Medical Device Link.

Originally Published MEM Spring 2002

COLLABORATIVE MANAGEMENT

A system that coordinates the execution of change throughout the supply chain in real time gives a manufacturer a competitive edge.

Michael Carroll

Medical manufacturers and other FDA-regulated organizations with international reach can find coordinating business processes on a global basis distressingly complex, time-consuming, and costly. Challenges are rife and gross inefficiencies turn up everywhere. The imperative to comply with multifarious regulations makes coordination even more important, especially as the popularity of outsourcing such functions as document management, manufacturing, and information technology services increases. In the highly competitive and regulated environment of medical device manufacturing, one of the most consequential areas of challenge today is change management—the process of coordinating product changes internally and externally.

The management of product and process changes is especially important in a private trading exchange. Poor change management across an organization, an exchange, or a group of partners can lead to the manufacture of unusable products, revenue below expectations, greater manufacturing costs, and dissatisfaction among partners and customers. To maintain competitiveness in today's global economy, medical manufacturers must implement changes and must manage them well. Coordinated execution is key.

Change information cannot be merely accessible. The change process must be automated through every stage of the product life cycle, from development of concept and new product introduction, through the ramp phase and volume production, to maintenance of the in-service device until the end of its life. A good way to automate change is through electronic change management (e-CM), a system that intelligently drives the enterprisewide change process via the Internet. A state-of-the art e-CM solution provides a very high level of automation by exploiting a powerful task-flow engine to expedite change requests, track approvals, and, importantly, ensure the implementation of changes down on the factory floor. A successful solution is one that can integrate all of the processes of manufacturing change and implement them faster and more economically than other e-CM systems.

The Present State of Change Management

The Gartner Group (Stamford, CT), a research firm, reports that 88% of high-technology companies are still making changes with manual paper-based systems. Such systems are often slow, expensive, and cumbersome, especially for global medical manufacturers with widely dispersed factories, employees, and supply-chain partners. Even when they use reputedly sophisticated ad hoc electronic systems and costly collaborative-solution platforms, most manufacturers still spend considerable time and resources on meetings, transportation, couriers, overnight services, faxing, printing, and other document-handling services before they see a change approved that could be mission critical.

Many of these systems use e-mail or messaging technology, which merely sends important information to a hub or a server, where it waits until someone retrieves it. To make matters worse, such electronic systems are error-prone, yet expensive to develop. They commonly run alongside manual systems because users feel that they cannot rely totally on their company's experiment in automation.

A recent study by Ernst & Young (New York, NY) and the National Association of Manufacturers (Washington, DC) found that less than one in four U.S. manufacturers uses electronic technology. Only 8.6% of companies connect electronically with major suppliers. About 11% connect the plant floor to the Internet, and only 23% of manufacturing companies share product-design specifications with suppliers.

Therein lies a problem. The worldwide connectivity made possible by the Internet is rewriting the rules for product manufacturers. It is, in fact, revolutionizing the way businesses expect to both make and sell products.

"Ease of use" is a term being applied not only to technology but also to business relationships. Old business models that are based solely on process or operational efficiency simply cannot deliver the results needed to compete in a world where the most successful companies leverage the speed and power of the Internet for instant communication and global collaboration.

Medical device manufacturers need a new business model based on competitive efficiency enabled by Web-centered communication, one that allows the well-organized company to move faster than the competition in an economy in which time seems truly to be money. Recognizing this, world-class medical manufacturing companies are beginning to adopt digital (i.e., intelligent) e-business systems as part of their core competency in order to advance their competitive position.

Collaborative Product Commerce

The "next big thing" in global medical manufacturing will be the ability to collapse barriers of time and distance in new-product introduction, market forecasting, planning, and materials delivery. Streamlining these phases of the product life cycle is central to competitiveness in the new economy. Analysts believe this advancement will be made possible by collaborative product commerce (CPC).

The Aberdeen Group defines CPC as "a class of software and services that uses Internet technology to permit individuals, no matter what role they have in the commercialization of a product, no matter what computer-based tools they use, no matter where they are located geographically, or within the supply net, to collaboratively share intellectual data, improving the development, manufacture, and management of products throughout the entire life cycle."¹ CPC solutions are expected to achieve the long-cherished goal of both connecting disparate databases and allowing them to interact. CPC likely heralds the end of the old business model featuring the use of manual and ad hoc electronic change-management systems. Companies that continue to rely on the outdated methods will find themselves at risk competitively.

The growing interest in CPC underscores a more pervasive trend in global competition: the belief that Internet-enabled technologies are fundamental to improving business processes and competitiveness. A few years ago, manufacturers embraced electronic commerce (e-commerce) because it promised efficient business transactions at lower cost than with existing technology and practices. They are looking today to collaborative commerce (C-commerce), the second generation of e-commerce, which provides significantly more value and power than existing solutions.

C-commerce—the core component of CPC—shifts the focus to new revenue opportunities by giving companies a means to bring more innovative products to market faster than the competition. C-commerce is much more than a transaction exchange: it is an exchange of intellectual capital that has the potential to make a reality the much- anticipated "virtual" enterprise.

