Originally Published IVD Technology June 2005
In Person
Improving manufacturing efficiency
Standardizing manufacturing processes can help IVD companies adapt to new regulations and technologies more easily.
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| Stephen Wasserman is group vice president, diagnostic systems, at Olympus America Inc. (Melville, NY). He can be reached here. |
While the rapid pace of technological innovation has fueled impressive breakthroughs in diagnostics, it has also presented a frustrating challenge to IVD companies. Not only must they ensure that current instrument systems can meet evolving user demands, but also that manufacturing processes can incorporate such changes cost-effectively. And when the rigors of regulatory and international standards are considered, maintaining manufacturing consistency can seem an especially daunting task.
To find out what diagnostic companies are doing to cope with a changing marketplace, IVD Technology editor Richard Park spoke with Stephen Wasserman, group vice president, diagnostic systems, at Olympus America Inc. (Melville, NY). In this interview, Wasserman discusses how instituting internal standards can help companies keep manufacturing operations consistent. He also talks about the need for collaboration between scientists and engineers, and how diagnostic companies have responded to FDA regulations and the IVD Directive.
IVD Technology: In terms of sheer technical complexity, what are the most troublesome areas involved in manufacturing IVD products today?
Stephen Wasserman: The most difficult area of IVD manufacturing is in the integration of the different disciplines of reagents, instruments, software, and the application of these to create an efficient and reliable system for the customer.
How can a diagnostic company like Olympus work to create this type of integration?
We’ve been manufacturing systems for a long time and have developed concurrent engineering processes that are critical to their success. We have gotten very good at creating cross-functional teams and having those teams work together. During the last 35 years, we have created development and manufacturing processes that are reliable and that rely on communication between different functional areas to achieve a product launch in the planned time frame. Once you have a system, you can use it to transition from one platform to the next. So the process becomes institutionalized within your organization.
How do IVD companies adapt to such changes in technologies as well as to changes in the structure of the market?
You can look at this in a number of different ways. Certainly, software has made a dramatic change in instrument technology. The capabilities of an instrument developed today compared to in the 1970s or 1980s are far greater because of software—what you are able to program and how easy it is to program, but also how you can provide new product instruction to the organization.
As we identify a technology that might be better used, we acquire it, make sure we can train people on it, and then implement it where we think it is best suited within the platform. Like other companies, we want to come out with a new platform on a periodic basis. If the evolution is minor, we may install a new technology on an existing system, or upgrade the system, or we may simply save it for the next generation. A company cannot afford to make changes to analyzers on a frequent basis except to upgrade software.
What sort of challenges does ensuring lot-to-lot consistency present to IVD companies in their manufacturing processes?
The IVD Directive requires you to formalize your processes to develop and manufacture clinical chemistry reagents to be consistent with reference methods and materials. Previously, each manufacturer was able to produce and test products in accordance with internal systems and consistent with prior lots, but now we also have to have traceability to reference methods and materials. This has reduced the differences between manufacturers’ products and has made it somewhat easier for customers to change chemistry system suppliers, which has been a benefit to Olympus as we gain market share.
Lot-to-lot consistency becomes problematic if you have to switch raw materials and have not qualified alternative vendors. We have backup suppliers and make sure that the incoming material is appropriately categorized and characterized, so this is appropriately managed.
What role do in-house audits play in their manufacturing processes of IVD companies?
Not only does the manufacturing entity have the responsibility to conduct audits of itself, but also of sister companies. Bringing in customer-focused auditors to look at not only the processes but the way the standards are set is a wonderful opportunity for a company to keep improving its product line to make sure it meets and exceeds customer expectations.
Meeting Regulatory Challenges
The IVD Directive presents a number of requirements, but two seem to have particular relevance to manufacturing processes: those for traceable calibrators and reference materials. How do these rules affect IVD companies?
There have been significant increased costs to meet these requirements because we must do more testing on raw materials and finished kits. It has made barriers to entry and to stay in the field higher, drawing some of the independent suppliers from the market. Reference materials are defined and controlled by the international bodies (IFCC, AACC, etc.) and they make the materials available to the manufacturer. We have become more active with these bodies to assist in standards setting. There are also reference labs that supply the standards, and we rely on them for the product.
Regulatory requirements and international standards are intended to keep companies from designing or producing bad products. Although some companies argue that such requirements often create unnecessary burden, in what ways might they help to make technically complex processes simpler for IVD manufacturers?
Everything is written down: all steps and all materials that are added are characterized and properly identified. If key ingredients can be properly managed, then a consistency can be maintained and manufacturers can have a good idea of what a base material is going to look like. The only variability, then, becomes the manufacturing process itself. The processes are more complex to maintain compliance with the new standards.
