Remedies for Supply Chain Headaches: Innovating Critical

Remedies for Supply Chain Headaches: Innovating Critical Process Manufacturing Oversight

March 23, 2016

Agenda

• Poor Critical Process Supply Chain Management Presents Problems for Medical Device Companies

• Role of Supply Chain Management in FDA’s Case for Quality

• How the Aerospace Industry can Serve as a Model for the Medical Device Industry

• Effective Strategies for Oversight and Management of Medical Device Supply Chain Based on Aerospace Industry Success

• Leveraging Successful Aerospace Strategies for the Medical Device Industry

2

Poor Critical Process Supply Chain Management Presents Problems for Medical Device Companies

3

Critical Manufacturing Process Supply Chain Oversight Issues

Impact Reason

360 units recalled by FDA Affected product did not undergo heat treatment hardening step leading to lack in material strength that may contribute to the deformation of the tip.

4

Tibial Articular Surface Inserter (Class II)

Source: www.accessdata.fda.gov

http://www.accessdata.fda.gov/


Impact Reason

46 units recalled by FDA An increased likelihood of failure of the CPU circuit board. This could result in a blank display or loss of mechanical ventilation.

5

Ventilator (Class II)




Impact Reason

193 cases recalled (6 per case) by FDA

Disposable single use MFEs processed through Gamma Radiation to a Sterility Assurance Level (SAL) of 10-6 per ISO 11137.

Product sterility is not assured

6

Sterile Adult Multi-Function Electrodes (Class I)



What are the Current Critical Process Problem Areas for Medical Device Industry Leaders?

7

OEMs/CMs

Complete elimination of critical process defects which affect our customers is problematic

Practical way to have visibility and control of processes at tier 2 and 3 suppliers is difficult to achieve

Communicating expectations at all levels of supply chain is difficult

Suppliers

Understanding/ obtainingcustomer requirements

Timeliness of orders – enough time to obtain requirements and proper processing

Communication/ Resolution of issues at lowertier suppliers

Results of Poor Supply Chain Management

• Problems with Patient Safety• Poor Product Quality• Product Recalls resulting in:

• Damaged company reputation and brand• Added costs• Loss of growth opportunities• Loss of productivity

• Increased Production Cost• Additional inspection and oversight• Scrap and waste

8

9

General Quality Management System (QMS) vs. Critical Manufacturing Process Approach to Supply Chain

Management

General Quality FocusGeneral Quality Focus

“1 mile deep on the critical process, 1 inch wide on the quality system”

“1 inch deep on the critical process, 1 mile wide on the quality system”C

ritic

al P

roce

ssFo

cus

Focus on critical manufacturing processes

Some Examples of Critical Manufacturing Processes for Medical Device Companies

• Assembly

• Batteries

• Cable & Wire Harness

• Casting / Forging

• Chemical Processing

• Cleaning

• Coatings

• Counterfeit Parts

• Electronic Displays

• Fluidics

• Heat Treating

• Machining

• Material Testing Laboratories

• Measurement / Inspection

• NDT

• Optics

• Packaging

• PCB

• Plastics - Extrusion

• Plastics - Injection Molding

• Plastics – Blow Molding

• Power Sources

• Printed Circuit Board Assemblies

• Raw Materials

• Reagents

• Software

• Sterilization

• Welding

What are Key Elements of Good Critical Manufacturing Process Supply Chain Management?

QMS Certification and 3rd Party Accreditation

Understanding impact on final product quality

Industry standards and best practices

Contract Review

Validation planning and

execution

SMEs with critical process

knowledge

Continuous Improvement

11

Role of Supply Chain Management in FDA’s Case for Quality

12

FDA CDRH 2016-2017 Strategic Priorities

Establish a national Evaluation System for Medical Devices• Goal: Increase access to real-world evidence to support regulatory

decision making• Goal: Increase the use of real-world evidence to support regulatory

decision makingPartner with Patients• Goal: Promote a culture of meaningful patient engagement by

facilitating CDRH interaction with patients• Goal: Increase use and transparency of patient input as evidence in

our decision makingPromote a Culture of Quality and Organizational Excellence• Goal: Strengthen FDA’s culture of quality within the Center for

