How Physio-Control, Osmetech And Kyphon Use 'Lean Quality' To Beat Problems

As the American economy continues to sour, device companies may turn to "lean" manufacturing techniques to save money and improve efficiency. Experts stress, however, that the lean approach should also be extended to quality systems.

"Obviously cost is of paramount importance to companies right now, but now is not the time to cut corners," says Nikki Willett, VP of marketing & regulatory affairs at Pilgrim Software's Tampa, Fla., office. "What we're trying to bring to the table is that lean principles are not just for manufacturing - lean also can be applied to quality."

As defined by the National Institute of Standards and Technology's Hollings Manufacturing Extension Partnership, a lean enterprise is one that "produces more with existing resources by eliminating non-value-added activities."

"The philosophy of lean is really looking at ... things [that] don't add value to the product or process," Willett told "The Silver Sheet." "So in this case, quality assurance is all about the process around the product. You can apply the same principles.

"Lean quality has led to outstanding results in terms of the reductions of cost, improvement of revenue and improvement of quality."

While lean manufacturing "is supposed to involve quality as part of its process," says Willett, "typically what goes on is that some of those processes within the quality area are not delved into as much as manufacturing." Companies are "looking at variability, looking at waste, looking at scrap ... and what ends up happening is, there's more focus on the manufacturing side than the overall quality side."

There are no FDA regulatory requirements pertaining to lean manufacturing, and the agency does not explicitly endorse the approach. But it also doesn't discourage it.

Linda Lovett of San Ramon, Calif.-based Lovett Consulting believes that implementing lean programs without integrating quality assurance and regulatory compliance is a recipe for failure.

"When you're planning to implement a lean program ... you want to bring the right people to the table - quality, regulatory, operations," Lovett said during a Sept. 23 session of the AdvaMed 2008 MedTech Conference in Washington, D.C.

"Don't make quality lean, but integrate quality throughout your lean process," advises Lovett, who was director of quality at Kyphon - a Medtronic division that makes orthopedic devices - from 2003 to March 2008. Medtronic acquired the company in November 2007.

"Get quality and regulatory [involved] up front so you don't make a mistake and forget a regulation or a requirement for your product, and down at the end quality raises its hand and says, 'I'm sorry, you can't do this,'" she says.

When properly done, manufacturers can use their quality management systems and lean programs to drive down the cost of quality and maintain compliance, Lovett says. "If you do that, some of the tangible and intangible results include increased capacity and revenue. You also increase your company's credibility, reputation and goodwill."

Trim 'Fat,' But Don't Use Crash Diet

Recently, some companies have had to trim the fat off their bottom line, Willett noted during the Sept. 23 AdvaMed conference session.

"They're trying these dramatic diets and ... trying to cut corners. Of course, from a quality perspective, we can't really do that," she says.

"Don't take the crash diet approach," Willett adds. "There are other ways - specifically by using lean methodologies - that can increase the productivity of your people, which of course is going to help you ensure the quality of the product, as well as increase your efficiency in your processes, which also can cut down costs."

Willett recommends that companies look at where they have "fat" by reviewing their quality processes and determining "some of the key areas that can be improved upon that can certainly look to both process and people for lower costs and better productivity."

Firms should ask themselves: "Where are the constraints? Where are the bottlenecks within the organization and within the processes in quality? Are there unnecessary steps?"

Growing companies, in particular, can gain from lean quality techniques because they often have unnecessary steps in their quality processes.

"If you have many different steps that are involved in a process and you can cut those steps in half, that means you're improving the overall lifecycle," Willett says. "That means the product can get pushed through the value chain faster and you can get products out to the market faster at a high quality."

Cycle times for reviewing and approving documents should be as fast and efficient as possible.

"One of the key things is how quick and how reliable your processes are for introducing or changing your policies and procedures, [including] introducing new ones based on new products or new material, or suppliers or acquisitions, or new companies that are coming on board, or changes based on customer feedback and complaints, or design changes," Willett says.

"There are some [firms] where we've seen that their document cycle is months long," she says. "So make the review process and the cycle time much faster."

Bob Dicheck, VP of quality & regulatory for Osmetech, says installation of an electronic-based quality system in 2005 was the key to helping his firm improve cycle times.

