The Role of Enterprise Quality Management Software in CPG

EQMS typically allows an organization to centrally manage and automate critical processes for ensuring compliance and quality across the enterprise. Core capabilities of EQMS generally include but are not limited to:

- Non-Conformances / Corrective and Preventive Actions

- Audit Management

- Change Control

- Sampling and Testing

- Quality Planning

- Supplier Quality Management

- Risk Management

- GMP and HACCP

In the CPG industry, these capabilities are just as important as they are in the life science or electronics manufacturing industries; it is just that they are much more likely to be managed through home grown disparate databases or purely paper based systems. If you would like to learn more about EQMS in general please follow this link, but there are some specific benefits of EQMS to the CPG industry that should be called out here:

- Improve finished product quality

- Lower the cost of quality

- Improve manufacturing efficiency

- Improve supplier performance

- Build quality and compliance into production processes

- Create collaboration between research and development and manufacturing on quality

- Improve the success of new products being introduced to the market

- Provide visibility into key quality indicators

Experience has proven time and time again that adhering to best practices in change management, culture, executive sponsorship, and proper planning often are just as important as the the technology itself. For these reasons following the below three steps can have a tremendous impact on the success of deploying EQMS in the CPG space.

Step 1: Make quality an executive priority and start changing the culture towards one of continuous improvement. Far too often grass roots efforts start out with a lot of momentum but if the executives don’t believe in it the trend is more often than not for the initiative to lose steam and not have a truly enterprise wide benefit.

Step 2: Begin to harmonize disparate systems and business process into a standardized and flexible framework for creating operational excellence and building quality into the business. Many companies today just have too many systems and they are often disjointed and difficult to maintain. By streamlining the IT environment and focusing on business process quality can begin to become a strategic objective that is intelligently built into business processes.

Step 3: Support changing culture and business process with an Enterprise Quality Management Solution that centrally manages core quality capabilities. With the executive sponsorship, culture, and business process pieces of the puzzle figured out, it is time to start moving on to software. This software should be designed to centrally manage quality and compliance across the business and start with well proven core capabilities like those listed above.

EQMS in the CPG Industry

In the CPG space it is all about innovation, growth, and building billion dollar brands. Unfortunately, for many CPG companies, quality and compliance have not yet been an area of focus or investment – but this is starting to change. As CPG companies want to protect the brands they have, grow into new markets, and become more efficient, they are realizing that centrally managing quality as a key executive priority can be a strong competitive advantage. These companies are learning from other industries (like life sciences), and are now focusing on executive leadership around quality, creating a culture of continuous improvement, building quality and compliance into business processes, and supporting it all with an Enterprise Quality Management Software deployment.

At a high level, the CPG industry ranges from companies that produce food, to cosmetics, to diapers, to soap, to razors, to batteries; and everything in between. The CPG industry is also dominated by large global companies like Proctor and Gamble or Unilever and for these companies to compete effectively it is all about building scale and Billion Dollar Brands.

To successfully build and grow these brands, CPG companies typically take a portfolio approach to managing their brands and focus on strategies that enhance brand loyalty, spark innovation, or help open new global markets. Although once a company has effectively built a brand, and often even before, effort and resources should also be allocated to preserving brand equity and managing the risk of non-compliance, poor quality, or recall type events.

Managing Risk to the Brand

A quality issue, non-compliance event, product recall, or consumer safety issue can all critically impact a brand if not handled properly. The impact is almost always revenue first but if risk is not properly mitigated and quality is not managed well, the impact can quickly become a brand issue as well, which is much more damaging in the long run.

A great example of how having a good quality system in place can save a brand was the 1982 recall of Tylenol products from the shelves. This recall immediately hit the company for over $100 million dollars of products being pulled from the shelves but because J&J quickly and honestly communicated to the public that their quality systems were up to the task of remedying the situation the revenue hit was only short term and the brand survived.

A more recent example again comes from a related industry, automotive. In 2009 Toyota had to recall huge numbers of cars after multiple crashes and deaths because of unintended acceleration hit the mainstream media. In this case it probably can’t be argued that executives handled the situation in the best way possible but again it can be argued that because of the public’s belief in quality management at Toyota the recall was only a short term hit to revenue and not a long term hit to the brand.

