The Business Case for Quality: Culture, Market Access and Revenue Under the QMSR | Friday In-Focus

Meg. Okay, you heard them say recording in progress. So, what happened last week on Friday in Focus is that we had two fantastic guests, and no recording was made, because somehow, somehow, Zoom decided that despite the presets. they were not going to record the thing, or… So we have a transcript, thanks to Jose. But we don't have the recording, so we can't see your happy faces. Welcome, everybody, to Friday in Focus. I'm Sean Smith. I'm done complaining about Zoom for the moment. Quick ask before, I open up the what's coming up, is I had done a post on, doing these post… series of posts on

RAPS next week, RAPS Convergence is next week in North Carolina, and it's tell me you're going to RAPS without telling me you're going to RAPS. A huge pet peeve is when you put those little placards up that say, I'm attending an event. you know. LinkedIn is literally full of them this week for, you know, between LSI and RAPS and every other upcoming event. I would like people to use a little imagination and find another way to say they're attending an event than they're attending an event. That is a personal pet peeve of mine, and I'm just gonna leave it there. In the meantime, I'm gonna share what's coming up while we're waiting for everybody to join.

And… show… What's coming up? Am I sharing my screen? No.

No.

Okay, share… what's coming up? Share. So this is what's coming up. Next, Friday, we're gonna have, Mind the Gap, and… So, Michelle Jump, CEO of MedSec, is gonna come and talk about Little talk about problem. The communication gap, between manufacturers and hospital systems, and the need to shore that up. For a number of reasons, around product security. And they are introducing a new solution, which is called Bridge. And it's pretty neat, and there are opportunities

For consultants to learn about this new product and what… how it… how it can help their clients. Then, on the 22nd, very excited about this, panel discussion, FDA Ground Truth. show. The inspiration for this was Steve Silverman came to me at, the safety conference in June, and Michelle, and we talked about all the changes that have happened this year at the FDA, and what they really mean for manufacturers. So we've assembled a panel with Phil and Jeff and Angelina and David Fillmore, to come together and talk about the practical implications of the changes at the FDA and the changes in their thinking, and I think you're really going to get a strong sense of that from Michelle this morning around their focus on quality.

Naveen also posted something this morning about about… Okay, how do I advance? this.

We probably have to scroll down.

Yes.

PDF.

Draw the down button underneath the page number.

Yeah.

There's O… Right. Sorry. Now, more stuff coming up. Device innovation to commercialization phase one. So, Renee, and I think, Michelle, you're coming along for this, are gonna.

I'm color commentary, so this is, Renee's wheelhouse, mainly.

This is Renee's baby, and what she's gonna talk about, is the first step. in, you know, developing a medical device and bringing it to market, having a conversation about that. Getting your 510K is just the first hurdle in a long marathon. Now, in between, October 2nd, and Wednesday the 30th, we are gonna have… or before that, on the 25th, our own, Chris Kelly is gonna be joining us to introduce his new Risk ID solution, and this is about identifying risks early. And remediating them, and So, description pending, title pending, but, that will be up and, promoted soon. I also had a conversation this morning with our dear friend Luke, and he has an amazing presentation planned.

on, outsource, engineering and manufacturing and, contract engineering and manufacturing and the pitfalls, the many pitfalls of that. I'm gonna be at RAPS next week, exciting, and then I'm gonna be at Team PRRC at the end of October. October 15th to the end of October, I will be on a vision quest in northern Italy with my brother. More details to follow on the vision quest, and… what's last? November, the Innovation Summit in San Diego, and then, some of you who attended the PHMTI thing, that's the,

information professionals group. They're… I'm actually gonna be speaking at their event in… Yeah. November, in Philadelphia. So, sorry for all the ads, but that's what's coming up, and, please, you know, stay tuned for more. In the meantime, I have the pleasure of introducing, My friend. Can I call you a friend, Michelle?

You're… you better.

I'm better. I'm not Southern, so, you know, we're, you know, sort of guarded in the north, but the,

My cousin just moved to town last month, and so I've been talking to her a lot, and so I sound a lot more Southern than I normally do, so…

bring it. We're… we're, we're all in the mood. So, without any further ado, I give you Michelle.

Yep, and Tianna.

And Tianna, yes. Hi, Diana.

Hi.

So, today we're going to talk about, QMSR, the business case for quality, and what… what does culture of quality even mean, and how do you do it and demonstrate that you are implementing it? Because I think it's going to be a bigger part of, inspections, and write-ups going forward. So… You…

Is it the correct sign?

