Enterprise Quality Management Solution for Medical Device Companies

Managing Quality Across the Enterprise

2

Why Is Quality Important to Your Business Ecosystem?

R&D

PRODUCT INTROEXPANDING MARKETS

GROWTH & MATURITY

LIFE SCIENCE INDUSTRY

Brand protection

Globalization

$ Cost, Price & Margins

Vendor Network

Speed to Market

Consistent Delivery

Compliance

Sparta Systems Proprietary

The Challenge

3

Company Develops products to satisfy the

needs of consumers

Finance & PurchasingFocused on performance management

and reducing costs

SuppliersSupplies safety and high quality

raw materials and packaging

NO QUALITY

VISIBILITY

Issue Resolution Cost:

CAPA 2

Change Control 2

Deviations 2

CAPA 3

Change Control 3

Deviations 3

DISPARATE

PROCESSES CAPA 1

Change Control 1

Deviations 1

ConsumerDistributor

WALL ST

1x 10x 100x 1000x…

Contract Manufacturers

& Packagers

Handles outsourced manufacturing

and packaging for brand owner

NO QUALITY

VISIBILITY

Sparta Systems Proprietary

Addressing the Challenge

4

Path to Success

ERP $

End-to-End Quality ManagementInternal Facility Worldwide Facilities Vendor Facilities

Functional Area

Internal Manufacturing

External Manufacturing

R&D Supplier

Management

Geography

Country Region Business Unit

Quality Process

CAPA Deviation/ Incident Auditing Complaint Handling Change Control OOS/OOT

Sparta Systems Proprietary

The Proven Quality Solution

5

Company

Finance & Purchasing

ConsumerDistributor

WALL ST

EQMS: Harmonized Global

Processes

Contract Manufacturers

& Packagers

Suppliers

500k Global Users 700 (+) Implementations Best Practice EQMS Workflows Top 35 Pharmaceutical companies Top 13 out of 15 Med Device

Companies Meets FDA & global regulatory

requirementsSparta Systems Proprietary

Sparta Systems’ Customers

6

Sparta Systems Proprietary

EQMS Value Pillars

7

Business Value Protect Brand Image

& Liability

Measure Brand Valuation

EQMS Benefit Reduce Consumer Facing

Events

Business Value Reduce Event Cycle

Times

EQMS Benefit Continuously Improve

Processes

Measure Increased Resource

Efficiency

EQMS Benefit Connect All Solutions &

Processes

Business Value Single integrated

platform

Measure Reduced Technology

Costs

IT EFFICIENCY

OPERATIONAL EFFICIENCY

Business Value Reduce Global

Production Problems

Measure Reduced Waste Costs

EQMS Benefit Pinpoint and Contain

Issues

SUPPLY CHAIN MGMT

RISK/COMPLIANCE MANAGEMENT

Sparta Systems Proprietary

Executive

Dashboards

Analytics

Analytics:

Actionable Insights

Business Insights

Pre-structured

Analyses

Finance & Purchasing

EQMS Visibility

8

Company

ConsumerDistributor

WALL ST

Contract Manufacturers

& Packagers

Suppliers

Sparta Systems Proprietary

9

SPEED

QUALITY INTELLIGENCE

Addressing the Visibility Challenge:What’s Broken?

Role Business Questions Today

Executive

What quality events are happening

across the global business

environment by product, process,

region and function?

Quarterly

Consumer: Senior Manager

What’s preventing us from

shipping product/filling orders?Monthly

Consumer: QA Manager

What is the origination of our

problems?

How deep are our problems?

Weekly/

Monthly

Consumer: Auditor

What is the root cause of our

issues and how deep is the issue?

How can we be more proactive in

managing our product quality? (i.e.

SOPs, training, change

management)

Days/

Weeks

Monthly/

Quarterly

Analyst

Are there any positive or negative

trends that impact product quality

(i.e. waste, warranty, recall costs,

etc.)

Weekly/

Monthly

Business

Needs

Insights

needed for

fact-based

decisions

Current

Reporting

Paradigm

Current

Output

Self-service analytics users were 85% more

effective in finding the information in the

required amount of time. (Aberdeen Group, April 2012)

Companies that inject analytics into their

operations show productivity rate and

profitability that are 5-6% higher than their peers. (Harvard Business Review, October 2012)

VOLUME

Role Business Questions TWA

Executive

What quality events are

happening across the global

business environment by product,

process, region and function?

Minutes /

Hours

Consumer: Senior Manager

What’s preventing us from

shipping product/filling orders?