But the question is if CPG companies have made the same investments that Life Sciences or Automotive companies have. Unfortunately, for many companies, the answer is “No” at CPG companies and it is time to start focusing on a lack of supporting quality systems as a major risk to the company. Luckily, as more and more CPG companies have become large conglomerates it is not uncommon for the same company to have a Life Sciences arm and a CPG arm. At these companies, we are starting to see a sharing of best practices across divisions and the roll out of Enterprise Quality Management Software (EQMS) at these companies.

Stay tuned for next week’s part II where we will explore the role Enterprise Quality Management Software (EQMS) can play in addressing the challenges above.

Unfortunately, nothing seems to be as easy as it used to be. Delivering a product to market today requires a complex and distributed value chain; involving many different companies all with different responsibilities, including: engineering, manufacturing, supply chain, customer service, compliance and more. In such an environment, quality management has been forced to move beyond just the four walls of the plant or the quality department itself. Suppliers and customers now need to be brought into the fold and this can only be accomplished if companies take specific steps in how they manage their people, business processes, and technology.

People

Leading companies take quality seriously and it starts right at the executive level. Executives set the tone and a passion for quality should flow throughout the organization. Leading companies also believe in collaboration and communication. Quality is not viewed as a department but a shared responsibility that everyone takes pride in. Finally, there is a general belief in leading companies that the continuous improvement process is important, valuable, and a key factor in the success of the organization. These companies are not satisfied and are always looking for ways to get better.

Business Process

Improved quality is often about improved decision making, and making better decisions does not happen by accident. Leading companies have invested in the systems that help them standardize business processes so that the right information is delivered to the right decision makers at the right time. In the spirit of continuous improvement, these processes are also designed to be flexible so that as new best practices emerge the processes can evolve as well. Finally, companies should not be forced to continually reinvent the wheel. It is often the best approach to use automated workflow and alerting tools to build these processes, which is discussed more in the next section.

Technology

To help support all of these quality initiatives across the organization, more companies than ever are deploying Enterprise Quality Management Solutions (EQMS) to help harmonize systems and manage data centrally. This creates a single view of the truth and allows all parts of the organization to have a clear picture of quality in the organization. In regards to supplier management, top performing companies are also extending EQMS to include Supplier Quality Management (SQM). These systems allow companies to do more than just tradition supplier ratings or the collection of supplier test data; they provide web-based portals and collaboration tools to allow the real-time exchange of information between parties. Ultimately, creating a stronger relationship between companies and improving overall supply chain quality. Which all sounds well and good but does leave one big question?

Will Suppliers Agree?

We often get the question:

“I get it that SQM this will help us gain a better understanding of our supplier’s quality but will they agree to provide me this level of detailed information?”

This is a valid and often very important question to the overall success of a supplier quality initiative. In our experience, the response of a supplier can be mixed and it usually all comes down to trust and personal relationships. If the supplier does not trust the usually larger and more powerful retailer or brand owner then the initiative is in jeopardy from the start. However, if there is trust, and the supplier believes such an initiative is not just cost cutting but will help improve performance and create more of a collaborative partnership, the initiative is usually well received. So, from our perspective, suppliers will agree if it is positioned correctly. But of course, with all relationships that depend on trust and personal connections, starting small and building on past success is usually the best approach.

The seminars were intended to help local industry leaders gain an understanding of the approaches to quality management and assist them in developing, implementing and managing cost-effective Quality Management Systems. Core presentations were given by Jon Reich, Information Systems Manager for Synertec Asia, who discussed how to ensure critical Quality Management System processes are effectively managed, and how to assist your organization to reduce the cost of compliance. Matthew Kopecky, Director of Sales Support for Sparta Systems explored how Enterprise Quality Management Systems allow seamless integration of quality system processes, reducing cost and risk, and ensuring regulatory compliance.

In Malaysia Jon and Matt were joined by Rohani Mohammad, Director / Principal Consultant – Neoconsult, who provided real world examples and case studies from Malaysian companies implementing quality management systems. They were also joined by Thomas Halfmann, Managing Partner & Principal Consultant – HGP, who presented on gaining a greater understanding of IT system quality and compliance requirements, and practical solutions for reducing the cost and effort associated with their management focusing on computer systems validation.