Yes.

Awesome.

So… Go ahead. So, you guys all know us pretty well already, and I know you know my C-suite. they've been enjoying the construction zone. Not really… they're super stressed out. I think that they need some Valium, but it's… I'm saving it for myself. So today we're going to talk about… just kind of go over a brief introduction, talk about why are we even talking about this, and then we're going to go into, MDIC's, 10-step program that they developed in the FDA way back in the day. So, why are we even here? Well, in the preamble to the QMSR, FDA talks about a culture of quality on three different occasions, and also in the new Investigations Operations Manual.

FDA further talks about it during the course of an investigation at least twice, and they… in both times, they're referring to or quoting the… the preamble. So that's why this is important. It's going to inform, the investigations going forward. The next reference to it, they're talking about the fundamental To the quality culture, and then… or to the culture of quality. So this culture of quality has now become a buzzword, and in essence, to sum it up. A Culture of quality meets regulatory requirements through a set of behaviors, attitudes, activities, and processes. So this means that during the course of inspection.

that the FDA is going to look for these things to support that you have a culture of quality. And this sounds really nebulous, and we're going to try to add some… what level of clarity we can.

Yep, and as Michelle brought up, the reason that we're talking about it today is that it's not… we'll go into the history, but it's not really new, but they did actually put it in the inspection techniques. So, we're seeing big shifts in what kind of 483s they're writing, and I think we're going to see even more shifts Around the Culture of Quality Concepts.

So, to start with, the initial discussion around the Culture of Quality started with the Case of Quality program, and that happened in the FDA in 2011. It was and still is a voluntary program. It was followed by, a partnership between FDA and NDIC To create a forum to bring stakeholders together from both in industry, and different… and consulting, and different… all… the whole different, landscape of stakeholders for, regulations. Then, followed in 2016 and 2017, They… they start a program to prom… sorry, a strategic, priority for promoting a culture of quality and oper… operational excellence.

Where there identifies the culture of quality and organizational evidence as a strategic, a whole strategic initiative. In 2018, the output of that was the voluntary, manufacturing product quality pilot. And again, voluntary program, but they are focused on quality and manufacturing with this particular initiative. That is followed by a joint FDA, MDIC, and industry work group. paper that they put on the Case for quality, specifically for Kappa, and how Kappa can be improved and better incorporated in your culture,

And then, a little bit more recently, in 2021, FDA and MDIC create this leadership engagement playbook that is supposed to be the leadership, To move from a culture of compliance to a culture of quality. This is their guidebook for that. Then, in 2023, they updated the Voluntary Improvement Program guidance document. Which describes the maturity appraisal methodology for and measuring continuous improvement. Then, in 2024 to 2026, the QMSR was finalized and published effective February of this year.

And so that kind of brings us to the history behind the QMSR, and when they refer to the culture of quality, what are they talking about? And so I can…

I was just gonna say, you can see there's 15 years of history where they are bringing up specifically the culture and the case for a culture of quality. But it… I still think industry really doesn't believe that this is something that FDA considers is important. Or meaningful, or even putting effort to, but you can see that they actually put quite a bit of resources towards this initiative. For a long time, too. 15 years. I mean, they have not dropped the message at all.

I was talking to one of the FDA inspectors about how did they think that, you know, this was… people were transitioning as far as, you know, with the new inspection methodology and the QMSR, and he said, really, across the whole FDA, that they're really surprised that FDA was as underprepared… I'm sorry, industry was as under-prepared as they were, because they felt like we've been talking about, you know, making this shift to ISO 1345 almost since it came out, and then we're talking about it in earnest for the last 2 years, and then we're going to inspections, and people are grossly underprepared.

So, Michelle, maybe I can make… you said then, I'm sure you will have some comments. So this is going to be my first one, and I hope I'm not disrupting, but I think that what the FDA is probably saying, and it's been saying for the last few years, is that… The industry has to get to the point where it can be a self-sustaining self-regulated, self-compliant institution. In other words. this concept that FDA is going to come to you and do inspections and figure out for you Where your weaknesses? are, and the things that you're supposed to do to correct. That is… that is a pattern and a trend that is just not sustainable. That in the end, the ultimate responsibility for self-quality, for self-compliance, for self-assessment, self-correction, really resides with the industry. So I think that

The ultimate goal of the agency is really to get to that point where they're gonna basically set an expectation That if you're not doing the job you're supposed to do, which is to take care of your business. In… in that the job of the FDA is going to be more to verify than to audit you. If you're not doing that, eventually, that's gonna be the target. The target is not gonna be so much That you don't have, you know, a good investigation here and there, but that your processes, that your systems, that you're… functionality is just simply not there, so… so the attack is going to be at the root, not at the branches. That's how I see this going.