"It's hard to have lean quality unless you can get cycle time down," says Dicheck, whose company manufactures molecular diagnostic products, such as the eSensor system used to detect cystic fibrosis.

"When I joined Osmetech, for them to route an SOP, for instance, they required anywhere from five to 10 signatures," he says. "As people were reviewing it, they were making changes. They would lose the documents between ... our manufacturing building and R&D headquarters building. It was an absolute nightmare.

"The reason an electronic system is important is it gives you the ability to communicate rapidly across the functional areas in the organization, so reviewing and approving documents is incredibly easy," Dicheck notes. (See p.7 for a discussion about whether lean quality can be used at a paper-based firm.)

Willett also urges companies to keep their quality procedures simple ("The Silver Sheet" August 2008).

Firms need "intuitive procedures, not volumes of documentations and novels," she says. Use "a robust process architecture that results in quick navigation so people are not looking for information. [Don't make] it so complicated that people don't know how to navigate through all of the different processes. That can impact your cycle time, which [in turn] can lead to errors."

Some Parts Of A Firm's Quality SystemCan Be More Fully Trimmed Than Others

If a manufacturer chooses to implement a lean manufacturing philosophy, it will have plenty to choose from.

"First of all, out of the automotive industry, you have TQM - Total Quality Management - that introduced lean principles," Willett says.

"You have Kaizen, which is more on the manufacturing side," she adds. "You have Six Sigma. You have Hoshin Kanri. You have Quality Function Deployment [QFD]. A lot of these have come from the automotive or the aerospace and defense industries, and these are all different types of approaches to lean quality." (For more about these models, see chart: 'Lean' Process Efficiency Models )

Although any of these lean techniques can be extended to quality, Mike Power, life sciences supply chain manager for consulting firm BearingPoint, warns that some parts of the quality system shouldn't be "leaned" as much as others.

"That's the interesting thing about a quality system: It's not something that you would normally [expect] to lean," he says. "There are things that have to be [in the quality system] to manage risk and to manage agility, because a good quality system needs to have those.

"In quality systems there are operations that ... provide little or no value to the end product, but they have to be there for business or compliance reasons," Power notes.

Quality system processes that can be fully leaned include those relating to manufacturing or line clearance, as well as on-line manufacturing inspections.

But firms should tread lightly when leaning other quality processes, Power says.

"The places where your processes need to be more agile are those processes that are governance processes, [such as issues surrounding] product discrepancies and nonconformance, CAPAs [corrective and preventive actions], electronic batch records, and electronic device history records," he says. "Those processes need to have a balance between [what can be leaned] and what needs to be there for compliance and agility.

"CAPA is a good example of that," Power explains. "You pretty much have to come up with a CAPA plan, and then you have to follow the plan, do the root cause analysis, and when you're done you're going to have [certain] results. Well, if I try to lean that, I may not be able to do a very effective root cause analysis, because [the analysis] tends to be all over the place. They also tend to be very data-centric, and they tend to be in some cases subjective."

Lean Quality May Require Company Culture Change

A firm may need to change its culture to ensure that lean quality will be understood and used by employees.

"The key thing in all of this is really overcoming a resistance to change," Pilgrim Software's Willett says. "When we're talking about lean principles - whether it's in manufacturing or in quality - most of the time what we've seen as the challenge is not that people don't understand where they can improve their processes [or] make them more efficient. Rather, it's really the change within the organization."

Therefore, "one of the key things ... is to make sure that you have quality expertise and good project leadership," she says. "The last thing you want is a project that's going to gain so much excitement within the organization, but the results ultimately fail."

Consultant Lovett agrees it's critical to involve people. "One naysayer, one bad apple in the bunch, can spoil a whole bunch more. So really cultivate the culture. People will want to participate more if they feel they're adding value to the process.

"One of the things I did to try and change the culture of the quality folks [at Kyphon and Abbott] was to give them responsibility," she adds. "I partnered them up [with others] so they understood the engineer's job, they understood the production person's job, and they were partnered together to come to a solution. But it was a shift that had to happen over time."

Still, some firms "are stubborn. They have processes that they're comfortable with. They don't want to look at changes," Willett says. "As a result, basically organizations are left [with] the same processes that they've had, and the same difficulties. They're trying to navigate that maze."

