The importance of quality risk management in global health supply chains
By Manusika Rai, PFSCM Product Quality Assurance Manager based in the Netherlands.
What is the probability of risks occurring in the supply chain?
How can we detect these supply chains risks?
What are the consequences of these risks?
These are just some of the questions that supply chain professionals have to ask themselves to ensure the integrity of health products as they make their journey through the global supply chain.
According to ISO 31000:2018, risk is defined as the effect of uncertainty on objectives. The effect is a deviation from the expected and can be positive, negative or both. Throughout our lives we do things that involve risk but probably most of us think very little, if at all, about what harm it may cause. Health products – be it medicines that we take for pain, or a medical device used in a surgical procedure – also carry risks, but patients or consumers, trust the expertise of the person who designed, manufactured, transported or administered it, and therefore unknowingly accepts the risk.
Compliance with Good Manufacturing Practices or ISO 14971 (application of risk management to medical devices) along with assessments done by regulatory agencies offers some degree of assurance that risks are managed. However, we know that the global supply chain for health products is complex and there are an abundance of post-manufacturing processes in the chain that create gaps for potential mistakes and risks, specifically in the distribution of pharmaceutical drugs.
In the study Quality risk management during pharmaceutical ‘good distribution practices’ – A plausible solution, Kumar & Jha (2017)1 confirm that traditional quality risk management activities are focused more on pharmaceutical manufacturing than -distribution.
Kumar and Jha proceed to propose a model solution for industry professionals and policymakers to reduce product rejection thereby paving the way for substantial business growth.
Their proposed solution, which focuses on pharmaceutical drug distribution, can be viewed here under Section 5.
Not addressing quality risks in the supply chain has implications such as market withdrawal, recalls, rejections and ultimately patient safety.
That is why quality risk management is so important and a necessity not only in the pharmaceutical or medical device industry but also in the global supply chain.
We as procurement and supply chain professionals must remember that our goal is to improve the health of people through access to quality and safe products.
PFSCM’s approach to managing supply chain risk, and reducing process failures
Over the last 15 years, The Partnership for Supply Chain Management (PFSCM) has procured $3.9 billion worth of health products, and delivered more than 18,000 shipments to 91 countries.
In 2020 alone, more than 1,693 shipments were delivered to 86 destinations. Our supplier base is spread over 50 countries.
Needless to say, in moving such volumes of products across continents, we have encountered a number of issues that occurred during operations like transportation, handling and storage.
In compliance with Good Storage and Distribution Practices Guidelines and ISO 9001:2015 standard, PFSCM has a mechanism in place to clearly distinguish between complaints related to product quality and complaints related to distribution (i.e. incorrect quantity).
Of all incidents logged from 2020 till date, 95% of those were a consequence of some type of process failure in the supply chain. Common issues noted were exposure of the product beyond recommended temperatures resulting in product degradation, and physical defects (e.g. damaged boxes, wet pallets, broken tubes) impacting product integrity.
Approximately half of these incidents resulted in product and/or financial loss. These occurred either during the transportation (international or local) process or during the clearance and loading/offloading process at the destination. Given the multiple parties involved in the supply chain, communication and handover of products are important aspects and have been noted to disrupt the supply chain of quality health products at the right time.
While we use our Corrective Action and Preventive Action process to identify root causes and ensure implementation of preventive measures, we are also using lessons learned to take a proactive approach to quality risk management. Embedded in our ISO 9001:2015 certified quality management system, and in accordance with our risk management policy, we are using data from the incident trend analysis to identify high-risk processes and adopt mitigation measures.
Some of the notable risk mitigation measures implemented in the recent years include:
- Requiring all service providers engaged in storage and distribution to be compliant with Good Distribution Practices.
- Formulation of policies and guidance on management of products requiring special handling.
- Use of data loggers for all cold chain and frozen products.
- Use of specialized freight forwarders for cold chain shipments.
- Training and retraining of staff on key processes including communication and transfer of information between units.
- Inclusion of key product features such as storage and shipment conditions in the master data and translation onto transaction documents like purchase orders and advance shipping notices.
As we continue to learn and evolve, we look forward to applying the principles of quality risk management more widely to develop strategies not only to improve supply chain operations but also to create value for our customers.
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