Awesome comment, thank you.

Yeah, I think you're exactly right. So, you know, you guys may wonder, Michelle, why are you dragging us through the historic, you know, the timeline on this? Just tell us what the FDA expects. Well, just… just recently. 3 months ago, at the RISC conference in Boston, Michelle Tarver was the keynote. And these slides are right out of her presentation. And so, you can see, like Ty pointed out. the FDA has been talking about the case for quality for 15 years, and the head of the CDRH is still talking about the case for quality. And in… in that, she wrapped up all of the other initiatives that they had had over the last 15 years.

So, regarding the voluntary improvement program, during that early pilot, they've, they felt like, It significantly lowered the number of recalls and adverse events that industry had to complete for those that were participating in the VIP process. And then, lastly, they have a committee called Achieving Quality Excellence in Collaborative Community, and so, of course, we have one… another acronym, AQECC. And this is where, FDA collaborates with medical technology ecosystem. And, the goal is to advance innovation, but to Daniel's point, you have to be able to read between the lines sometimes on what FDA says, and when I have, I have as a joke on my LinkedIn profile that I speak FDA,

And so, I'm curious to see Daniel's, interpretation of this comment here. But it has this statement to… the goal of the program is to enable the FDA to identify manufacturers that consistently produce high-quality devices, which enables the agency to allocate its resources to assist other manufacturers and their increasing level of quality in devices, which means that they're gonna let, you know, the people that have participated in these programs and have this culture not go, but to more self-regulate themselves. And come in as a verification instead of an inspection. So the code is, is if you're not doing this.

FDA is going to allocate its resources to going in and doing an in-depth inspection on you if you're not doing these things that it's been talking about for 15 years.

And one thing we didn't add in this presentation, but we should all keep in mind, is that they did have that initiative to do, you know, like, unannounced same-day audits based off of risk, so that they could then better allocate its resources. So, FDA is putting a lot Of energy into doing new types of inspections in a different way than we've seen. So… Yeah, it's right here on the paper. Even FDA is saying, hey, you don't want to be inspected as much, or you want to prove that you have some… we have some confidence that you're going to produce safe, effective devices. This is an avenue for industry.

That I don't know if industry takes very seriously, and they should. Oh, there we go.

We got the poll.

Yeah, sorry about that. I thought I'd take advantage of the… Screen time to drop a poll in, but please continue.

Okay. So, what that Case for Quality, pilot program, revealed is that there's a serious problem with how Kappa is viewed and treated within organizations, and including… and these quotes are right out of that program for the Case for Quality Kappa process improvement. is our staff dreads… dreads. This is a very common emotion around Kappa throughout the industry. Dreads being assigned to Kappa because it's burdensome, and it's seen as punishment instead of an improvement opportunity. And then further, our CAPA system is bloated. It's focused on creating documents instead of resolving issues.

And again, on the… Michelle is not making this up chain. The paper literally creates a hashtag. Hashtag Make CappaCool. I'm like, you gotta try real hard to make Capp a cool, but I thought that was… that… that was really hilarious. It caught my attention. And so…

That was in 2019.

So that kind of kicked off the, like, what are we going to do to make CAPA cool, and to make following the QMS easy? So this is… this leadership engagement playbook about going from a culture of compliance to a culture of quality was the answer to the outcome of that first paper.

And we're gonna, if you want the link to this, we'll send it afterwards, right? Yeah.

It's, it's the hyperlink right underneath the, the,

It doesn't work.

Yeah, and I can have the PDF so we can share it. A lot of this presentation is based off of the contents of this paper, because it is actually pretty good and valuable in terms of steps that you can make that are actionable. So…

I think this is as close as it's gonna get to FDA telling you what their inspections are, because they did help author this paper. But, of course, it's not binding. So, step one, of course, is you need to facilitate a culture of quality, so you start there. But the buck stops, quality stops with top management. So it… quality starts with top management, which means the buck stops with top management. So, the culture starts at the top, that leadership is responsible for the communication and customer focus, integrating quality policies and processes, of course, across the organization, and our new favorite buzzword, risk-based decision making.

And what that even means in… to an organization. And then, you know, most importantly, another thing that you're going to see come up, you know, again and again in this particular paper is about providing the resources needed to make safe and effective devices. So, leadership does not simply approve the quality system. Leadership actually has to actively plan for the success of the quality management system.

