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Supply Chain Quality Panel, Part I: OEM and Supplier Perspectives

Supply chain quality impacts every device company and supplier partner, involving personnel in R&D, purchasing, quality and sourcing.

OEMs and their suppliers play roles in engaging individuals within their own companies to ensure that product quality, integrity and patient safety remain areas of focus throughout the entire manufacturing process.

At OMTEC® 2018, a panel comprising two OEM and two supplier experts, moderated by an industry consultant, discussed the crucial aspects of supply chain quality. We learned much from the discussion and thought you would, too.  

In Part I of this recap, we present the panelists’ comments on OEM/supplier relationships and partnerships, challenges posed by quality agreements and regulatory oversight and continuous improvement efforts. In Part II, we present the panelists’ comments on European Union Medical Device Regulation, third-party audits and the need for more consistency in validations across industry.  

Finch200x200   Coberly 200x200   Ditty 200x200   Levy 200x200   Shankle 200x200

Moderator,
David Finch
Founder and Principal, Insight Collaboration Partners

 

Greg Coberly 
Global Quality Director,
Autocam Medical

 

Bill Ditty
Vice President, Quality Assurance, Compliance and Legal, Orchid Orthopedic Solutions

 

Howard Levy
Vice President, Global Sourcing, Instruments & Trauma Supply Chains,
Zimmer Biomet

 

Scott Shankle
Vice President, Operations, MicroPort Orthopedics

David Finch: What are some of the traits that define the highest-quality customers vs. the difficult customers?

Greg Coberly: Some of our best customers are the ones who really understand manufacturing. We have some that are very good at procurement or quality systems, but they don’t necessarily understand what we do. What differentiates between best and not best is their understanding of our process, so that we have a better relationship in terms of understanding how we launch a product, how we control our processes and how we change control. Some of our more difficult customers seem to be inconsistent with the systems they have in place, sometimes even within their own organizations, in approach. This makes it difficult for us to know what we have to do to achieve acceptance of products or changes.  

Howard Levy: With the supply base, you can never take quality and compliance for granted. You can’t just say quality is a given. There’s an intimacy and relationship level that is critical to [create a] positive relationship. With that comes an understanding of what we need to do when working with us on new product introductions or on some of the transfer processes. The suppliers that really stand out are the ones who recognize [the need] for positive, professional, painful persistence. We really appreciate the suppliers who can partner with us…on a better way to do business; a two-way communication.

Bill Ditty: Certainly, the best customers are leading with quality first. But it’s not a given. I don’t think it would surprise anyone to know that we still have customers who are driving price first. When I’m reviewing agreements, though it is rare, we still get customers who say, “We just want the good data. Don’t give us the other stuff.” That creates problems down the line.

   


Further Reading:
Top Tools to Qualify Suppliers

When an OEM specifies weak second-tier suppliers, its first-tier suppliers have fewer resources to devote to its own processes. One weak link can prevent the best outcome from occurring. This six-step program helps OEMs ensure they’re recommending top suppliers throughout the chain.

 
       

Scott Shankle: We like to think about the Kano model, with satisfiers and delighters. Quality and compliance come first. What we measure every day and talk to suppliers about includes quality, cost, delivery and lead time—these are all satisfiers. You’ve got to perform in those to survive and remain an active supplier for any of the OEMs. What are the delighters? To me, it’s one simple word: trust, which encompasses the people making real partnerships and the people we know we can rely on to consistently perform in those satisfier metrics. Also, who are the people who will be there for us when things don’t go right? Because we know that they always don’t. Who’s going to be able to respond and act like an extension of our organization, or a shareholder? We get one chance with new customers, existing customers and with each patient. Without having suppliers around you that you can trust, you are going to drop the ball.

Finch: Many companies put in continuous improvement efforts to address quality and cost. Some of these changes require Supplier Change Notifications. In many cases, especially for purchased products, that approval may require the support of multiple departments across both the OEM and supplier, which have competing priorities. What recommendations would you make to get companies to work together more, both on the feasibility and implementation phases of these continuous improvement efforts?