What constitutes ‘substantial equivalence’ and a ‘predicate device’ is key for any device company as they bring next generation products to market.  This draft guidance is intended to replace prior revisions from 1986 and 1998 to reflect current thinking in the agency with modern technology and represents a window into the future of the device industry.  As such, this draft guidance is something that every device professional should seek to understand and monitor in the coming months to get a head-start on what’s in store for the industry.

In recent years though, the pharmaceutical industry has been globalizing, opening sites worldwide.  They are using multi-tiered material suppliers where identifying the actual source can prove to be difficult.  While this has been going on for years, the regulators were, and actually still are separate entities, serving their individual country’s needs.  However, a change is upon us. 

ICH Q 8 Q 9 and Q 10 have been finalized and are the current thinking at most of the major regulatory agencies including the US FDA.  These agencies are sharing information, co-inspecting sites, and collaborating.  They understand that they cannot all individually inspect and assure the quality of our global supply chain.  There are cases where one agency has inspected a site of a company and discovered issues.  Within days, another country’s regulators show up at another location of the same company, with the other’s inspection report in hand.

ICH Q 10 is the updated standard for GMP quality systems.  While 21 CFR 210 & 211 are still regulation, or law, the previously released “CGMP’s for the 21^st Century – A Risk Based Approach” Final Report (April 2004), “Quality Systems Guidance” (September 2006), and the “Q10 Pharmaceutical Quality Systems” (April 2009) provide the evolution of FDA’s current thinking.  Q 10 is truly an international standard, and US FDA embracing it as their standard goes a long way towards a global harmonization of regulatory inspection standards.

ICH Q 10 brings to the forefront management responsibility within a Pharmaceutical Quality System.  This means regulatory authorities hold corporate management ultimately responsible for product quality, no matter the source, or where in the tiers of the supply chain the problem originated.  Inspectors no longer are looking at individual manufacturing sites, but now have help globally in discovering the source. 

It’s a globalized industry, and the regulators are catching up!

It is important for companies to use their success to fund initiatives that work toward solving local and national problems. To that end, Sparta Systems community involvement and awareness activities for 2011 included donations and work with the following organizations and efforts:

- American Red Cross Japan Earthquake and Pacific Tsunami Relief

- Michael’s Feat – a local organization providing comfort and support for families facing a health crisis with newborn children 

- Good Counsel Homes – a private agency whose primary mission is to help homeless pregnant women by providing a loving family environment in a safe and secure shelter 

- American Cancer Society “Making Strides Against Breast Cancer” Walk

- Central Jersey Blood Center

- Operation Sleighbells (Family & Children Services of Monmouth County) – A historic annual holiday gift-giving program aimed at giving local area children a brighter holiday season 

- Food Bank of Monmouth and Ocean Counties

- Moorestown Charitable Works Club

Sparta Systems takes our responsibility as a successful company seriously, and aim to give back to the community and those in need around the world, no matter the time of year. We are proud to have done our small part in 2011 by contributing to these organizations and initiatives, and will continue to grow our list of corporate citizenship endeavors in the year to come.

2011 TrackWise User Conference Poster

The Annual North American TrackWise User Conference is the premier event for TrackWise users and the vendors who provide solutions or services that enhance TrackWise solutions. This year’s conference was held at the Park Hyatt Aviara in Carlsbad, CA. from November 6-10. The theme of this year’s User Conference was Access. Focus. Grow.  These are words that resonate well when talking about a 4-day gathering of TrackWise users.

- Access to information; Access to best practices; Access to Sparta Systems subject matter experts and TrackWise tips & tricks.

- Focus on maximizing quality management implementations; Focus on TrackWise.

- Grow your business; Grow your network; Grow your TrackWise implementation.

User conferences provide an invaluable opportunity for technology vendors to spend time with their customers in a setting mixed with presentations, workshops, networking and relationship-building activities. Meeting, learning and discussing at the user conference helps creates a strong bond between the users and your company. Your users become evangelists, promoters, and champions of your solutions and technology within their companies and with their peers. I love putting these events together and really enjoy seeing my company’s customers sharing in their successes while networking with other quality, compliance and regulatory professionals.