What's interesting about this is that this is also talked about in MDIC, but a lot of this terminology is right out of the ISO 1345 standard, like communication with customer focus. That's communication within your organization and your customers, integrating your quality processes, using the risk-based approach in your quality management system, which top management is ultimately responsible for. So… it's been trickled in for a long time, but now it is auditable. So, keep that in mind.

So, this is, you know, the classic. Where you put your quality policy is usually either on the badge or in the break room wall, and that was the level of expectation. Wasn't even necessarily, can somebody quote the quality policy? But is it displayed? So, yeah, you could put it on your badge or in the break room all day long, and that doesn't mean that people understand and implement that. And these are questions right out of that guidance document about how to assess what your current state, and value system is around quality.

And if you can't answer it, then you don't have a culture of quality.

So… So, once you get that assessment done, these are the other 9 steps in the program, and we could probably have, you know, a half-hour discussion about each one of them, so we're just gonna, like, kind of breeze through them, but do go back and, And read these, This guidance so that you understand a little bit more deeply what's behind all of this.

So for step 2, we're going to talk about developing an actual quality strategy. I don't know if any of you have done any sort of… leadership or executive training or anything like that. But what's really interesting is that MDIC also has this graphic, which is really, really classic, right? So you have a mission, vision, quality, like, what's your mission? What's the vision for the company? That's where you start. What's the high-level statement of purpose? And then you need to have a concrete, defined strategy to drive the outputs, which is, in this case, behaviors. This is, like, the MVP mission, vision, planning, to get people to do what you want, that leadership is always used, and even MDIC and

FDA are recognizing that strategy, and then we break it down a little bit more concretely. So, the first step is define your mission, and that's really broad. But once you've defined what you want to accomplish with your quality strategy, you can gather data. and articulate that strategy in a way that everyday people can have. So you go from this broad concept to kind of measurable metrics, and then you identify your goals and ensure alignment is the step I feel like gets missed the most. You have a small team that develops, okay, these are our metrics, this is what we need to do, this is based off of the data, and then it never gets told to the organization at a larger scope. So if you're gonna do these activities, make sure you don't

Missed the handoff. That's the easiest part to miss. Yes, John?

So, we have a question from the audience, how to measure quality culture, a medical device IVD manufacturer. Does a manufacturer comply to regulation or standards, FDA approval, CE marking, etc, automatically? Could, Automatically could be… have a… could be said to have a quality culture. You know, just because, you're compliant doesn't mean you have a quality culture. That's what I'm getting from that.

Exactly, and that is right in the title of the paper. That we're not talking about compliance, we're talking about culture. So one… so on that note, one thing I wanted to point out for behaviors is that you need to clearly define and articulate what those behaviors are. they… they aren't gonna be just, like, etheral. Like, people need to understand that are doing their jobs every day, day in and day out, what are the expectations around their behaviors of interacting with your… the product and the quality management system. And that needs to be tied into the identification of goals as well.

Yeah, and we're only on step 2, and there are 10. I don't know if we'll get through all of them, but one of them is to reward and recognize behaviors, because that step also gets missed, right? Like. people do the right thing, they never get rewarded for it, they never see any benefit for it, and then ultimately, as humans do, we find the easiest path forward. So then it kind of slips back into a compliance focus instead of a… Quality. Focus.

Can I… can I just make a quick comment about the previous… the slide? You know, you've got an important, element there, which is the element about gathering data. And if there's an industry that generates a lot of data, that's us. That's the medical device and pharmaceutical industry. The problem that we have with data is that we really stop at the gathering of the data. We don't do the right level of interpretation, we don't do the right level of analysis of the data, and then we don't go into the right level of systematic conclusions with respect to what the, information or data is giving us. I mean, you talked about Kappas.

And… and kappas, you know, through kappas, we generate a lot of data, and we… we seem to have, you know, repeat kappas, ineffective kappas. Why is that? the data is telling us exactly what happens, and I see this every day. But… just… if we stop at just the gathering of the data and not really doing the interpretation, we're not going to make a lot of progress. That's… that's my point about data. I think… I think we've got a great amount of data. to work with, but we don't use it. That's the problem.

Yeah. Developing your quality strategy. Management review. Management review can be… A very interesting… peek into an organization. You see it misused a lot as a business tool, you see it being, like, super shallow because they just want to check off a box.

Check the box activity.

