Quality System Maturity

16 September 2014

W. Garth Conrad
Vice President, Quality
Medtronic, Spinal





Does Compliance
guarantee Quality?
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Mission of Regulatory Agencies
Protect public health by ensuring:

Efficacy - the capacity for beneficial change (or
therapeutic effect) of a given intervention.

Safety a measure of the probability and severity of
an adverse outcome through use of a technology in a
given situation.

Quality conformance to pre-defined specifications,
in order to meet all customers expectations without
resulting in unforeseen inconveniences or
complications.

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Traditional Model for QMS
Translate
M Measure
E Everything
T That
R Results
I In
C Customer
S Satisfaction
Business Management System (BMS)
Key Process Indicators (KPI)
Establish
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Full Product Life-Cycle Risk Monitoring
Pre-
Market
Production
Post-
Market
Monitor KPIs:
New/Changes to processes
Nonconformance rate
Document changes
CAPA
Monitor KPIs:
Clinical data
Complaint rate
Distribution Incident rate
Customer Sentiment
Servicing rate

Monitor KPIs:
Clinical data (prospective)
New/changes to existing product
Therapy complication rate
Competitive complication rate
ISO 14971
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Case for Action - FDA
Source: FDA Medical Device 2012 Quality System Data Analysis of 2012 Inspection Observations and Warning Letter Cites
Source: CDRH Medical Device Recall Report, FY2003 to FY2012
Inspectional Observations
Medical Device Recalls
Efficacy
Safety
Quality
Efficacy
Safety
Quality
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KPI : Compliance to Regulations
Audit Findings
Monitoring and
Continuous Improvement
Cycle time of activities
(Age/Timeliness)
Activities comply with
procedures
Procedures reflect
requirements
Requirements known and
understood
Compliance Risk
Process Execution
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Type of audit finding is an indication of
Quality System Maturity

Consequences of an audit finding are
the same regardless of maturity level of
the quality system

Level of compliance is only valued to
the point where it does not negatively
impact business results
Source: FDA Medical Device 2012 Quality System Data Analysis
of 2012 Inspection Observations and Warning Letter Cites
Significant Enforcement Actions
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Compliance versus Quality
Priorities need to include:
Shift focus from compliance to
quality
Evolve the regulatory oversight
model to promote device quality
Enhance ability to measure quality
and early indicators
Improving education and awareness
within industry

Attempts to improve quality are hindered by
challenges within the industry as well as specific
aspects of the Agency's regulatory approach.
Moving toward greater visibility into device quality
and properly aligning FDAs regulatory approach
will be important to catalyzing industry movement
towards improved device quality.
Source: FDA website
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What is Quality ?
Medical device quality
is the result of ensuring that
features and characteristics of a
product that define its ability to
consistently satisfy customer
needs are realized, and the
products:

are safe, effective, and provide
usability

achieve desired uniformity,
reliability, and performance

satisfy customer and user
requirements and expectations
regarding design, production,
delivery, and service.
Source: MDIC Case For Quality Engagement Model
Source: AdvaMed Working Group Case For Quality
Patient/User: Quality may be defined in terms of efficacy of the
therapy, e.g. does it restore health. It is also defined that use of
the product does not result in any secondary problems (e.g.
infection).

Doctors: Quality may be defined in terms of efficacy. However,
it is also viewed as products that prevent the Doctor from
making a mistake or do not cause unintended harm to the
patient.

Hospital: Quality may be defined as products that do not cause
unintended harm to the patient. It also includes products that
help to reduce the likelihood of secondary issues within the
hospital (e.g. quicker recovery times that reduce the likelihood
of secondary issues).

Payers: Quality may be defined by the cost-based efficacy of
the therapy (e.g. same or better results for less cost).

Regulators: Quality may be defined as products that reduce or
eliminate public health concerns (safety and efficacy) produced
by companies that are compliant with the regulations.
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KPI: Quality of Products
Recalls
Used by customers within
specification
Distributed within specification
Manufactured to specification
Customer Risk
Reliability of Design
Specification established
Design Specification
addresses Design Inputs
Customer Needs &
Use Conditions identified
Efficacy of
therapy/procedure/product
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Medical Device industry quality practices
are not as mature as other industries

Regulatory oversight does not
necessarily change based on Quality
of product

Level of Quality is only valued to the
point where it does not negatively
impact business results
Source: CDRH Medical Device Recall Report, FY2003 to FY2012
Age of Product Recalled
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Maturity Model driving Quality
The Shingo Model
Source: Shingo Institute
Source: Wikipedia - PDCA Process
Deming - PDCA
Medtronic Operating System (MOS)
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University of Memphis
See Carl Williams for more information!
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Benefits to Industry
Industry would benefit from the focus
on Quality by reducing or eliminating
the unplanned costs of Major Quality
Events. According to research
conducted by McKinsey & Company
these unplanned quality events,
sometimes referred to as:

External Failures cost
industry between $2.5 and $5.0
billion per year.

