This is the second post in a three-part series on Supplier Quality Management also known as SQM. In the first post our long tme guest blogger, Chuck Intrieri of The Lean Supply Chain, gave us 5 core metrics to evaluate supplier performance using supplier quality management and a 4 step process to execute. In today’s post, Chuck will take it a step further and break down metrics  and issues to look out for by 5 main industries:

  1. Pharmaceuticals
  2. Medical Devices
  3. Consumer Goods
  4. Food
  5. Technologies

Review of SQM Metrics and Issues Across 5 Core Industries

#1: Pharmaceuticals

Recommended Metrics for FDA Collection & a 6 Step Process for SQM Review

Trend Metrics Collected per Product:

  1. Confirmed Product Quality Complaint Rate by Product
  2. Batch Reject Rate by Product
  3. Confirmed OOS (Out-of-Specification) Rate (Drug Substance & Drug Product) by Product

Trend Metrics Collected per Site

  1. Confirmed OOS Rate (Drug Substance & Drug Product) by Site
  2. Batch Reject Rate by Site

Metrics Identified as Important but Difficult to Compare

The following metrics are important and among the most difficult to make comparable for external reporting to the FDA..

Quality Metrics by Product

Management should have a formal SQM process for reviewing the pharmaceutical quality system on a periodic basis. This review should include:

#2: Medical devices

In their effort to successfully acquire new customer contracts and deliver quality products through SQM, medical device manufacturers face the following challenges.

#3: Consumer goods

Eight dimensions of SQM can be used at a strategic level to analyze quality characteristics. The concept was defined by David Garvin. Some of the dimensions are mutually reinforcing, whereas others are not—improvement in one may be at the expense of others. Understanding the trade-offs desired by customers among these dimensions can help build a competitive advantage. Garvin’s eight dimensions can be summarized as follows:

  1. Performance: Performance refers to a product’s primary operating characteristics. This dimension of quality involves measurable attributes; brands can usually be ranked objectively on individual aspects of performance.
  2. Features: Features are additional characteristics that enhance the appeal of the product or service to the user.
  3. Reliability: Reliability is the likelihood that a product will not fail within a specific time period. This is a key element for users who need the product to work without fail.
  4. Conformance: Conformance is the precision with which the product or service meets the specified standards.
  5. Durability: Durability measures the length of a product’s life. When the product can be repaired, estimating durability is more complicated. The item will be used until it is no longer economical to operate it. This happens when the repair rate and the associated costs increase significantly.
  6. Serviceability: Serviceability is the speed with which the product can be put into service when it breaks down, as well as the competence and the behavior of the serviceperson.
  7. Aesthetics: Aesthetics is the subjective dimension indicating the kind of response a user has to a product. It represents the individual’s personal preference.
  8. Perceived Quality: Perceived Quality is the quality attributed to a good or service based on indirect measurement.

#4: Food SQM Requirements and Issues

Mandates by the FDA and the USDA such as HACCP procedures and ISO 22000-based food safety management systems are the basis for many SQM and compliance programs in the food and beverage industry. Companies know all too well that improperly trained employees, substandard products, or poor service can cost millions of dollars a year in lost sales and leave the door open to more severe consequences.

A potential regulatory mechanism for rolling out quality metrics can be linked to Title VII (Drug Supply Chain Provisions) of the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012.  Title VII gives FDA new authorities to help ensure the safety, effectiveness, and quality of drugs in the United States. The much talked about Quality Metrics are linked to Section 704 (Electronic System for Registration and Listing), Section 705 (Risk-based Inspection Frequency) and Section 706 (Records for Inspection).  Section 704 requires FDA to maintain an accurate electronic registration and listing database that is searchable, and uses the Unique Facility Identifier (UFI) to link to other relevant FDA databases in order to identify and inform risk-based inspections. Section 705 requires FDA to replace the previous two-year drug inspectional frequency requirement with a risk-based inspection schedule for domestic and foreign drug facilities. Inspection criteria include the establishment’s compliance history and the inherent risk of the drug being manufactured.  Section 706 allows FDA to obtain certain records from a drug manufacturer in lieu of, or in advance of an inspection. Quality metrics is one example of information that can be provided to FDA in advance of an inspection.

In December 2013, the International Society for Pharmaceutical Engineering (ISPE), based on the work of the ISPE Quality Metrics Project Team, issued a White Paper (here) on quality metrics for submission to FDA which included a list of quality metrics that could be used for initial discussions with the Agency. The quality metrics (as identified by the relationship to the product and FDA’s six systems) include batch rejection rate, rework and reprocessing rate, confirmed out-of-specification (OOS) rate, unconfirmed OOS rate, confirmed “critical” complaints rate, and % Annual Product Quality Reviews completed on time. These metrics are better known as “lagging indicators”. The White Paper did not recommended reporting of recalls, field alert reports (FARs), biological product deviation reports (BPDRs) and inspection findings as part of the initial list, since these are already available to the FDA.

The new FDA Food Safety Modernization Program (FSMA) is in the process of completion.

New regulatory requirements

New FDA powers

FDA is required to establish a product tracing system within FDA to improve the agency’s capacity to effectively and rapidly track and trace food

#5: Technologies : SQM

LA means Service Level Agreement with a trading partner or company. SLM is Service Level Management

SLM Manage quantity and quality of IT service needed:
SLM percentage reduction in SLA targets missed
SLM percentage reduction in SLA targets threatened
SLM percentage increase in Customer perception of SLA achievements via CSS responses
SLM percentage reduction in SLA breaches caused because of third party support contracts (Underpinning Contracts)
SLM percentage reduction in SLA breaches caused because of internal Operational Level Agreements (OLA’s).
SLM Deliver service as previously agreed at affordable costs:
SLM total number and percentage increase in fully documented SLAs in place
SLM percentage increase of SLAs agreed against operational services being run
SLM percentage increase in completeness of Service Catalogue versus operational services
SLM percentage improvement in the Service Delivery costs
SLM percentage reduction in the cost of monitoring and reporting of SLAs
SLM percentage increase in the speed and accuracy of developing SLAs.

What industries do you apply SQM too? Let me know in the comments section below.

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