quality system is in compliance with CGMP regulations
- Ensuring the quality system provides organizational guidance, the quality standards to be followed, the policies to implement
the quality-system criteria and supporting objectives, and the procedures needed to establish and maintain the quality system
- communicating the vision of quality to the organization
- ensuring the quality system is communicated and understood by all personnel and contractors.