It gets, like, both ends of the spectrum, where you, like, have, like, way too much Business, and only business in there, and then just… very shallow repeats of quality trending data review that really has no actions or anything, but management review can be a really excellent peek into the culture of quality, because it's a checkpoint, and you should have leadership asking basically what I think of as two sides of the coin, and they're really complementary. Good leadership should ask, what do… What does my organization need, and then what does my team need? And a lot of times, the needs are matching, and I feel like that gets lost with organization, because

like, teams need clear decisions from leadership. An organization needs strategic decisions from leadership, which fundamentally have to be clear to implement them. Same with training. Like, you can have the brightest, youngest, sharpest new person coming in, but if they don't get formally trained, they're gonna learn a lot of bad habits, or they're gonna be… as ineffective as someone who's just muddling their way through, even though they have such good potential. Well, organization needs competent personnel. Competent personnel saves money. Nobody talks about that, but they do. If you have a person that can be efficient, do it right every time.

Hit, you know… put the ball in the basket, it saves you money. It saves you on kappas, on NCs, on quality review, on DHR reviews, on recalls, like… Trained personnel matters. People don't talk about it, but it does. Do you have enough staff? Is there enough capacity to handle the unexpected? Can you handle that kappa? Because most companies work everyone to 100%, and then the second… something goes wrong, there's no one to pick up the slack, and everyone's working overtime. And they're burnt out, and that's what leads to shallow, empty investigations and repeat kappas. Do you need more funding? Do you need better equipment? These questions reflect each other, and you should be asking them.

And Ty, go back for a second. And as a reminder to everybody, FDA previously was not privy to management review, and now it's going to be a key inspectional objective to review, and they're going to be looking for these processes in place that we're talking about here. And so what this means is if you have multiple breakdowns in your quality management system and in management review, that data's not talking to each other or leading to any actions, it's going to roll up to findings against top management And the evidence will be the culture of quality is inadequate to, Create safe and effective products.

Yeah, and nobody wants to hear this, but this is absolutely true. Top management is responsible for, like, for providing enough dedicated resources to meet your minimum quality requirements, which means if you cannot close CAPAS timely, you cannot close complaints timely, and it's a resource problem, FDA absolutely can write you up, even though industry cries about the budget. They don't… I mean, unfortunately, FDA just doesn't care. They, they… They want to see that you are doing things. So, evidence of a meaningful review is that you're having quality decisions over business decisions. There's clear, assigned actions and timelines, dedicated resource commitments. This is gonna be my, like, soapbox for the day, because

I'm in quality, I know what it's like when… suddenly Quality owns a manufacturing Kappa, and you have no expertise at all, and you really need a manufacturing engineer to kind of look at what's going on, but they say you're in quality, you have to handle it. Because they're too busy making money. That doesn't really help anyone or the organization at large, it just costs money at the end of the day. There's follow-through, and that you have risk-based decisions that are tied to patient impact. So, you need to make quality a priority. So we talked about setting a quality strategy, which you can kind of see if that's successful with your management review. You need to make a quality, quality a priority. How do you do that? Well, there's basically 3 traditional resources buckets. You have people.

You have technical competency and training investment for resource, and then you have infrastructure. Do you have the right equipment? Do you have the right space? The right, you know, units, whatever? But like we talked about, and like the Case for Quality showed, who handles the unexpected CAP law? How does your management flex resources to show a commitment to quality? And where does quality and regulatory sit on your organization chart? Do they have the ability to have authority to assign resources and drive priorities? Do they have independence, or is QA under manufacturing and there's a conflict of interest where…

You know, do you sell product, or do you… stop for an investigation, and then do they have the influence? Are they actually treated as an important member of the team, or does the communication from the organization be… are they business prevention experts? Are they the police? Are they the stopgap? That's kind of, you know, what's the sense of the QA department.

Unfortunately, Tianna, I think the problem in this case is that For us, in quality and compliance as well. unfortunately, we have to earn the right to exist. In other words. So long as we can come in and show to management, and to production, and to the other functions that we have the necessary technical credibility, that we are actually facilitators into their issues. If we do that, then that level of recognition for the authority and independence that we have to have, it's going to be there. But the problem is that in many quality organizations.

that technical credibility is not there. So then you lose the respect of management, and we need to change that as well.

I agree. what happens when priorities conflict? So, this is also a general, like. people skills. You'll see a lot of this is if you've taken any people training, and learning how to talk to people, and management, and how to handle conflict. It's kind of interesting, because they use a lot of the same concepts. It's basically, you know. You have, denial, what is the what, what are they denying, and then they resist, and it's find out why they resist, and then exploration, how do you solve it together, and then the closure, you commit to the win. Like, when are we gonna do, what are we gonna do? And then, inevitably, the cycle repeats, but that is a classic conflict resolution strategy.