Minutes /

Hours

Consumer: QA Manager

What is the origination of our

problems?

How deep are our problems?

Minutes /

Hours

Consumer: Auditor

What is the root cause of our

issues and how deep is the issue?

How can we be more proactive in

managing our product quality?

(i.e. SOPs, training, change

management)

Minutes /

Hours

Analyst

Are there any positive or negative

trends that impact product quality

(i.e. waste, warranty, recall costs,

etc.)

Minutes /

Hours

Speed to Insights and Volume of Insights

Business

Needs

TWA

Enabled

Insights

needed for

fact-based

decisions

Sparta Systems Proprietary

ROI Benefits to Quality Management

Value Pillar Examples

11

From multiple project solutions/data to a single platform

All processes connected to a single data source

EFFICIENCIES GAINED FROM…..

Platform

Consolidation

Infrastructure/Hardware

Integration

Development and Support

Organizational

Efficiencies

Process effectiveness

Reporting effectiveness

Aggregated KPIs

Distribution

NVA efforts

Maintenance

& Support

Hardware

Software

Data backup

Upgrades

+ +

Key Reasons to Implement an EQMS IT Efficiency

ERP $Fragmented Pillar Systems

Q Q Q

Q Q

=

VALUE

Point

Solution# Quality

ProcessesX XSites

Sparta Systems Proprietary

Sparta Systems Proprietary

12

Key Reasons to Implement an EQMS Operational Efficiencies

Role Key Responsibilities EQMS Benefit

Executive • KPI• Critical information

• Real-time Info• Push Report Visibility

Regulatory Affairs • Regulatory filing• Risk assessment• Safety/Compliance

• Visibility• Signaling• Timely reporting to Regulatory

Bodies

QA Manager • Task prioritization• Problem areas• Audit management

• Continuous improvement• Resource efficiency• Holistic Quality management

Manufacturing/ Operations

• Tasks list, completion, and priorities

• Ops reporting

• Critical Issues detection• Business rules based workflow• Visibility

35%

−Cost of Managing a growing

number of RecordsCost of Managing

Records Today

Cost of Managing

Records TodayReducing Number of Records

Given 35% Efficiency Gains−VS

Sparta Systems Proprietary

Product Quality and Value directly correlates to Brand

- Affects brand integrity

- Corporate Reputation

- Profitability (market share)

- Depends on the recall management

Key Reasons to Implement an EQMSBrand Image Protection

RECENT EVENTS AND BRAND IMAGE

13

iPhone antenna

issues/ Foxconn

Labor Issues

B787 Li-Ion

Battery Fires

ICD

(defibrillator)

recalls

Microscopic

design error

(Sandy Bridge)

83%78%

59%

70%

17% 22% 41% 30%

Pre-Recall Recall 1 Recall 2 Post-Recall

Positive Perception Negative Perception

Brand Sentiment

Sparta Systems Proprietary

Sparta Systems Proprietary

RECALL COST ELEMENTS

Recalls due to quality issues, product safety, regulatory bodies

• Undermines trust and customer confidence

• Long time to recover reputation, goodwill and equity

• Proactive recall – minimal negative impact

Key Reasons to Implement an EQMSRecall Costs

Costs of

Customer

Dissatisfaction

Operational

Costs

Regulatory Fines

& Penalties

Litigation

Costs

Long-Term

Impact on Brand

Sparta Systems Proprietary14

Sparta Systems Proprietary

Product RecallsA Threat to Brand Protection and Consumer Safety

15

Senior Team members manage recall

risk through supplier indemnification 2

58%

RECALL RISKMANAGEMENT

1 FDA Enforcement Statistics Summary, Fiscal Year 2012

2 Recall Execution Effectiveness Report. Deloitte, GMA, FMI and GS1. May 2010

3 Capturing Recall Costs: Measuring and Recovering Losses. Ernst & Young, GMI, Oct. 2011

Recalls: Class I, II and III

5,58

5

5,77

8 8,06

5

9,36

1

9,28

8

9,46

9

07 08 09 10 11 12

Recalled Products2007-20121

10.7

7.88.4

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Imp

act

of

Rec

all

on

Sh

are

Pri

ce2

Days from Recall Announcement

21%

52%

of Recalls were due to

supplier and contract

manufacturer issues2

High

Medium

Low

Recall Costs Scale X

$90,000,000

$35,000,000

$10,000,000

Sparta Systems Proprietary

16

For additional information on Sparta Systems, please visit:

www.spartasystems.com

Or contact us at: marketing@spartasystems.com