When you feel a headache coming on, you don’t want to fact-check your aspirin bottle’s history for the latest recall announcements. You want to trust that the makers of the Aspirin have supplied you with a safe product, and that it’s going to make the pain to go away. Unfortunately, however, history has given us reason to be wary. You’ve probably heard of the infamous Tylenol recalls. The first of which resulted in seven deaths and a quick return of 31 million units. The company was able to save face by reacting quickly to remove the dangerous products, and earn back the trust of the consumer. The second recall however, was a different story. The 2010 recall took 20 months of filed complaints before Tylenol finally pulled 60 million units of their product from shelves.
What went wrong here? At first glance, the issue appears to be in the amount of time it took the manufacturer to react to complaints. But think again. The real concern here is the fact that this was Tylenol’s second major recall. What did they not learn the first time around?
Here’s the secret about recalls: They can be prevented very easily.
To begin, the government has set up regulations to prevent contamination and ensure product quality, like the Current Good Manufacturing Practices based regulations (CGMPs). This regulates manufacturing defects or, like in Tylenol’s case, contamination. It states that in the manufacturing process if contamination is discovered during the production of a drug, manufacturers cannot distribute the product. They must correct the problem, using the accepted “corrective action plan” and document all outcomes.
The so-called Corrective Action Plan is a suggested set of prescribed steps that a company must follow. It does not state that they must be maintained in a single digital backend (ex: database), only that documented evidence must exist. When companies follow this plan, but have information spread around various sources (like Excel, paper folders in a file cabinet or another internally developed access based system), it becomes daunting when a mishap like Tylenol’s occurs.
There is a solution that leading pharmaceutical companies are employing that allows companies to streamline these regulated processes called an Enterprise Quality Management Solution (EQMS). EQMS can help protect a pharmaceutical company’s brand and market share by making sure the problem in question never even leaves the factory in the first place. While there is a cost to getting new materials, it will still be cheaper than scrapping an entire production lot while saving the company’s reputation from the downward spiral that occurs after product recalls. Product recall involves not just the recall of the products in question, but costs associated with replacement, remediation, legal and market rehabilitation can be a few orders of magnitude greater. EQMS also integrates with other business critical systems like ERP, MES and PLM to trigger quality alerts with the supply chain, improving communication and aiding in both the internal and external quality risk management process. This means a recall can be stopped before it makes disastrous headlines. Using a solution like EQMS allows a company to detect issues early in the supply value chain, thus reducing or even eliminating the product safety issues before it reaches the consumer. As the Deming 1-10-100 rules state, the earlier in the value chain you discover issues, the lower the cost of remediation will be. When consumer safety is involved, this is not only a critical risk management strategy, but also a responsible management.
Many companies have been using EQMS to monitor compliance and regulation for years. However, antiquated manual, paper-based processes are still being utilized in an automated era. Updates are being sent via phone or email, instead of real-time, electronic updates, and are preventing companies from making timely (i.e. 20 months), qualified business decisions. Worse yet, upon an issue is detected once the product is in the market, there is a lack of traceability diminishing effective and timely resolution. With automated systems, if there is a contamination issue with a product, the quality system will record the issue into the database and alert key personnel about the problem, allowing all parties to effectively quarantine and resolve.
An EQMS can offer manufacturers a historic look back at previous problems with a product that can inform future production efforts. As previous issues are logged in the central EQMS repository, managers can see what actions were taken and find the most effective way to resolve a current problem, or head off a future one. With this data, not only can trends be identified, but also predictive analytics can be employed to look ahead before critical issues occur. Now, manufacturers and suppliers can be more proactive and reflective on what they’ve done in the past to eradicate issues and apply preventive measures to reduce or eliminate recurrence.
With all this in mind, here are the four best tips for vendor risk management that may help prevent a recall:
- Evaluate and audit your vendor network, regularly at first and risk-based frequency thereafter. After evaluation, many companies come to discover that roughly 20% of their vendors are no longer supplying products.
- Update vendor or supplier score cards. By dividing each supplier score card up into high and low-risk areas, you can help drive continuous improvement.
- Be sure audits are up to date. Depending upon industry, Standard Operating Procedure (SOP) audits may be called for every 3 to 5 years, whereas other risk-based audit procedures call for some suppliers to be audited once every 6 months to 1 year. This should not be a set-in-stone frequency; be proactive and trigger audits based on issues.
- Finally, create a collaborative relationship with your supplier (as opposed to an adversarial one based around cost). Removing the emphasis of price in a supplier relationship and replacing it with a focus on trust and quality among partners in the supply chain opens the door to more collaborative ideas. EQMS allows all, or at least critical suppliers, to be part of the same quality system, thus, collaboration and fostering supplier relationship become part of the quality plan.
Not only do these tips impact operational efficiency, but they help to positively impact a company’s bottom line as a result of fewer recalls and eliminating the cost that is associated with poor quality. In fact, businesses have been able to present tangible benefits of implementing an EQMS in just the first three years of implementation. We are seeing a 32% jump in utilization (i.e. reporting events that are effectively investigated and acted upon allowing better for quality, safety and reliability). There is also a 7% reduction in open records as they are effectively being addressed and resolved resulting in better quality. And, companies are performing this with a 44% reduction in cycle times as they are becoming operationally efficient with a timely resolution leading to improved cost management and bottom line.
Proactive prevention is the best lesson companies can learn when it comes to avoiding a potentially damaging (or life-threatening) recall. The goal of an EQMS is to get companies to work smarter, not harder. Automation grants a company a better position to gain greater visibility and efficiency across the entire supply chain. And not only does proactively preventing contamination keep customers happy and healthy, but also improves a company’s top and bottom line!