Willett reminds firms that lean quality "is an ongoing process. This doesn't stop after [they do] an initial lean project. This is part of your whole new fostering of a culture for business or operational excellence. It's not like you're going to take a look at this approach and say, 'I'm going to get my project leader, I'm going to get my task force, I'm going to do this, and I'm done.' Well, it doesn't end there. You need to take a look at sustainability and a change of lifestyle."

Physio-Control Replaces Five Databases With One

Physio-Control is not only transforming its company culture in response to FDA compliance concerns, but it has changed the way it operates its quality system, as well.

Over the past few years, the Medtronic division received two FDA warning letters and entered into a consent decree with the agency. Nevertheless, the firm is confident it is on the road to recovery, in part because it is using a lean quality approach.

"We have had some regulatory ... issues over the last two years," Bob Sendek, Physio-Control's information technology (IT) manager for manufacturing quality systems, acknowledged during the Sept. 23 AdvaMed conference session.

In a consent decree the company signed with FDA in April, the firm was cited for wide-ranging violations, including deviations in design control, production and process control, CAPA, and complaint handling ("The Silver Sheet" May 2008).

Under the decree, Physio-Control is barred from selling its LifePak automated external defibrillators (AEDs) until certain conditions are met, including hiring an outside expert to certify that corrections are made and documenting steps it has taken to identify the root causes of AED failures that occurred during the two years prior to the decree.

(More recently, Physio-Control conducted a Class I recall on Aug. 28 in relation to 249 LifePak CR Plus AEDs; however, the firm maintains that the recall is unrelated to its broader quality system issues. Due to a software glitch, fully automatic versions of the device were prompting users - through built-in voice commands - to press a "shock button," which is only visible on semi-automatic versions of the AED.)

Although "lean manufacturing has been a part of Physio-Control for a long time, lean quality has only been [used] over the last year and a half" to give the company the extra push it needs to overcome its compliance problems, Sendek says.

After the company received its second warning letter - and before the consent decree was signed - Sendek began implementing lean quality by replacing the company's five "homegrown" databases with one off-the-shelf system that included no customizations.

"Customization tends to keep you in a static position because it makes it much harder to validate, makes it harder to get updates and upgrades in the future. It limits you," he says.

During this time, Physio-Control's VP of quality was closely involved in the database change and helped ensure that customization was not built into the system.

"It has supported the business for more than a year now, and with zero changes," Sendek says of the new database, noting the importance of allowing time for system integration and proper testing.

"Make sure you have the chance to pilot test it," Sendek says. "Once you get it through a small group, push it out to more people and let them play with the system, and then document issues and resolve them in a timely manner. Also allow time for users to adapt to the new processes and technology, and then capture your lessons learned."

However, he advises manufacturers to balance process improvements with technology solutions.

"People love to say, 'IT is going to come in and give us a system that makes everything better for us.' But for the most part, it's process before technology," Sendek says. "That's very important. It's hard to make people understand that. A good IT system will support your process, but it's not going to fix it."

Lean Quality Helps Physio-Control With CAPAs, MDRs

Physio-Control's single database is especially helpful as the firm pursues leanness in its CAPA and complaint handling systems - two areas noted as severely deficient in the consent decree.

Even though the firm used to have "five databases doing different things, the final results were actually paper," Sendek says. "During that process, we had 26 signatures that were required, depending on the CAPA, [which meant] the CAPAs would stay open a long time."

It also was difficult for employees to find paper-based CAPAs because engineers would remove the files to work on them.

Now that Physio-Control has only one database, "everything is in one place. You go to one place, you get it all. Now we only require 10 signatures," Sendek says. "Every signature [that used to be] asked for, I asked, 'Do you really need it? What value is it adding?' And a lot of times [the answer] was, 'It just gives us a warm, fuzzy feeling.' Well, that's not enough."

The firm also can now look in the database to find the entire history of any given CAPA.

"I look at the CAPA as a diary of what you did, and if you can't go to your CAPA system and find out that Engineer A worked on this piece or did this task, then you don't have the whole story, and the big thing is the story," Sendek says.

The new database also contains the current version of the company's CAPA procedure.