I would like…

I'd also like to say this is very similar to the stages of grief. Because, you know, I call myself a grief counselor. Well, here it is, right in this guidance document, that there's an understanding that there is this element of grief and kind of emotional resistance that you have to work through before you get to acceptance.

Yeah, I think… I think there, there was a question from the audience, what about if the company is too busy losing money, or otherwise not open to… to change? And I, you know, we've all worked at places where the management assumes that because they're management, they're smarter than we are, and they're not receptive to new information, and they're not receptive to criticism, and they're… You know, I worked at a company where, they made me physically remove any weaknesses or threats from my SWOT analysis.

And you're like, that's not a SWAT. I was like, I was like.

If we're not even internally allowed to be honest about the weaknesses within our organization, the hope for change is non-existent.

Yeah, you bet.

I don't know if you ever worked at that organization, or a thumbs up, or a heart, because I, you know, have to say that, you know, one of the frustrations is having the responsibility, but… but not… having the power to implement these things, you know, you can…

Oh, yeah.

You can see where the entrenched problems are, you can see where the entrenched personalities are, you can see everything, and you're powerless to change it. And so, I think we've all had that experience at one level or another.

Okay.

Maybe you could do a poll, because I think you touched on something that's extremely important. How many times have we encountered exactly what you just went through, right? And that happens every single day.

Yeah.

Regardless of the… regardless of the industry you're in.

regardless of the industry or role that you're in, you're going to meet with resistance along the way, so my question, back to Tianna would be, you know, tactics for overcoming the resistance.

We're right at step 4, so I got it for you. You were leading it into perfect. I'm gonna skip this for the sake of time, but I'm gonna read the tagline, because it matters. Compliance asks whether we can proceed, quality asks whether we should. That should be, like. a statement on the wall somewhere, you know what I mean? Compliance asks whether we can Quality asks whether we should. So you have a compliance focus versus a quality focus. If you have a quality issue, you need to decide what part, like, what road you're gonna take. You know, is it the bare minimum, or are you gonna… and risk a recall, or are you going to do the investigation and lose some money? And that's hard for a company. I recognize that money

moves the world. Which is how you really overcome challenges with management. Right? If you are really passionate, you hit them where it matters, in the money. That's the only thing that drives companies. So measure the value of quality. Quality is not a cost center. You need to change that mentality, because that's the only thing that's gonna drive management. At the end of the day, they see dollar bills. So… you need to drive the value of quality as a value creator, not the cost center. We're not holding up product, we're not doing expensive kappas and NCs and recalls that just generates paperwork. We're not here to take the blame for slowing things down.

What we're here is to internal, like, to… To demonstrate your value is a whole list of internal failure costs. Good quality can prevent so much time wasted, so much people waste, in looking at redesigns. You're catching software errors faster, you're catching… you're lowering the cost of scrap, you're lowering rework labor and overhead, you're lowering the amount of complaints that can come out. Good quality that's involved early and passionate about what they do. can really make a difference in making this be smooth, and you can quantify that. If you can say, hey, we've implemented changes in our

NC process driven by quality, and our number of NCs has gone down from 35 a quarter to 12 a quarter, and if you quantify each NC at 40 hours of work for these departments, you can put a dollar bill to that. That's a little bit of a math exercise, but it's worth it to do that if you're really struggling and you're passionate about a management project, hit them in the dollar bill. That's where it's gonna matter. And there are external failure costs that you can save that are even more cost savings. A product recall costs companies reputation. Which is tangible. It costs them goods, and people time, and lots of people time, and it could cause an FDA inspection.

All quantifiable, and you can put it in man hours, and if you don't have the cost for your man hours, you show your man hours, and smart leadership will look right at that.

Chris.

I'm gonna… I'm gonna ask… I'm gonna interrupt, sorry. I would like to call out Jose, at the moment, and I would like to say, let's build this cost calculator with Lean. Let's build a tool that helps them quantify the actual dollar value. of quality, and use the EQMS, or the quality management system that the company has to quantify that. I know that Mr. Math Brain can help me with this. What do you think, Jose? Doable? Yeah? Okay.

Happy to work with Michelle on that, yep.

Thank you. Look forward to that calculator.

That's really exciting. I've been dying to do something like that.

I would love to see a tool like that, that just looks at your quality management system, and then says, look, people, this is… this is how we saved you money. This is… this is where… where we were successful, and turns the story in the opposite direction.