To reach a higher competitive plateau, medical product manufacturers are trying out new collaborative platforms and strategies. However, simply providing a collaborative platform is not enough. Atop these platforms, manufacturers must deploy automated business processes that facilitate the exchange of intellectual capital and capture business-process logic that can be used to improve existing and future products and processes.

To thrive in the collaborative economy, medical manufacturers must be highly efficient at sharing information within departments of the home facility and with partners, suppliers, and customers in the supply chain. They must not only accelerate product changes, but also take control of them in order to keep pace with the competition, reduce costs, and ultimately increase profitability. This goes hand in hand with the creation of an environment that promotes continual improvement and constant innovation. As the rate and volume of product change increases, so does the need to streamline change processes.

Intelligent Change-Management Systems

Obviously, what competitive manufacturers need are intelligent (automated) change-management solutions that eliminate all the drawbacks of manual systems and homemade electronic systems. Such systems also must automate critical business-management processes, support regulatory compliance, and enable all constituents of the supply chain to collaborate on, communicate about, and synchronize change in real time. And they must be easy to use.

Solutions that facilitate collaborative commerce and Web-enabled electronic change management will provide medical manufacturers with the benefits of faster new-product introduction, shorter time to ramp, accelerated arrival at full production volume, quicker establishment of profit, better-quality products, strict adherence to FDA requirements, and more-satisfied customers.

The best e-CM solutions enable companies to control critical knowledge and force timely action throughout their organization and the supply chain—and to do so elegantly. That is, the change-management system must be easy to implement quickly, be easy to use, and have a positive impact on productivity, all at an attractive price.

As manufactured products and business processes grow more complex, and as competition becomes global, every person within the supply chain must be empowered to create, share, and access the information needed to initiate and accelerate change. Adding more users, processes, tasks, or business rules should be both simple and easy to do, and not require programming. Waiting to roll out a bulky, imperfect solution that requires massive amounts of customization and coding, and takes months or years to develop, will not meet the requirements of the twenty-first-century medical manufacturer.

So a commercially available solution may make the most sense. Manufacturers should look for vendors that can deliver real-time, Web-based communication, collaboration, and synchronization. The goal is to acquire an automated change-management solution that can deliver coordinated execution of change across the supply chain.

Coordinated Execution

An effective e-CM solution provides command of every manufacturing C-commerce need, including all outbound and inbound documents, data, and information, automatically and efficiently archiving changes to manufacturing flows and providing audit trails compliant with ISO and FDA requirements. It "pushes" manufacturing change orders through the global supply chain, assigning tasks, scheduling work, alerting constituents when action is overdue, and escalating problems on a timely basis.

An automated change-management system is flexible and oriented always toward assisting medical manufacturers in the resolution of compliance issues. It replaces faxed so-called electronic signatures with true electronic ones, which can be filed as electronic records that comply with FDA requirements in 21 CFR 11.

Absolutely no information is allowed to fall into the cracks; the system always maintains complete visibility. Users can drill down into exception summaries to access details or "where used" information. Ideally, they can access every kind of information: manufacturing and engineering orders, documents, indentured bills of materials, drawings, specifications, procedures, and other data.

An automated change-management solution keeps track of time, measuring time in queue and time to complete. And it identifies bottlenecks and troubled process flows, acting decisively to optimize flow and to balance manpower requirements.

Because more and more business takes place at Internet speed, each e-CM solution must provide a variety of ways for system participants to collaborate and communicate. Tools such as Web browsers, e-mail messages, pagers, personal digital assistants, and digital appliances should all be part of the system's resources. The aim should be to make it possible for an entire organization, no matter how far-flung, to speak the same language at the same time, so that everyone involved in the supply chain can plan, transact, and implement change together.

The results of having this kind of control over change management are impressive. A company can manage change anywhere, anytime, save lots of money in the process, and gain the ultimate advantage of getting to market faster and more efficiently than its competitors.

Conclusion

To manage change effectively in today's Internet-driven world, medical manufacturers must control the complete manufacturing-change life cycle. They have to be able to communicate and execute changes in real time throughout the entire supply chain, globally. Critical to competitive success is the ability of all participants in the supply chain to work together at the same optimized pace.

Automating change via Web-enabled intelligent e-CM software is a good way to achieve this. This software gives medical device manufacturers the capacity for coordinated execution of change. With such coordination—which surpasses the provision of mere change-record visibility by intelligently implementing change directly on the floor of the smallest factory in the farthest corner of the globe—comes true competitive efficiency.

Michael Carroll is the chairman and CEO of Ingenuus Corp. (Sunnyvale, CA).

Reference

1. Aberdeen Group, "Collaborative Product Commerce: Delivering Product Innovations at Internet Speed," Market Viewpoint 12, no. 9 (1999); available from Internet: http://www.aberdeen.com.

Copyright © 2002 Medical Electronics Manufacturing