EQMS Coexistence in an Enterprise Environment

Organizations have increased their global presence by entering new markets, outsourcing to global suppliers and contract manufacturers, and through mergers and acquisitions. This offers competitive advantages but also increases risk due to the lack of visibility of quality processes across the value chain.

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EQMS Coexistence in an Enterprise Environment Best Practices to Managing Quality Processes 1 Introduction 3 Quality System Processes 4Benefits of EQMS Implementation 5Resources2 IT System Challenges 33 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Introduction Organizations have increased their global presence by entering new markets, outsourcing to global suppliers and contract manufacturers, and through mergers and acquisitions. This offers competitive advantages but also increases risk due to the lack of visibility of quality processes across the value chain. As a result, industries have seen considerable increases in product recalls, which has increased regulatory attention and requirements. Increases in rework, disposals and scrap attributed to poor quality also increased cost and reduced profitability for companies in an already struggling economy. While companies in the life sciences industry have leveraged Enterprise Quality Management Systems (EQMS) for the last 20 years, 80% of quality managers in consumer products (i.e. food, beverage, personal care, cosmetics, baby products and tobacco) and chemical companies are still managing quality processes using spreadsheet and paper-based systems.* Companies have spent years trying to find ways to use existing enterprise IT systems to manage quality processes, with a big assumption that their ERP system can be extended to handle it. This eBook will highlight trends in both the Enterprise Resource Planning (ERP) and quality management systems, as well as discuss key issues that should be considered by those looking to better manage quality across the enterprise.. *Transforming Quality Management through Automation, Quality Digest. January 23, 2012 43 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction IT System Challenges A number of trends have surfaced to change ERP deployments over recent years. With a history of lessons learned during deployments and an understanding of capabilities and gaps in performance, organizations can now better identify needs going forward. The success of an ERP system deployment depends on the commitment of senior management to adapt to changes in business processes to support “best practices.” Although an ERP is known for standardizing and centralizing business processes, it does not provide the flexibility to easily adapt to an individual organization’s process requirements. There has been a history within organizations of extensively customizing ERP installations to extend their use into more traditional, transactional supply chain uses. A recent survey study found that 25 percent of respondents implemented ERP systems with significant, extreme or complete customizations. * The consequence of making extensive customized changes is the difficulty in upgrading these systems, which can end up requiring a full implementation effort to utilize functionality in a new release of the ERP application. The total cost of ownership becomes extremely high due to the cost of each upgrade which includes the redesign of custom objects and almost a full revalidation of the system. While that seems like a positive for ERP vendors from a license and professional services revenue standpoint, but it actually ends up putting incumbent vendors in a full competitive evaluation process during each upgrade. More frequently, this trend and refocused perspective are driving organizations away from the view that ERP platforms are a “one-size- fits-all” solution. *Panorama Consulting Solutions, 2014 ERP Report. ERP System Deployment 1 Avon’s Failed SAP Implementation Reflects Rise of Usability, The Wall Street Journal, January 24, 2014 2 Identifying Critical Issues in Enterprise Resource Planning (ERP) Implementation Elsevier. May 2005. 53 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction IT System Challenges Impact of Mergers and Acquisitions (M&A) Due to challenges in the economy as well as industry trends, we have seen a significant number of merger and acquisition (M&A) activities. The net effect of these changes has been a high level of redundancy of IT systems within these organizations, resulting in multiple ERP, MES and CRM systems. This leads to an even greater amount of disparate data and lack of visibility within their newly combined organizations. During the M&A process, organizations often make a decision to select the preferred application and “rip and replace” redundant applications in order to consolidate data into one harmonized system. But when it comes to ERP systems, this harmonization is usually performed at a high cost and a substantial disruption to the business. Users are often frustrated with the functionality, and the extensive number of transaction codes they needed to do their job. Alternatively, many companies are taking the approach of leaving multiple preexisting ERP systems alone until a more suitable solution can be achieved. However, that results in siloed data across multiple facilities within the enterprise. Some companies are using SOA-based middleware applications to communicate between different legacy systems, but that still doesn’t provide the visibility needed to ensure compliance and consistency across business processes especially as it relates to managing quality processes. The Real Cost of an ERP Reimplementation? Although costs vary based on the size of the company, a large food manufacturer disclosed that the cost to upgrade their ERP system was expected to cost $70 million, in addition to capital investments. During 2010, the company incurred approximately $9 million in consulting costs associated with their ERP reimplementation.