Devices and Radiological Health• Goal: Strengthen product and manufacturing quality within the

medical device ecosystem

13

FDA CDRH 2016-2017 Strategic Priorities

• As part of the Case for Quality, collaborate with members of the medical device ecosystem to identify, develop, and pilot metrics, successful practices, standards, and evaluation tools that will be specific to the medical device industry and focus on assuring product and manufacturing quality.

• Identify external partnerships and mechanisms to support a sustainable, voluntary third party program that will utilize quality metrics, practices, standards, and evaluation tools to assess and promote medical device product and manufacturing quality within industry beyond compliance with regulatory requirements.

• Identify FDA policies and practices that will encourage adoption of metrics, practices, standards and evaluation tools that promote medical device product and manufacturing quality, and recognize efforts to exceed baseline expectations of compliance with regulatory requirements.

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Goal: Strengthen product and manufacturing quality within the medical device ecosystem

Aligning with Critical to Quality (CtQ)

15

Industry-Managed Accreditation

FOCUS: Ensure compliance to critical

manufacturing process requirements

Supplier Quality

Critical to Quality

FOCUS: Derived fromDFMEA/ PFMEA

FDA Case for Quality

FOCUS: Improve quality with a CtQ

focus

Support SupportSupport

What is the Medical Device Industry Doing to Align with FDA’s Case for Quality Initiative

16

Case for Quality Medical Device Industry-led InitiativeEnhanced focus on quality while maintaining compliance Supplier preparation and rigorous audit conducted by a technical expert will

ensure product quality and compliance

Promotion of a root cause approach to quality challenges

In-depth root cause corrective action responses and sustainableimplementation required for closure of all non-conformances

CAPA training provided to support suppliers

Enhanced transparency

Instant web-based access to real time supplier audit data and CAPA

Early warning system enables OEM/CM to take prompt preventative action

Stakeholder engagement OEM, CM, and supplier collaboration improves communication and identifies best practices to address quality issues

Regulatory focus on preventative quality practices Integrating audit criteria into day to day operations supports a proactive culture

of preventative quality and standardized operating practices

Critical to Quality methodology Ensuring compliance to critical manufacturing process requirements

AdvaMed Case for Quality Best Practices

17

How the Aerospace Industry can Serve as a Model for the Medical Device Industry

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Medical Device & Aerospace Industry Similarities

• Importance of quality and safety • Life-critical products/parts/components• Critical manufacturing processes• Critical Process Supply Chain• Complex multi-tiered Global Supply Chain• Strict regulatory oversight• High cost of product failure

19

Importance of Auditing the Process

20

Boeing 737

400,000 parts

Boeing 787

2.3 million parts

Boeing 777

3 million parts

Boeing 747

6 million parts

Boeing procures 783 million parts in one year

Adopting a process based approach to auditing enables oversight of supply chains on an enormous scale:

Source: Boeing - http://787updates.newairplane.com/787-Suppliers/World-Class-Supplier-Quality

Nadcap: Process to Manage the Aerospace Critical Manufacturing Process Supply Chain

Nadcap is an industry managed accreditation program for the Global Aerospace Industry.

Nadcap verifies that an audited company has the process capability, necessary equipment, controls, qualified personnel, sub-tier controls etc. to follow process requirements as defined by industry standards

and/or OEM requirements and validates actual compliance.

Compliance – Control – Cost Savings – Risk Reduction

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25 Years of Aerospace Success

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Over 7,500 global accreditations

86% of Suppliers credit Nadcap with improving quality in the aerospace industry.