Previously, "the CAPA procedure was one of the most revised procedures," Sendek says. "As they went through this, they would have 'Revision A,' and a quarter of the way through they would have 'Revision B,' and then [they would] fill more stuff out, and now they would have 'Revision C' - and it starts growing. So there was some revision confusion going on."

Further, "culture-wise, one of the big things [we changed] was actually having the R&D engineers, the manufacturing engineers and the quality engineers all involved in creating the CAPA process," he says. "It wasn't just quality coming out and saying, 'This is how we should handle CAPA.' It was getting all those different pieces together in one room and mapping out a process. So instead of being dictatorial, it was cooperative."

Physio-Control also was able to apply a lean quality approach to its complaint handling system, thanks to the database change.

"Complaints and MDRs [Medical Device Reports] used to be a paper record," Sendek says. "The data extraction part was one of the real difficulties there. With a homegrown system, there were only two people who really understood it, and if those two people weren't there, or they were overloaded with requests, we would just run into problems."

However, "everybody can extract data now. It's part of the process," he says. "If you want to know how many complaints [there were] for a product for the last month, you don't have to go see so-and-so again. It makes it easier."

Pilgrim Software's Willett says failing to train multiple employees on various quality processes is all too common in industry.

"Sometimes what ends up happening is that a step in the [quality] process will go to somebody and it is only designated to a specific employee," she says. "But what if that employee is on vacation? Then what? Does [the process] stop? So it goes into a black hole."

Willett recommends that manufacturers ask themselves, "Who is the next person who needs to be involved with that [quality process]? Who are the other back-up people who can make sure that the process is going along? How are you going to do the appropriate escalations ... to make sure that things are not going to go into a black hole?"

Meanwhile, Sendek says the changes Physio-Control has made in relation to its lean quality approach have been positively received by outside auditors.

"There have been people who have audited us prior to this implementation and after its implementation, and it's like night and day," Sendek says. "We've had very good success with our audits."

Paper-Based Firms Still Can Use LeanQuality - But It Will Be Much More Difficult

Manufacturers don't necessarily need to use an electronic-based quality system if they want to employ lean quality techniques, but going electronic does make implementation a lot easier.

Plus, a paper-based system "is not going to be totally 100 percent lean," BearingPoint's Power says.

For example, a firm that relies on paper will need "dual signatures on a device history record, and there are places and processes where if I make a mistake, I will have to do a certain procedure, write through on the device record what the new thing was, sign and date it, and [record] a reason for why I'm making a change. All of these take time and effort.

"I can lean that process to where I only capture the appropriate data in a paper batch record that needs to be there to show compliance and device history, but I still have an extra cost because it's paper, which means I have to have somebody else review it, and occasionally I have to have the ability to correct errors that are going to be in it," he adds.

Power also points out that small manufacturers need to consider "quality versus cost versus lean."

Those small firms "may have a demand where they only have to build 50 devices a year," he says. "In that case, why would they spend $800,000 on an electronic system?"

Osmetech's Dicheck agrees that companies that use paper-based systems will find it difficult to organize in a lean fashion.

In fact, he is adamant that "the cornerstone of lean quality in any organization has to be an electronic-based system that is relatively easy to learn how to use, and relatively easy to maintain, and is cost effective."

A paper-based manufacturer "can do lean quality, but they're going to be, quite frankly, very limited," Dicheck told "The Silver Sheet." "You're going to be incapable of extracting out the waste that you would have in accessing and organizing documents, and handling your corrective and preventive actions, and handling your complaint system. The days of paper are gone."

When Dicheck came to Osmetech in 2005, the firm's quality system was paper-based. He quickly determined that he would need an additional six employees simply to manage the paper documents the company generated - and the firm hadn't even released its first product yet.

"That's ludicrous. I would not have gotten approval to do that," he says. "My R&D people would tell you that had we not begun using an electronic system in November 2005 and had it up and running in 2006, they would not have been able to effectively manage the timelines to have a successful commercial launch of our newest products and platform.

"It just would've been a near-impossible task," Dicheck adds. "So the paper-based system would not work for us."

He points out that manufacturers also need to have a "lean mindset" when selecting an electronic system.

"You have to select ... which features you're actually going to turn on and utilize, and you may want something that can grow with you," Dicheck says.