After each user conference I witness an increased surge in the activity of the TrackWise online user group (TUG). User groups are uniquely powerful tools for customers to stay in touch with others in similar job functions. A user group provides an environment where users can turn themselves into accomplished experts with your products. You’re creating a community of professionals who become champions in their organizations.

I look forward to beginning preparations for the next TrackWise user conference, and until then, hope to see you all actively participating in discussions on the TUG portal.

What Should You do to Prepare for FSMA Compliance?

During the past two installments, we discussed the elements and focus of FSMA and how FSMA oversight affects various participants in the food and beverage industry. We will continue with what best-in-class companies should be doing to prepare for the FSMA compliance.

The implications of the FSMA are hard to decipher and different based on who you are since many details of the legislation have yet to be worked out, and there is no specific timeline for promulgating regulations. Despite this, it is believed that substantial portions of the FSMA will be implemented over the next three years.  This is evidenced by the fact that some of the FSMA are effective immediately, and some in the next 24 months.

Glaringly obvious are aspects centered around electronic records. This would require food companies to make investments to capture, record and manage information electronically so it would be easy and efficient to quickly produce required records upon request by FDA. Many of the required traceability elements can be covered under an enterprise resource planning (ERP) system and the rest of the compliance elements under an enterprise quality management system (EQMS). Typical EQMS used currently by FDA regulated companies under 21 CFR 11 or 21 CFR 820 compliance can easily be adopted for FSMA compliance by the food industry. Such a system with FDA accepted best practices could help these companies in the following critical areas:

- Hazards analysis, control plans and mitigation

- Corrective and preventive action (CAPA) and remediation management

- Employee safety and competency training

- Audit management (internal and external)

- SOP management

- Supplier management

Based on how FDA has managed regulations in the life science sector, we can make educated guesses as to how FDA might tackle FSMA. FDA would first address the major food producers who ‘touch’ the biggest population segments and work their way down the chain. Since these major producers will be responsible for their suppliers, this approach makes sense as those large producers would cover a swath of smaller suppliers as part of the safety tracking and food safety/quality.

This does not mean, however, that you should take a wait-and-see approach until the enforcement gavel is dropped against you. You can start to prepare by looking into getting an electronic quality and compliance management system that would help you with electronic record keeping to stay abreast with the FSMA requirements.

Congress authorized criminal sanctions against corporate officers in 1938 under the Food, Drug and Cosmetic Act.  The Supreme Court has ruled that executives can be prosecuted, regardless of their knowledge that a crime was committed, known as the “responsible corporate officer doctrine.”  This doctrine only applies to life science, food and cosmetics executives because of the potential for their products to cause injury or death.  There is no requirement to prove “criminal intent.”

The use of this doctrine has been dormant since the 80’s, however, in recent years the Justice Department has actively been bringing the use of it back in a number of noteworthy cases.

Executives in organizations of all sizes should take their responsibilities seriously and ensure global, enterprise quality management systems are in place.  Tracking and managing quality issues consistently across the enterprise protects the consumers, protects the company and now also protects the executives.  Visibility and transparency of quality issues across the enterprise, in most cases, will prevent defective and dangerous products from reaching consumers.  While many companies have internal systems in place, most have not expanded their use to include external suppliers.

The trend in life sciences is to outsource.  Companies no longer develop, run trials, manufacture and distribute products within their own walls and control.  Today, companies use contract research organizations and contract manufacturers, and outsource functions such as IT and maintenance operations.  Today’s companies provide products developed in a complex ecosystem spanning countries and many tiers of suppliers.  The organization responsible for marketing the product and the “responsible corporate officer” are still liable for any problems, regardless of where in the supply chain the issue originated.  If I were a corporate officer in a position of responsibility, this alone would keep me up at night.

Never before has it been so important to have a comprehensive, global Enterprise Quality Management System to track and manage deviations and nonconformances, investigations, CAPAs, change management, audits, supplier qualification, supplier evaluations and scorecards.  These critical processes provide the clues to potential problems, and having visibility across many of these areas that have traditionally existed in silos is crucial to providing safe and effective products to the market.   It can also keep executives from prosecution, fines and jail.