Levy: I think you need to go to fewer suppliers. You’re not going to be able to rationalize it, unless you get a lot of help from EU MDR, or a company saying we don’t need these particular SKUs or products. You see this evolution to larger suppliers; your supplier quality group needs to change how they do their business and act as project managers of these large suppliers, as opposed to doing the individual assessment. It’s a different strategic level of supplier quality that’s needed so we can allow the supply base to be more successful and bring forward better practices, better processes, protect risk management, etc. It’s a different world than it was 10 or 20 years ago. The industry needs to move toward more agility. If someone is moving a machine five feet, why does it take two years to get that reviewed, vs. a change of raw materials that R&D needs to test out? That intelligent differentiation is key.

Coberly: If we have a small change, like moving a machine, how can I quickly get an approval without a six-month prior notice, which is what most of the supplier quality agreements coming in these days say? We can’t operate that way. So, if we want to be fast, agile and responsive, we have to have a better, streamlined method to get changes approved. It’s a big thing for us to work on as partners. Right now, we’re being driven every day to reduce cost…actually, reducing cost while at the same time improving patient outcomes. It can be done, but it’s not an easy lift. One of the biggest hurdles is FDA. Part of the problem is that we’ve got so much regulatory oversight on this issue that we get tangled up and can’t get out of our own way to make progress. We recently had an FDA audit with an auditor who didn’t know what a CNC machine was.

Shankle: It’s easy to talk about the regulatory requirements and how burdensome change control can be. I think we also need to keep some perspective that those regulations are there for a reason. Patient safety always comes first. Manufacturing changes are one of the largest causes of device recalls and it’s up to us to be as efficient as possible. I don’t think we as an industry can say, “The regulators are the reason we can’t get things done.” Our history of improperly managing changes is part of the reason the regulators are focusing on that, right? I know it’s an exaggeration, but if there is a change request that’s taking five years to move a machine, that’s not on FDA, that’s on the people that have that change control. A way to prioritize suggested changes is [to determine the] value, impact and difficulty of the change. Clearly, if it’s going to require design testing or regulatory submissions, it’s going to be more difficult. There are a lot of changes that aren’t going to require those. We have to do simple business management and not let those changes get hung up in the queue.  

Ditty: I’d ask OEMs [to involve] us more and more in the feasibility stage. We’re the experts in forging, casting and machining. We can help you with design-for-manufacturability or other value creation that you want to do at that particular point.  

Finch: Superior supply chain quality really requires a true relationship between the OEM and suppliers. What have you done, perhaps as an organization, that’s led to [successful relationships]?

Levy: You can’t have deep, strategic, collaborative relationships with thousands of suppliers. You need to have some sort of process that says these suppliers are the ones that are going to be our strategic partners, and these are the ones that are more traditional in the relationship, and sort it in that regard. For the suppliers where you do have more of the strategic relationship, invest in the resources to take that relationship to the next level—communication, quarterly business reviews and making sure people go on site. Time, communication and prioritization are key.

Ditty: Build a diverse team. Some of us came out of automotive where it was natural to have quality, manufacturing, purchasing and ad-hoc members as part of a collaboration team working with the vendor. When working with a customer, you’ve got to engage the right people and have the right talent. Actually talk to your employees, who are the problem-solvers themselves.  

Shankle: Your organization should have strategic objectives, which should turn into functional objectives. There should only be a few, as you can’t have 100 people working on 100 different things. You’ve got to identify the vital few initiatives and objectives to pursue. Once you do that, assign the team, empower them and then share the goals, which should be measurable and aligned back to the objectives and strategy of the company.  

Coberly: We have value streams that are aligned by customer or product. By having those, we identify who we need to be in contact with at the development stage so we can have those design-for-manufacturing conversations. That same group can then carry it forward if we have a quality issue or an improvement objective to work on with a customer. Our sales group does a good job of having a single, point of  contact who basically helped developed those relationship; they are good at finding out who those sub-teams are within those organizations so that we can match them up and make progress together.  



Rob Meyer is ORTHOWORLD’s Senior Editor. He can be reached by
email.

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