Executive Briefings

Pharmaceutical Companies Need to Revamp Supply Chains to Ensure Quality

Over the last several years, the biopharmaceutical industry worldwide has intensified its focus on quality in manufacturing - but with little to show for it. Manufacturing quality levels remain well below those in other industries, such as semiconductor manufacturing and aerospace. And major recalls are still all too common.

Pharmceutical Companies Need to Revamp Supply Chains to Ensure Quality

From 2010 through 2014, 11 of the top 15 biopharmaceutical companies (by revenue) received warning letters from the U.S. Food and Drug Administration. Such problems can come at a steep price - in some cases, hundreds of millions of dollars in lost revenue, remediation costs that run in the tens of millions of dollars, and a big hit to the company's reputation.

There are a number of reasons for the persistent quality challenges. First, the focus on quality has itself too often meant racing to put out fires when compliance issues surface, instead of addressing the root causes of quality problems. Increased investment in areas such as quality personnel or software can help in the short term, but the resulting improvements are rarely sustained and are not always commensurate with the investment. Second, when a company does implement a program aimed at delivering long-term results, it is often rolled out in a rigid, one-size-fits-all manner that ignores differences among manufacturing plants and their progress in improving quality. The result can be programs that are poorly matched to individual facilities and that miss the root causes of their quality problems. Further, such programs typically reside exclusively within the quality function and fail to address organization-wide processes that can have a major impact on quality.

It doesn't have to be this way. Companies can improve the effectiveness and efficiency of their quality efforts by crafting and implementing a comprehensive program that takes the entire supply chain into account, from the materials provided by key vendors to production, packaging, disposition and distribution.

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From 2010 through 2014, 11 of the top 15 biopharmaceutical companies (by revenue) received warning letters from the U.S. Food and Drug Administration. Such problems can come at a steep price - in some cases, hundreds of millions of dollars in lost revenue, remediation costs that run in the tens of millions of dollars, and a big hit to the company's reputation.

There are a number of reasons for the persistent quality challenges. First, the focus on quality has itself too often meant racing to put out fires when compliance issues surface, instead of addressing the root causes of quality problems. Increased investment in areas such as quality personnel or software can help in the short term, but the resulting improvements are rarely sustained and are not always commensurate with the investment. Second, when a company does implement a program aimed at delivering long-term results, it is often rolled out in a rigid, one-size-fits-all manner that ignores differences among manufacturing plants and their progress in improving quality. The result can be programs that are poorly matched to individual facilities and that miss the root causes of their quality problems. Further, such programs typically reside exclusively within the quality function and fail to address organization-wide processes that can have a major impact on quality.

It doesn't have to be this way. Companies can improve the effectiveness and efficiency of their quality efforts by crafting and implementing a comprehensive program that takes the entire supply chain into account, from the materials provided by key vendors to production, packaging, disposition and distribution.

Read Full Article

Pharmceutical Companies Need to Revamp Supply Chains to Ensure Quality