Chris?

Thanks. God, this just goes to what I was talking about with Sean for the last few weeks. About identifying risk early in a project. And projects that I've worked on, medical device company, where they didn't want to do what they saw as an extra step before they started coding, because, oh, we don't have the time for it, right? And my answer has always been, okay, how much time did you lose last project on rework? stuff being discovered late in the cycle, or worse, after it's released. That is a huge time suck. You've lost all that time. You're rushing on this. Hell-bent for leather, time-to-market nonsense, and then they look at quality activities, oh, we'll get that later, we'll reverse engineer the documentation, we'll do it all later, and then they just… they hit that wall.

And my… so my only input I wanted to put here was if they had just followed what quality told them. Instead of it being, oh, we don't have that time for it, because you're going to have to pay back that time when you don't follow quality, the time savings is following quality.

Oh, yeah, I mean, with design, this is a classic, classic pitfall where people spend too much money, right? Or, like, they spend… they make poor decisions about their budget and their money, because I always… Classic is testing, right? They always say, hey, we'll go with our minimum testing, or do our 510K, and we're always like, please don't. please just spend the extra $20,000 now, because if you don't, you're gonna have to redo all of the testing, and it's gonna be $70,000. So… please just do the $20,000 and the extra 3 weeks of testing right now, and then they never do, and then you have to withdraw your 510K, and then redo all the testing anyway. That's, like, classic, right? Like, especially with startups, and…

It's not that you don't understand the gray line. Like, I have worked with startups, small companies. At small companies, been involved in budgets. So I feel like I'm more passionate about this than most quality people, and I'm a little bit of a math nerd myself, so, like, I really understand the metrics and the math behind this. And it's just… It makes… I see so many poor decisions that feel almost emotional and impulsive, when I'm like, you could save yourself $50,000 by doing X, Y, and Z. would you like to do that, or would you like to run at risk? These are your choices. Classic. We're running out of time, we have 10 minutes left, we're only on step 5, this is a 10…

Before you say that, anybody who would like a certificate of attendance, please put your name as you would like it to appear on their certificate in the chat, in the chat. with, your email address, and we will see that you get it, because this was supposed to be a regular webinar. Ordinarily, on Fridays, we do not offer certificates of attendance. Today, we do. So if you want one, name, email address, in chat, go.

Okay. Michelle, I've been on a roll. Do you wanna… do you wanna, or do you want me to keep going?

You're doing great. Knock yourself out. You've got only 10 minutes left.

Fair. So, we kind of touched on this, but under QSR, especially because it was so old, even though there was a very long preamble that said, this is what we meant to say. it very much had kind of these isolated subsystems. You know, FDA always had QSIT, and it always had a wheel that implied that these were connected systems, but the regulation itself wasn't written that way. QMSR does a much, much better job at putting bridges between these systems, and this graphic is a little misleading, because there should be, like, Kappa and supplier controls connected, and Kappa and product and process connected. But the idea is that you can work in and out of each of these systems, and more importantly, that they're talking about this.

Daniel brought this up. You have shallow… kappas all the time that get repeated all the time. It is super common and classic. Especially in big companies that are drowning, because what happens is, one. poor quality engineer gets assigned the entire Kappa, they get no involvement from any other department, even though it's an entire company system. And so, something happens, the investigation is, like, really shallow, we find the very tip of the iceberg, and we say, hey, we know the risk here. Well, obviously, the rest of that iceberg cannot be seen when you have these shallow investigations, because you don't have resources, and you don't have management buy-in.

And… What is really important from this slide is that you need to have management buy-in on the correction. Because… If you have identified all of this work, and… and… really, Kappas can be quite a big deal, right? If you have manufacturing, and if the… the real root cause is that my manufacturing equipment needs replaced. It is 25 years old, it is falling apart at the seam, we cannot get replacement components, we have done the limits of everything. And I need to buy a $150,000 machine and do IQ OQPQ, Management has to accept that, and they often can't, and I do understand that, but you're gonna have a repeat kappa.

And eventually, FDA's gonna see it. And then eventually FDA's gonna say, well, this is not good enough. Like, you are having repeated quality issues, and you have increased complaints. It puts patients at risk. What is your solution? And then that poor quality engineer gets blamed for finding the right answer, and management doesn't buy in on it. And it's easy to point the finger, so that's where a proactive culture is really meaningful, and honestly, it feels great when you work at a company that listens to you like that.

Luke?

Kris was first.

Okay.

