Compliance and Traceability: Aligning Strategy and Infrastructure

A year-to-year survey shows that pharmaceutical manufacturers are approaching Best-in-Class territory, but will do well to keep their eyes trained on key compliance and traceability enablers.

By Matthew Littlefield, Senior Research Analyst, Aberdeen Group

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Compliance and traceability go hand in hand. Organizations that emphasize compliance and have good track records in this area tend to be those that have established traceability in their manufacturing and regulatory operations. Those companies that emphasize traceability—in particular, that set up information systems and protocols that clearly document the history and performance of their operations—tend to be those that have stellar compliance records.

In November 2007, the Aberdeen Group surveyed and gathered responses from executives at 54 pharmaceutical companies about their efforts in compliance and traceability. A year later, we surveyed the same set of executives, with a slight increase of responses—up to 58 executives. (From the surveys we developed annual reports entitled, “Compliance and Traceability: Insight into Pharmaceutical Manufacturing.”)

We undertook these surveys in order to better understand the practices and technologies that are guiding compliance and traceability efforts within pharmaceutical manufacturing, in order to enhance our own knowledge of best practices for maintaining compliance excellence. These two sets of responses allow us to better understand drug manufacturers’ changing tendencies as well. One immediate conclusion can be drawn: While the pharmaceutical industry still lags behind other industries in terms of key metrics applied to this topic, it is catching up.

Traceability: One Man’s Definition

“Traceability for our company starts with our supplier lot or batch of material and is carried through delivery to our customer. We have applied a QMS based on ISO-9001 with a twist to the pharmaceutical industry. This has GMPs built into the program and is supported by an ERP system. Shop floor data is presented real-time to the management team. A non-conformance control database is used to apply CAPA to process issues and customer complaints. The benefit for us has been effective claim resolution and continuous improvement support.
–Larry A. Shortt, C.Q.M. Manager, Compliance & Regulatory Affairs, Jones Packaging, Inc.

Research from Aberdeen's 2007 report indicated that pharmaceutical manufacturers were behind the Industry Average in the adoption of quality management systems (QMS) and a number of additional Quality modules, and in a number of key performance indicators (KPIs). A year later, it is apparent that the pharmaceutical industry has made significant investments in infrastructure and is subsequently enjoying significantly improved performance.

In the following article, we will analyze the pressures driving these organizations to focus on compliance and traceability, the strategic actions they are taking in response, and the technologies being adopted in support of these strategic actions. We will examine how pharmaceutical manufacturers have closed the gap since last year by continuing to adopt technology in the support of compliance and traceability initiatives and aligning this technology adoption with the strategic actions being taken.

Compliance and the Production Process

Results from both the 2007 and 2008 studies indicate that the tremendous pressure upon pharmaceutical executives regarding compliance has not changed (Figure 1). If anything, this concern has increased slightly in the past year (72% vs. 75%). When compared with counterparts from other industries, pharmaceutical manufacturing executives are almost twice as likely to face this pressure, a difference which affects many other aspects of pharmaceutical manufacturing operations.

It is interesting to note that the top strategy deployed by both the overall population of respondents and those in the pharmaceutical industry has remained the same over the past two years—to build compliance and traceability into manufacturing processes.

The one change that can be seen is that, in 2007, the overall market was more likely to be implementing this strategy, whereas at the end of 2008, the pharmaceutical industry is increasingly likely to be “building in” compliance and traceability to the production process. This no doubt can be partially attributed to the small up-tick in focus on regulatory compliance as the top pressure and the fact that "building in" compliance and traceability aligns well with the FDA's recent emphases on Process Analytical Technology and Quality by Design.

KPI Performance

In 2007, the only metric in which pharmaceutical manufacturers outperformed the Industry Average was in On-time Delivery (see Table 1 for metrics collected). Furthermore, in 2007, pharmaceutical manufacturers were only at par with the Industry Average for Compliance and significantly underperforming the Industry Average in regards to Response Time for Non-conforming Shipments.

Pharmaceutical manufacturers have shown significant improvement in 2008. This is very encouraging; in an industry in which customer safety is critical and the potential costs of non-conforming products high, any approach that underperforms the Industry Average is not sustainable.

When compared to 2007, pharmaceutical manufacturers in 2008 improved performance in every KPI that was measured, including: On-time and Complete Shipments, Products in Compliance, and Response Time to Non-conforming Shipments. In fact, pharmaceutical manufacturers now outperform the Industry Average in Products in compliance and overall equipment effectiveness (OEE).

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