* *Source: Kellogg, 2010 10K Report, page 17. 63 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Quality System Processes Quality Systems Deployment Trends In the mid-to-late 1990s, life science organizations implemented quality management systems (QMS) as a point solution within a facility to meet specific compliance requirements. As operational and cost efficiencies began to be recognized, pharmaceutical and medical device companies rolled out their QMS across all quality processes and global facilities. These systems not only span the broad spectrum of highly interrelated quality systems processes, but also involve the participation of cross-functional groups within the organization. The evolution of these systems has also resulted in expansion well beyond manufacturing quality systems processes, and in many cases these systems are now extensively used by regulatory affairs groups, lab operations, clinical operations and even, increasingly, environmental health and safety staff. In recent years, companies in the food, beverage, personal care, cosmetic, baby products, tobacco and chemical industries are starting to see an increase in regulatory and compliance requirements, and are looking to leverage the best practices from their life sciences counterparts. Standardizing quality processes across all facilities using an EQMS enables organizations to maintain standard operating procedures (SOPs) and compliance requirements effectively. It also enables information to be integrated and shared across existing IT systems so issues can be identified earlier and product can be quarantined in the facility. This reduces the need for costly product recalls that impact brand reputation, recalls costs and consumer health and safety. 73 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Quality System Processes Quality Systems Deployment Trends Certain elements of a quality management system are thought to be logical extensions of an ERP’s functionality. Several ERP platforms offer functions that are positioned as “quality modules,” or add-ons, for managing quality related processes. However, this functionality is typically designed to manage just an isolated process within the overall quality system previously mentioned. During the manufacturing process, there are a variety of deviations that can occur against a particular batch or lot number within the ERP system. However, these systems typically work in a “batch-centric” fashion, where a deviation is associated with a specific batch. So, when the total quality process, such as an incidents, is reviewed, business users can see that upto 90% of the quality process is done manually outside the ERP system. This is different than a typical quality management system, which manages business processes via an “incident-centric” fashion. So, significant customization of an ERP system is normally required to permit a single deviation to be associated with multiple batches or products, unlike a quality management system that is a purpose-built solution. For those that choose not to engage in customization, resource-intensive manual processes susceptible to errors are developed instead. The implementation model for these systems is consistent with the approach taken in a broad range of ERP-related deployments. These are typically large-scale professional services engagements involving significant customization to enable the ERP to conform to the customer-specific product and quality process requirements. Even for a mid-tier company, this isolated component of the overall quality systems landscape can cost several million dollars, easily equaling or exceeding the price of implementation of a complete, best-of-breed quality management system. 83 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Benefits of EQMS Implementation What does an EQMS Provide? As regulations increased and the complexity of multiple systems across the supply chain expands, the idea of automating quality workflow processes becomes more of a necessity rather than a option. These highly interrelated processes within the quality systems area span a number of functional groups, including supplier quality, manufacturing operations, product management, regulatory affairs, multiple auditing groups and even complaint handling. With the focus on increasing a company’s global footprint, an effective supplier quality management program has become even more critical. This discipline includes a holistic, end-to-end process–from a request for a new supplier, through the qualification process and