Listen to the Voices

There are two voices you must listen to in Quality: The Voice of the Customer and the Voice of the Business. Of course, the customer has their wants and needs, and your goal must be to meet or exceed them. But then there is the Voice of the Business (VoB).

The Voice of the Business, as I teach it, encompasses the company’s business environment including external regulation such as OSHA or other government agencies. It is what the industry (aka business) demands of you. VoB is especially important in highly regulated industries such as medical device manufacturing where you have the FDA involved.

The importance of this became abundantly clear when I joined a global healthcare manufacturer as a divisional director of Operational Excellence. I had just come onboard as the company was making a major change in our division.

The company had a family of products that were high volume, low mix (things we made a lot of, and there were only a few different types). So your basic high-speed assembly line. The number crunchers realized a lot of money could be saved if we moved manufacturing from a high-cost European Plant to one of our factories in Mexico. (The bureaucracy of moving from a European Union location will be saved for another article!)

The plant in Tijuana that was to take over the operations had a good history. Respectable management, solid workforce, and the machines in the line would be new. A lot was riding on this, as the word on the street was one of our competitors was going to get out of the market for this product…meaning we would have an opportunity to grab a big share of the market. Expectations were high.

But the company did not fully take into account the Voice of the Business (and, as we’ll see, the Voice of the Customer was also ultimately ignored).

Another part of the company’s cost saving initiative, was layoffs. Which had led the QA division short staffed. To meet timeline to start production, the QA team could only get 3 of the 5 product lines certified.

At the time, FDA requirements only required quality certification of a new product line. As the product was existing, and the equipment was the same, there was not a requirement for FDA inspection and certification. The company, before cost cutting moves, would have self-certiied everything. The internal Voice of Business had Quality at the top of the list. But recent business set backs had the company eager to move more quicker (though with less people) and they did not want to wait.

It was rumored that leadership overruled QA, and felt that 3 of 5 lines certified were enough. They were essentially the same, and the other two could be certified as production began. And so production began. And it was good.

The product was essentially a bunch of sterilized plastic assembled into a kit then hermetically sealed. It cost pennies to produce, yet sold for tens of dollars. Multiplied by hundreds of thousands of units, you might see why the company was eager to get things going.

The competitor who had the lion’s share of the market was getting out because of a rash of unfortunate incidents resulting in recalls, along with various penalties, and fines. Despite the lucrative market, they were tired of doing high volume production and were going to focus on their low volume biomed devices division. Hence the rush to ramp up production in order to capitalize on the opening market. And with three of the five lines certified, it began well.

Running 3 shifts for 24 hours of production was working out too. Output was pouring out of the factory at expected production rates. Work began to certify the two remaining lines. The Sales teams were pushing the product at record numbers…the plan was working.

Just as the company was to announce some record numbers a fatality was reported. The another. And then a third. All three fatalities had been using the product. Various hospital, Government, and even Company investigations all pointed to product being a source of bateria that caused deadly infections. The product had not been properly sealed, and therefore not sterile when used on the patients.

An FDA-mandated recall wreaks havoc upon a healthcare manufacturer. Production shuts down as everything is inspected. All work-in-progress, inventory, and product in the supply chain must be inspected. Products with customers must be pulled and inspected. Any product from the contaminated lots had to be destroyed. Most of the inventory ended up being destroyed as inspections would find more improperly sealed bags. The recall costs were staggering. But what was worse was the damage to the company’s reputation. It never fully recovered from the blow and never grabbed the market share it had hoped. Another competitor, one who took a bit more time in getting ramped up, ended up with the Lion’s share of the market.

The Voice of the Business in Healthcare (provider or supplier) is full of regulation, bureaucracy, and oversight. And it’s all in the name of Quality. The stakes are high. If you make a plastic Dollhouse with a deformed shingle, it is likely never to get noticed, and if it does the worst might be an upset child. But a small plastic deformity in a medical device can cause death. Here was a case of the sound of cash flowing into the till drowning out the Voice of the Business.

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