> 85% of the top global aerospace companies participate in Nadcap

5,500 audits per year

17 critical processes

Nadcap OEM Subscribing Members

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Delivering Results

24

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

Nadcap OEM Subscriber CtQ Results

Suppliers

Internal OEM

Global Supply Chain Focus

25

Nadcap Supplier Audits (2015)

5,466 PRI Audits in 2015Over 5,500 audits projected in 2016

28831639

944

Americas Europe Asia

Effective Strategies for Oversight and Management of Medical Device Supply Chain Based on Aerospace Industry Success

26

Effective Strategies for Oversight and Management of Medical Device Supply Chain Based on Aerospace Industry Success

• Identify each critical manufacturing process technology where a process failure could result in defects affecting patient safety

• Prioritize the key critical manufacturing process technologies

• Address each critical manufacturing process separately in order to develop process requirements based on industry standards and best practices

• Follow the Nadcap methodology to validate the critical manufacturing process supply chain capability at all tiers

Process to Manage Medical Device Supply Chain Modeled after Aerospace Industry for each

Critical Manufacturing Process

28

Audit Criteria Developed

Process Evaluation/ Improvement

Corrective Actions Completed

Audit Reviewed

Auditors Selected

Medical Device Industry leaders manage all key

stepsAccreditation Decision

Audit Conducted

Process to Manage Medical Device Supply Chain Modeled after Aerospace Industry

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Audit Reviewed

Auditors Selected



Audit Conducted

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Audit Criteria Development

OEMs/CMs SuppliersPRI StaffEstablish

AuditCriteria

Audit Criteria:Document containing audit questions to determine compliance to

established industry standards and OEM requirements.


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Audit Reviewed

Auditors Selected



Audit Conducted

Auditors are Subject Matter Experts

• Audits are conducted by Subject Matter Experts (SMEs) for each critical process area

• SME Auditors are selected and approved by industry technical experts participating in the critical process Task Groups

• Auditors have considerable experience in each critical process they audit and receive initial and continued training from PRI and industry critical process Task Groups

32


33




Audit Reviewed

Auditors Selected



Audit Conducted

34

General Quality Management System (QMS) vs. Critical Manufacturing Process Approach to Supply Chain

Management

General Quality Focus

Crit

ical

Pro

cess

Focu

s

Critical Process Audits verify the Supplier has process capability, necessary equipment, controls, qualified personnel, sub-tier controls, and the ability to follow the process requirements as defined by the OEM requirements and/or industry specifications, and validates actual compliance.

“1 mile deep on the critical process, 1 inch wide on the quality system”

“1 inch deep on the critical process, 1 mile wide on the quality system”

Critical Process Audits consist of:

Verification of General Quality Systems (QMS)

effectiveness for the critical

process area being audited

Critical process-focused job audits

Critical Process specifications (audit criteria)

and OEM requirements

Example of MedAccred Audit Criteria


36




Audit Reviewed

Auditors Selected



Audit Conducted

Audit Results

eAuditNet

• All audits are electronically recorded in a in-house web based system called eAuditNet

Auditor

• The Auditor will submit into eAuditNet completed checklist, required attachments and write-up and grading of non-conformances

eAuditNet

• Upon Audit report submission, all automatic notifications are sent to designated OEM, Suppliers, PRI Staff and Auditors and time control metrics are automatically initiated and sent to OEMs

37


38




Audit Reviewed

Auditors Selected



Audit Conducted

CAPA Process

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Supplier• Supplier submits root cause analysis and objective evidence

of corrective actions for each non-conformance

PRI

• PRI Staff Engineer (SME) reviews the audit report, works with the Supplier to close and approve corrective actions

Task Group

• Reviews each non-conformance, approves or rejects the Supplier’s response• All issues must be resolved prior to closure of the audit by Task Group • Votes to accredit the Supplier if all corrective actions are acceptable• If the audit fails, Supplier must start the audit process again (initial audit)

PRI

• Issues certificate of accreditation (period of validity dependent on merit status) • Schedules next audit (reaccreditation audit)


40


Process Evaluation / Improvement


Audit Reviewed

Auditors Selected



Audit Conducted

Industry Managed Supply Chain Points of Oversight

41

Process Active Industry Management at all StepsAudit Criteria Developed Industry participants create and approve all audit checklists that are used in the program.