A company may want to say, "'I'm only going to use maybe 25 percent to 40 percent of the system's capability, but for my organization today, I need these particular features now, and I want to validate those to be operationally ready and implement them effectively and quickly,' versus saying, 'I'm going to have the whole thing live' right now," he notes.

The electronic system also makes it easier for Osmetech to conduct management reviews.

"When I came on board it was very, very difficult to get the information I needed ... for a quality system management review," Dicheck says. "It took them literally two weeks to pull together all of the information I requested, but now with the electronic-based system I'm able to do that in a matter of hours.

"The ability to have real-time metrics is extremely important to keep an organization in control and to be able to make decisions with facts versus conjecture," he notes.

Supplier reviews also are easier now thanks to the firm's ability to access its quality system remotely.

"When we had a supplier review of technical specifications, for instance, three of us were onsite at the supplier," Dicheck says. "We made changes with the supplier, and within 15 minutes we ... approved them remotely right there at the supplier location. That would not be possible with a paper-based system. We're able to tackle quality issues faster as it relates to suppliers, as well as other issues."

Osmetech: QC Manager Screens Nonconformance Reports To Make Process More Efficient

One of Osmetech's most significant improvements was reassigning an employee from the operation supply chain to quality control manager.

The quality control manager reviews all noncomformance reports to determine whether they should be elevated to the firm's Material Review Board. MRBs meet periodically to address complaints and open CAPAs relating to product problems.

"Instead of waiting for an MRB meeting, for instance, that person is knowledgeable enough - has the technical background and administrative skills - to do this kind of job and smooth out the workflows," Dicheck says. "So improvement in workflows is where lean quality really shines."

Before the quality control manager was put in place to serve as a filter, the cycle time for MRB review of nonconformance reports was two to four weeks. Now it is less than one week. (See chart: Osmetech's 2008 Cycle Time for Review of Nonconformance Reports )

Taking up to four weeks for nonconformance report reviews "was bad, because that meant we were sitting on a decision, and that meant that inventory was not available to the planner, so they would just re-buy the [nonconforming] materials," Dicheck explains.

"Now, once [the quality control manager] determines that we have a nonconformance and it goes to the MRB, that means those materials are officially unavailable in the inventory management system."

Lean Quality Helps Osmetech With CAPA, Too

Osmetech also would be in "worse shape from a CAPA compliance standpoint" without lean quality techniques, Dicheck says.

"Before lean quality we might take the approach of doing the minimum [number of] quality system effectiveness management reviews, which may have been twice or three times a year," he says.

However, "because we now have live visibility to what's going on with nonconformances, we [can] look at our change orders that are being actively processed," Dicheck explains. "The nonconformances I'm talking about are ones that would require a Material Review Board disposition. Those activities, and the results of internal audits, would perhaps be done more infrequently than under the lean quality process.

"In other words, by applying that [lean quality] tool, I'm able to have regularly scheduled meetings for CAPAs, regularly scheduled meetings for our MRB, with real-time data," he continues. "You can say, 'Gee, I could do that under [a non-lean quality] system.' Well, the answer is yes, but the amount of time you would spend putting that information together ... in a non-lean quality [environment] could be a couple of weeks [rather than] a couple of hours or less."

That also means Osmetech is able to close CAPAs quicker. Via a lean quality approach, the firm was able to easily see in April 2008 that it had a lot of open CAPAs that needed resolving. (See chart: Osmetech's 2008 Corrective And Preventive Action (CAPA) Closure Rates )

"That closure rate [in May and June 2008] is indicating to me that we applied a concerted effort by a team that was driven by someone in my organization to work with the owners of the CAPAs that were open," Dicheck says. "We assigned the right subject matter experts to solve it."

He points out that even if the firm didn't use lean quality or was paper-based, it would have eventually noticed the large number of open CAPAs.

However, "I can close CAPAs on paper, but it may not be an effective closing," Dicheck says. "One of the things you do in lean quality is, you're not just doing short-term solutions for the sake of closing the CAPAs, but you're also picking off your longer-range root cause analyses so the fixes are more permanent."

- Shawn M. Schmitt (sm.schmitt@elsevier.com)

Extending 'Lean' Principles To Quality Systems

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