In addition, the industry broadly, and
companies in particular, that have a
Major Quality Event risk damage to
their reputation and brand.
Source: McKinsey Center for Government October 2013
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KPI: Measurements of Quality
Failure Cost
Appraisal Cost - The costs associated with
measuring, evaluating or auditing products or
services to assure Conformance to quality
standards and performance requirements.
Prevention Cost - The costs of all activities
specifically designed to prevent poor quality in
products or services.
Internal Failure Cost - Failure costs
occurring prior to delivery or shipment of the
product, or the furnishing of a service, to the
customer. Examples are the costs of: Scrap,
Rework, Re-inspection, Re-testing, Material
review, Downgrading.
External Failure Cost - Failure costs
occurring after delivery or shipment of the
product and during or after furnishing of a
service to the customer. Examples are the
costs of: customer complaints, Customer returns,
Warranty claims, Product Recalls.
Source: ASQ Cost of Quality (COQ)

Business Risk
Market Sentiment
(impact of inconsistent results)
EBIT
(impact of increased cost)
Revenue
(impact of product availability)
Customer Sentiment
(not meeting expectations)
Employee Morale
(Impacted by complexity/rework)
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Quality System Maturity Impact
Source: International Journal of Quality & Reliability Management, Vol. 24 No.
2, 2007, pp. 121-140
This study identified four relevant findings:

1. As a companys quality system matures,
external failure costs decrease as a percentage
of total Cost of Quality (COQ) concurrent with
increases in internal failure and appraisal costs.

2. As a companys quality system matures, the
proportion of total quality cost spent on
prevention activities increases while the costs of
external failure decrease.

3. Total COQ decreases over time for companies
with quality systems and which track COQ, but
the magnitude of the decrease diminishes the
longer the quality system has been in place.

4. No support was found for increases in sales or
profits associated with the maturity level of the
quality system and whether or not quality costs
were tracked.
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Where are you spending your time?
Balanced Scorecard
Monitoring & Continuous
Improvement
Cycle time of Activities
(Age/Timeliness)
Activities comply with
procedures
Procedures reflect
requirements
Requirements known
and understood
Compliance Risk
Process Execution
Used by customers within
specification
Distributed within
specification
Manufactured to
specification
Customer Risk
Reliability of Design
Specification established
Design Specification
addresses Design Inputs
Customer Needs &
Use Conditions identified
Business Risk
Market Sentiment
(impact of inconsistent results)
EBIT
(impact of increased cost)
Revenue
(impact of product availability)
Customer Sentiment
(not meeting expectations)
Employee Morale
(Impacted by complexity/rework)
Efficacy of
therapy/procedure/product
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Future Industry wide change?
Quality Engagement Forum
1) Regulators, 2) Industry, 3) Healthcare Providers and
Patient Groups, 4) Payer Organizations and 5) Industry
Organizations.

Gather information about current practices, determine if a
quality maturity model could be developed for device
manufacturers, identify the barriers to adoption and create a
list of proposed actions that could promote adoption.
Research
1) Are there maturity models available that are suitable for the Medical Device Industry?
2) Are any Regulators using maturity model to help provide oversight?
3) How are models populated and applied?
4) What are the benefits of use of a Quality System Maturity Model as related to Medical Device
Quality and Patient Safety?
5) What are the barriers to adoption of a Quality System Maturity Model?
6) What changes would need to occur, in both industry and regulators, for the successful
adoption of a Quality System Maturity Model?
7) How would you measure successful implementation of a change of this nature?

For more information visit: http://mdic.org/
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Summary
Compliance to regulations alone does not guarantee
Quality of product.

Measuring the Maturity of your Quality System can
help to identify weaknesses in your Process Controls
Where is your focus Quality or Compliance?