ongoing monitoring through structured, risk-based auditing programs. Nonconformances and product complaints are increasingly cross-referenced to both materials and the suppliers that had provided them, allowing true aggregation of all supplier-related quality information. From a manufacturing perspective, there are a number of different product and operational incidents that must be captured. After the logging of these incidents, a thorough investigation must be conducted, followed by the identification of root cause and the planning and execution of corrective and preventive actions (CAPAs). To allow accurate closure, a disciplined process must be put in place to check the effectiveness of the remediation activities to make sure the issue doesn’t recur in the future. Accelerated  quality   outcomes*  that  result  from   an  EQMS  implementa:on:   Supplier   Improvements     39%  reduc*on  in     supplier  quality   management    .     cycle  *me   CAPAs   51%  reduc*on     in  CAPA  cycle  *me   *2 01 0   su rv ey  o f  S pa rt a   Sy st em s   30  c us to m er s   us in g   Tr ac kW is e    39%    51%    72%   Incidents  &   Nonconformances   72%  reduc*on    in   incident  process   cycle  *me   93 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Benefits of EQMS Implementation What does an EQMS Provide? As the supply chain becomes increasingly global, complete change management processes have received continued attention. Critical to change management processes is the assessment of regulatory impact and the determination of the appropriate updates that must be submitted to the relevant health authorities. This is often a parallel series of activities that are being managed by regulatory affairs staff. A thorough internal audit program spans a number of different areas, including manufacturing, quality assurance, operations, and environmental health and safety. Leading organizations that are looking to clearly prioritize risk within their business are now centralizing all of their auditing activities into their EQMS to ensure that they have a standard and consistent method for assessing risk and prioritizing proactive remediation activities. The EQMS does not end at the manufacturing of the product. It extends post-market to the intake and investigation of consumer product complaints. Issues identified in the field must follow the same regimented investigation, root-cause analysis and CAPA process as the earlier-mentioned pre-market incidents and deviations. Although this provides some details on an EQMS, each individual organization will have scope variations and business-process details unique to both their operations and the products they are manufacturing. As the functionality and benefits of an EQMS are identified, it becomes clear that they go beyond simply tracking a batch process as in a transactional ERP system. Less Risk “Our legacy Quality Systems were disjointed and our data vulnerable. With TrackWise, we were able to reduce risk and streamline processes.” Quality Manager, Hologic 10 3 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Benefits of EQMS Implementation Enterprise Application Integration EQMS solutions are now becoming integrated with other enterprise applications used in manufacturing IT environments. The benefits of this increased level of integration include the reduction of error-prone manual steps and redundant data, leading to an increase in IT and business efficiencies. ERP Integration The most prevalent EQMS integration is the exposure of master data from the ERP. This data typically includes material master information, product information and vendor information to support supplier quality management processes. There are multiple integration strategies from a technology perspective, ranging from more legacy batch processes all the way to real-time web services. • Real-time data push: Product issues are logged and affected lots/batches are identified in real-time, so the EQMS can trigger an alert to the ERP system to quarantine or flag appropriate products. • On-demand data pull: When the data is needed, the ERP system performs an in-bound inquiry into the EQMS requesting to identify any open product issues that should prevent product from being released. • EQMS-managed release: In environments with legacy or limited ERP deployments, the EQMS can manage release criteria and bridge together product-related quality information. With today’s complex IT environments, an EQMS can provide a flexible integration capability that can successfully interconnect many legacy systems while ensuring a consistent, transparent quality management process. In addition, web services and cloud-based capabilities allow multiple integration points to be put in place in a diverse environment at manageable cost and effort. ERP § Product/ material/ vendor information § Batch release § Return/repair processing CRM § Customer master data § Automated complaint initiation MES § Automated initiation of incidents and nonconformances PLM § Engineering change order § Document access EDMS § Integrated change management workow § Access to controlled documentation LIMS § Automated initiation of lab investigations Enterprise Bus Quality Management System 11 3 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction CRM