How do you go about coordinating internal and external processes, procedures, and requirements to ensure standardization?
We create detailed project plans when implementing new processes or technologies. We look at new products targeted for production and the new technology introduced, whether it be for packaging material or filling equipment. Each has to be appropriately validated. We make sure that there is a written development plan for each step of the process. Sometimes we use outside consultants, but most of the time we use our own people. All of our plants have people with validation and implementation experience.
Are regulatory requirements and international standards equally useful on the development side, when dealing with new cutting-edge products such as new generations of molecular diagnostics?
We are developing platforms for the research market, but these do not have to meet the same criteria as those for the clinical arena. In most of the new areas there are no international standards, so they are not applicable.
On the development side, we look at how to ensure that new technologies meet directive requirements when integrated into a system. This is where it becomes helpful to have a standards body that can say, “This is what is acceptable in terms of reliability, accuracy, and precision.” It gives you benchmarking criteria for new technologies.
Our internal criteria are more stringent than required by the regulatory agencies. Therefore, international standards have become the baseline from which we set appropriate levels for reliability and performance for our analyzers and reagents. In some tumor markers and other immunoassay tests there are no international standards, and in the case of hemoglobin A1c, U.S. and international standards are different.
Since the IVD Directive became effective in December 2003, what areas has Olympus, as a global company, found most difficult to deal with?
I think what has been most difficult is making sure all the appropriate languages are on packaging. One thing we have been trying to do for a long time is to use only symbols. FDA supported this. The requirement in Europe that basically every language has to be on a printout describing a product’s ingredients and preparation can tie up a lot of resources.
We have addressed this issue in several ways. On the instrument side, we do not include every language that we sell to on the software. Instead, we have the languages from most of the areas that we have high penetration in. On the reagent side, we have looked at several options, including packaging CDs with the reagents, and enclosing typeset inserts folded so that everybody can get to the right language.
Has Olympus been able to streamline its compliance activities for FDA and the IVD Directive to eliminate redundancies, or are there areas where independent efforts are still required?
For the most part, our systems have been designed to meet both the IVD Directive as well as FDA requirements. I am sure there are some specific areas where there may be overlap, but our plants manufacture both for countries that are governed by the IVD Directive and countries governed by FDA. We manufacture for both in the same plant without undo expense and extra people. So I do not think it has created a heavy burden for us, because we planned appropriately.
Collaboration and Efficiency
You mentioned earlier that the chemistry and instrument sides of IVD manufacturing can be categorized as distinct disciplines. How do the challenges in these two areas differ?
The instrument side, in some respects, can be more challenging because you are always trying to deal with the latest generation of computers and come out with the latest generation of software. We maintain everybody in the field population using the same operating systems. Otherwise, it can become difficult to troubleshoot and provide good customer service.
Also, five or six years after manufacturing an instrument, a company may discover that some of the motors or other components have been upgraded and have different performance specifications than what you had initially designed. This is one of the things that keep manufacturers in a development cycle and one of the reasons why a company is always looking to develop a new generation of products.
On the reagent side, it is important to keep pace with what is happening with raw-material suppliers. The challenge is to make sure that they do not change their process without notifying you far enough in advance, so that you can validate any particular process change. Also, as new pharmaceuticals emerge and new reagents are introduced, you have to make sure that there is no cross-reactivity.
How does an IVD company go about monitoring the activities of suppliers?
In several ways, but most importantly, by requiring it through contract. Another way to monitor activities is through supplier audits and inspections. Also, you must maintain a good relationship with the supplier, and count on the supplier-vendor relationship or supplier-customer relationship to be a good one.
To what extent, then, do engineers and scientists work together to develop proper manufacturing processes for these instruments?
You have to have development teams on both sides that meet consistently in order to benefit from concurrent engineering processes. Certainly, in the case of developing an immunoassay system, you have to know what your base technology is going to be. But really the questions that encourage this interaction are those regarding basic product specifications: How much reagent will the product use? How quick is the processing time? How long does it take to go from the beginning to the end cycle? What is the reagent container going to look like? Are you going to deal with disposable cuvettes or fixed cuvettes?
Some of these decisions take place all throughout the process setting. Therefore, this melding of development talent takes place at the process-setting side, with the specification setting. As both products are developed normally, the hardware typically gets started first because developers need a platform to continue to test reagents.
What about the role of management in overseeing the development process? How does management ensure a product will be viable for the market?
Marketing helps to determine what product features are needed in the marketplace. Where management comes in is in making sure that by the time we complete a product, we can see that it will be better than anything else on the market—that it has a competitive edge and will help us gain market share. Management tests this concept by going to customers or consultants to find out what they think. It comes down to asking good questions and probing until you feel you have the right answers. Then, once you have a good project plan in place, you can hold people accountable for achieving targets.
