QMS vs. ERP: Use “The Overlap” to Your Advantage

Nov. 7, 2012
Don’t mistake the Quality Management module of your ERP for a quality management solution. Each has its distinct advantages

The life science industry requires robust quality systems to ensure product and regulatory compliance across all related functions. The FDA guidance for an effective quality management system for a pharmaceutical manufacturer, the ICH Q10 model, is based on ISO quality concepts, including GMP regulations and ICH Q8 (Pharmaceutical Development) and ICH Q9 (Quality Risk Management). The FDA guidance suggests that the quality system should enhance the following elements at all levels of the product lifecycle:
• Process performance and product quality monitoring system
• Corrective Action and Preventative Action (CAPA) system
• Change management system
• Management review of process performance and product quality
This is the minimum list of quality system elements for any pharmaceutical manufacturer. Therefore, an organization must select a quality system with applications to meet these functionalities as well as any other requirements specific to their product lifecycles. In addition, pharmaceutical companies need to implement a quality system that will align with their business practices, processes and products.

However, companies are often uncertain about whether to implement a quality management system (QMS) or the quality management modules (QM) of their existing enterprise resource planning (ERP/QM) system. Furthermore, since these systems generally have overlapping functionality, for those companies that have already implemented both systems, there may be debates about which system best addresses a given functional requirement.

The Difference
Although both QMS and ERP/QM address various elements of quality and compliance, they come from different market directions and offer overlapping but different functionalities. In general, QMS focuses on automating quality processes across the enterprise (not just the quality department), while ERP/QM are more focused on quality transactions and data within supply chain and manufacturing processes. Let’s look at each of these systems in more detail.

QMS for the pharmaceutical industry is designed to automate, centralize and consolidate incident tracking, workflow management and regulatory reporting for all quality processes and practices. This software focuses on providing automated quality functionalities across the enterprise to areas from research and development to regulatory, manufacturing, IT and facilities. Quality assurance, regulatory affairs and clinical operations are specific functions that need to adhere to stringent quality and compliance standards. For quality assurance, QMS enables a company to centralize and integrate key quality processes, such as:

• Management and reporting of deviations
• Complaint handling
• Supplier quality, internal/external audits
• Change control
• GxP training management,
• Preventative maintenance and calibration

For regulatory affairs, the software captures, manages and tracks all correspondences, product registrations, electronic signatures, submissions and commitments to all healthcare authorities. QMS is typically interfaced with other internal systems, such as ERP, to enable accurate and efficient data flow across business processes.

ERP is a mature product with universal adoption in the pharmaceutical industry. As ERP product “footprints” have grown, hundreds of system modules have been added to offer specialized functionality. ERP/QM, the suite of quality modules offered by leading ERP suppliers are generally designed to automate the quality processes of the supply chain and manufacturing functions. Typical ERP/QM capabilities are:

• Quality planning
• Supplier management
• Inspections
• Quality control
• Quality assurance
• Notifications
• Quality transactions throughout

In addition, batch record information, which is integral to both the manufacturing process and quality management, is typically recorded in the ERP system.

Fundamentally, QMS are designed to automate quality functions throughout the company, and are oriented around the recording, management and resolution of incidents. Fundamentally, ERP/QMs are designed to automate the quality activities within the supply chain and manufacturing, and are oriented around product and process data. These are important factors as they reflect the necessary priorities of the quality and manufacturing functions respectively.

Overlapping Capabilities
Even though QMS and ERP/QM have different focus and orientation, there are a number of overlapping capabilities from each of these systems (See Figure 1 above). The overlap in capabilities is primarily in supply chain quality transactions and may include:

• Supplier management
• Supplier audit
• Quality control
• Inspections
• Notifications
• Batch records
• Analysis and reporting
• Calibration and maintenance

These overlapping capabilities that have emerged within these two quality systems have created some confusion in the marketplace among some of the functions within life science companies. This is because similar terms used for various capabilities within the two systems actually represent capabilities with somewhat different functionalities. For example, both systems show capabilities of quality control. However, the capabilities behind the term quality control for ERP/QM represent functions like SPC/control chart analysis and supplier qualification and evaluation. Quality control under this system is focused on the processes and transactions around procurement, production, final inspection and storage of product. Quality control for QMS represents broader capabilities that may relate to not only the product lifecycle, but also the enterprise, such as management and reporting of deviations, complaint handling, internal/external audits, change control and CAPA.

Confusion may arise in choosing between the overlapping capabilities of ERP/QM and QMS. As virtually all pharmaceutical companies implement both, the choice is not either/or, i.e., which one to license and implement. Given that both systems are typically available, the choice is about which particular feature set offers the best solution to the company’s needs, and how to integrate to the other systems to achieve appropriate transactional and data flow throughout the business processes.

Working Through the Confusion
The key to working through this confusion is to very clearly and objectively understand the requirements of the business and all the functional groups involved. The capabilities of the various systems must be evaluated in the context of the requirements of the business. It’s what the business actually needs that matters, not the preferences or prior experiences of individuals. It’s very important to work out and write down the requirements of all the functional groups involved in the business process, and have them explicitly agree that this document accurately and comprehensively describes their needs.

The true capabilities of both quality systems can then be thoroughly evaluated through research and vendor demonstrations. Through this procedure, it may become evident that some capabilities are superior or equivalent for each system in relation to the company’s quality needs. This process will then help determine the exact capabilities of each system that will better meet the business requirements.

With agreed requirements and a clear understanding of the capabilities of each system, companies can weigh the pros and cons of various approaches. At this stage, it is critically important that all the individuals involved strive to be objective and reach consensus across all functional groups. They must “embrace the overlap.”

Embracing the overlap in capabilities and interfacing the systems for total quality and compliance across the enterprise, will enable the company to achieve success, ensuring that all quality needs are being met in the most effective and efficient manner. This in turn will benefit the company through improved quality, cost-effectiveness, inspection readiness and streamlined decision making throughout the enterprise and product lifecycle.
About the Authors
John Lyons, vice president & general manager, Solutions Practice:
As the leader of Maxiom Group’s Solutions Consulting Practice, John directs a staff of business and IT consulting professionals that help life science clients plan, design and implement IT solutions. He received a BS in Accounting and Finance from Boston College.

Sarah Bourgeois, Senior Consultant, Solutions Practice, is a member of Maxiom Group’s Life Science consulting practice. Her primary focus is in the Commercial Launch Services area of the business where she conducts cross-functional commercial launch planning to prepare a Life Science company to transition from a research organization into a commercial entity. She has an MBA from Babson College and a BS in Biology from University of Massachusetts Amherst.

About the Author

John Lyons and Sarah Bourgeois | Maxiom Group