Integration Since product quality complaint handling is a critical component of an EQMS, it becomes important to perform the appropriate integration where Customer Relationship Management (CRM) systems are the point of entry for customer inquiries. In larger organizations, it is common for a CRM to be utilized as the master record for customer information and serve as the point of intake for all customer-related inquiries. Out of the high volume of customer inquiries, only a percentage of those are actually product-quality related. That portion can be automatically initiated within the EQMS via CRM integration to start the product-quality complaint investigation. In addition, that integration can allow visibility of the customer information stored within the CRM, avoiding duplication of data. MES Integration In organizations utilizing manufacturing execution systems (MES), product nonconformities can be identified in real time as a function of shop-floor auto- mation. An element of efficiency will be achieved from the establishment of an automated inbound integration with the EQMS to allow product nonconfor- mities to be automatically initiated, leading to immediate product containment, investigation and corrective activity. LIMS Integration Potential material or product issues can be identified through routine laboratory testing activities. The results from this lab testing are stored within laboratory information management systems (LIMS) and nonconforming results are identified. At the point of identification, a LIMS application can automatically initiate a lab investigation process within the EQMS, transferring the appropriate identifying information. The nonconforming lab result will be investigated through a structured process resulting in a decision on the status of the product nonconformity and if corrective action is needed. Following the conclusion of the investigation, the EQMS will perform an outbound communication to the LIMS so the results are clearly visible to those in the lab. Additionally, comprehensive enterprise applications such as Product Lifecycle Management (PLM) and Document Management systems can be integrated with an EQMS, creating enhanced visibility through out the quality workflows. Benefits of EQMS Implementation What does an EQMS Provide? 12 3 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Conclusion Organizations will achieve the most effective holistic quality system with the fastest time-to-value and time-to-productivity for their investment using an EQMS with the appropriate integration with their other existing enterprise systems. In summary: • Implementing an EQMS helps avoid costly and complex customization of ERP systems and other peripheral applications. • Manufacturing organizations can achieve powerful visibility and traceability with the highest level of efficiency across the broad scope of quality systems processes are with an EQMS, avoiding the pitfalls of when functions are spread across multiple applications and/or across manual processes. • An EQMS can serve as a powerful bridging point for quality management in organizations that have been engaged in mergers and acquisitions, effectively interconnecting diverse and global enterprise application environments. • An EQMS is “incident-centric” and allows the appropriate impact and assessment tracking expected in a GxP and ISO environments. • An EQMS provides a proven solution to managing regulatory and compliance requirements according to FDA, USDA, EU Directives and Asia and Latin America requirements. • Organizations can gain a faster return on investment and lower total cost of ownership will be gained by leveraging purpose-built EQMS solutions rather than customized ERP-based solutions. 13 3 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction Resources To learn more about strategies to implement a successful enterprise quality management solution to address quality across the supply chain, check out these resources: Whitepaper: Quality Management in the Complex Manufacturing Environment eBook: The Five Building Blocks of a CAPA Solution eBook: Four Best Practices to Improve Quality in the Supply Chain 3 QualitySystem Processes 4 Benefits of EQMS Implementation 5 Resources2 IT System Challenges1 Introduction www.spartasystems.com http://blog.spartasystems.com Global Headquarters 2000 Waterview Drive Hamilton, NJ 08691 (609) 807-5100 (888) 261-5948 info@spartasystems.com European Offices Berlin | London | Tel Aviv | Vienna europe-info@spartasystems.com Asia Pacific Offices Singapore apac-info@spartasystems.com Sparta Systems, an industry pioneer and global leading provider of enterprise quality management software (EQMS) solutions, enables businesses to safely and efficiently deliver their products to market. Its TrackWise® EQMS, a trusted standard among highly regulated industries, is used by quality, manufacturing and regulatory affairs professionals to manage compliance, reduce risk and improve safety across the global enterprise. Headquartered in New Jersey and with locations across Europe and Asia, Sparta Systems maintains an extensive install base in the pharmaceutical and biotechnology, medical device, electronics manufacturing and consumer products markets.
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