Auditors Selected Industry participants set the qualification criteria that is used to select auditors, participate in the interview process and provide on-going annual training

Audit Conducted OEM Subscribers can participate in an Observation Audit. This process allows the OEM Subscriber to attend an audit with the purpose of evaluating auditor performance and adequacy of audit criteria. Feedback is shared with Task Group and Management Council.

Audit Reviewed OEM Subscribers have access to all audits results including any historical audit data. Access is provided the moment the Auditor submits the results of audit into eAuditNet.


OEM Subscribers evaluate corrective actions that are put in place by Supplier to ensure they are adequate and effective. This oversight is documented by requiring a vote to Approve or Disapprove results of each audit

Accreditation Decision Supplier Accreditation is not granted until approval is provided by OEM Subscribers.

Process Evaluation/ Improvement Management Council is required to perform an annual audit of entire program to identify

areas for improvement.

Leveraging Successful Aerospace Strategies for the Medical Device Industry

42

Learning from the Aerospace industry, the Medical Device industry founded MedAccred

An industry-managed critical process supply chain quality program

Administered by the Performance Review Institute (PRI), a not-for-profit trade association, on behalf of leaders in the Medical Device Industry.

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Reduces Risk Improves Patient Safety

Assures Quality Products

Through MedAccred, the industry is…

44

… streamlining requirements through technical Task Groups,

MultipleCustomer Requirements

Medical device industry-agreed approach to Process Validation included in audit criteria.

45


… reaching further down the supply chain,

My Direct Suppliers

My Supply Chain

Tiers 1 & 2

Tiers 1 & 2

Tier 3

Tier 4

Tier 5

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… conducting fewer but more rigorous critical process audits with experienced technical experts,

Individual Customer Audits

MedAccred Critical Manufacturing Process Task Groups

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Active• Cable & Wire Harness

• Heat Treating

• Plastics - Injection Molding

• Printed Circuit Board Assemblies

• Sterilization

• Welding

Future (potential development)• Assembly

• Batteries

• Casting / Forging

• Chemical Processing

• Cleaning

• Coatings

• Counterfeit Parts

• Electronic Displays

• Plastics - Extrusion

• Fluidics

• Machining

• Material Testing Laboratories

• Measurement / Inspection

• NDT

• Optics

• Packaging

• PCB

• Power Sources

• Raw Materials

• Reagents

• Software

Why are Industry Leaders Utilizing Industry-led Initiatives to Address Critical Process Supply Chain Issues?

48

OEMs/CMs

Will bring consensus industry standards, best practices and OEM processing requirements to all levels of the supply chain

Participation will differentiate suppliers who are committed to improvement

Visibility of critical manufacturing process capability will reach all levels of supply chain

Suppliers

Improvedflowdown of requirements to all tiers in the supply chain. Reduced OEM audit frequency.

Audits by SMEs and a rigorous CAPA process will lead to improved process quality

Process discipline will lead to reduce scrap, rework, and improved quality

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… encouraging industry-wide involvement.MedAccred

Management Council

Task Groups

Cable & Wire Harness Heat Treating

PCBAPlastics

SterilizationWelding

Supported by quality and technical training

YOU

To get your company involved in MedAccred or for more information please visit:www.medaccred.org

Concluding Thoughts

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THE CONNECTION TO OURPATIENTS

Connie ConboyDirector, Business Development & [email protected]+1 724 772 7153

Joe PintoExecutive Vice President & Chief Operating [email protected]+1 724 772 7175

Hannah GodfreySr. Specialist, Business Development [email protected]+44 207 034 1247

Liu LeManager, PRI Asia [email protected]+86 10 6461 9807

Americas / International Europe Asia

Justin McCabeSr. Specialist, Business [email protected]+1 724 772 8693

http://www.medaccred.org/

mailto:[email protected]





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Remedies for Supply Chain Headaches: Innovating Critical