You noted that product development must incorporate innovations in computing, software, and operating systems. I imagine this also presents a challenge to manufacturing processes. How does a company maintain a balance between the introduction of new technologies on both the product side as well as the process side?
It takes two to three years to pull together a new product. If you look at some of the products that are being sold today, they may be repackaged but their basic framework can easily be more than 10 years old. So, if you have designed a product right, you can incorporate changes into it.
We have the goal of releasing product platforms that will last six or seven years. But halfway through this period, we look to perform a major upgrade. If we need to change something to improve reliability, we will do so whenever it is necessary, but as much as possible, we like to make major changes, such as adding a new software platform, all at once.
The development process really does not change too often. That said, if we come up with a new efficiency level to improve overall manufacturing costs, we will go ahead and integrate it. For example, higher volume might call for greater automation. At a certain point it becomes economical, and a company is always matching off increased efficiency against a return on investment. But the two really do not interfere with one another. One is being done by the manufacturing engineers and the other is done by R&D.
It’s a constantly evolving process, then? Manufacturing engineers are always looking for ways to improve efficiency and are assessing potential changes in light of the state of the market and company?
Yes, that is a pretty consistent way to look at it. Also, the manufacturing engineers work with our service engineers and quality people. If we identify a particular part that is failing more frequently than we would like, we actively go after it with a team. We are always looking to maintain manufacturing efficiency, but also the operating efficiency of the analyzers when they are out in the field. We collect global information on service-part usage to stay on top of that.
How else does a company’s organizational structure make the manufacturing of an IVD product line easier or more complicated?
To the extent that a company has the appropriate product development processes in place and knows how it is going to develop a product, it can bring manufacturing and R&D people into the development team as necessary, and hopefully very early on. The same is true with the service engineers. That structure reports to the highest level in order to make sure the R&D staff and the development and marketing staffs are focusing on products that offer a good return for the company. Top management works to set that direction, to make sure everybody understands what the best potential product lines are. At Olympus, we like to have an independent project manager who reports directly to top management to ensure independent reporting. I think that makes a big difference in terms of how timely our product releases are.
Outsourcing
Up to this point, we have been talking mostly about manufacturing processes that are done in-house. Does Olympus outsource any of its product development or manufacturing activities?
The only thing we outsource to a limited degree is writing software code, but this is totally to our specifications and under our control. Also, if we do not have the expertise, or if somebody else has developed a product we can license, we would much rather do that than develop everything ourselves. This has been the case with certain reagents.
We look to broaden our product line and provide the breadth of products our customers look for through internal development as well as outside sourcing. Right now, we are developing our AU3000i system for immunoassay testing. That is all being done internally, with staff onboard from Japan, France, Germany, and Ireland. We do use multinational development teams.
What is the business rationale for the company’s decision to keep most things in-house?
We have a history of development. Olympus started out in the optical business making microscopes, and from microscopes we went to cameras and endoscopes, and then into
diagnostic equipment. So, we have a base of expertise here that allows us to continue to manufacture our products. We also feel we are more customer focused this way. However, we have outsourced development of the Tango, a new blood-bank automation product that is being introduced this summer, because we did not have the resources but identified it as a market opportunity.
With facilities spread around the world, what sort of challenges do you encounter in getting manufacturing processes streamlined?
More of the challenges take place during the specification development process. Europe and the United States are closer together in their requirements for reagent performance than Japan, but there may be different priorities. You must evaluate whether you can make a product that meets multiple market requirements, or separate products for different markets. This is where it affects manufacturing and where your product people have to know the expectations of their markets. We may use consultants to evaluate that. You meet with your advisory boards and go out to customers and get their input. I thinkthe idea of somebody in-house trying to decide everything or make onedecision that suits every area of the world is just not possible today.
Through its manufacturing processes, how is Olympus preparing for markets during the next five to ten years?
Since September 2004, we have doubled the size of our reagent manufacturing plant in Ireland, and we just announced that we bought land in Japan to build a new factory for
our instruments, which will increase our manufacturing capability by about 75 to 100%. Also, we have expanded another manufacturing facility in Germany for lab automation.
With each of those areas, we have still been able to maintain the quality expected of our products. What
we have done is monitored our
production very carefully. We added additional people and put in place
the appropriate steps to enhance the reliability and the consistency of the manufactured product.
We have goals for reliability, as
well as for product specifications.
Our manufacturing people get to
visit customers and see how their products are used; they take it very personally if their mean time between failures does not meet our expectations. From a manufacturing perspective, that’s great.
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