Oh, Kris, you're muted.

My head, that's… I don't know why it's still showing, that's my bad.

Okay, then I'll go.

My bad.

If you were the… if you were the Pope, I would be the Catholic, so everything that you say, I will… I mean, it's all true. For us, the difficulties are that the devil are lurking behind the gray areas.

Yeah.

For instance, like, once we had a… We found out that the cable didn't have the right UL certificates to export it to the United States and Canada. But in fact, the quality of the cable we had, which didn't have the certificates was of better quality than The replacement quality we could buy, and then you're… then you have to weigh it in, like, what shall we do? And… at least if your culture for quality is great, then you try to find a path forward that, in the end, you end up with a good quality cable that has UL certificate, but in the meantime, you're stuck between a rock and a hard place to do things like that. It was the same with the labeling issue, that

You had a nice label, but it didn't have the right certificates. What shall we do? And then it becomes hard.

Oh, yeah, I mean… Quality definitely has to… weigh the pros and cons of every decision. There's a lot of gray area. If you're a good quality person, there's a lot of gray area towing on the line, right? It's not black and white. I think it always comes down to patient safety.

Bing.

Right, so…

Yeah, but also, like, even with a good quality system, no compass at all, whatever, you can still make a lousy product.

Oh, yeah, you can.

The other way around is also true. If you have a good quality system, you can make also a good quality product, and you can improve the quality. Make you better.

Damn. That's a great point. There is… there's a lot that can be really hard. This is probably where we're gonna end, and it's kind of an interesting one. Let's talk a little bit about the age of technology, because this was coming out of a lot of FDA stuff. You know, when I started, this is how we filed our quality management system, was in the lovely Fire Kings, and you all open them, and the chalk falls out, and it's… Terrible, and they're super heavy and very expensive. But we don't live there anymore. We're in the new age of AI and cloud-based softwares, and, you know, everything is very, very convenient.

While we're talking about a proactive culture. AI is coming for quality management systems. It's just where we're at, and being able to adapt to it as a quality person is going to be really important. FDA is already using AI themselves, so they have the customs compliance with the PREDICT, they have ELSA. I think there's one more too, Michelle, that I'm…

Good luck.

halo that I'm.

So Halo is basically the AI behind Elsa. So, it's the AI behind their AI.

And so, ALSA's very, very heavy in the regulatory world now. PREDICT is really heavy for import compliance. But there are challenges in using AI, and this came out of some of the talks with FDA and Ruddy and, You know, if you're gonna incorporate AI into your quality management system, these are the questions that you need to be asking yourself. But one of the most important and interesting parts that FDA mentioned is that if you are going to do AI, you need to understand how to validate AI. And what they mentioned was that you have to be trained not only on the technical requirements and regulations that you're reviewing.

But you also need to be trained and a technical expert on how that AI functions. So now you're expected to have two sets of extremely specific skills, and that is something that you should keep in mind on the qualifications of the person who's going to validate your AI that you incorporate into your quality system, because that's the one that FDA has mentioned that they're expected to look at. They gave us the…

started giving warning letters for the use of AI… the inappropriate use of AI.

That, yeah, that's gonna be the next slide after this one, but this is a validation in a risk-based environment that they put out. So these are the steps if you're gonna validate an AI in your quality management system. Be prepared to address these components. And as Michelle said, they are starting to write, warning letters against the use of AI, specifically over-reliance on it, This… this warning letter is hilarious. If you want to read it, it's so funny, because they're just like, you just said AI told you to do all these things, and you did them, that's, like, clearly not good. So…

it asks… they asked AI, what are GNPs? And they just blindly followed it without, like, actually verifying that it was anything real.

Yeah, so, knock yourself out. It is… it is a good… it's a good read. You can read that FDA is, like, toeing the line with being, like. You should hire someone that actually knows.

I guess we're talking about math nerds. We're regulatory nerds that we read warning letters for fun. So…

Nice to see you.

Two minutes left, so…

Yeah.

I don't know, Sean has another poll, but if we could skip to the last slide we added last night.

Let me… sorry, close your eyes if you get sick. This one.

Yep. So, I just wanted to say, you know, thank you to all those people out there that are, you know, risking their lives every day so that we can, be safe and have a safe… a relatively safe country. And I just… I'm beyond grateful.

Yeah, and we want to thank all of our first responders, and… Our medical personnel, and, you know, our military personnel, and everything that, and remember. So, it is September 11th, so…

Hmm.

Okay. I know we didn't get through it all. There's lots of good stuff. You'll still get a copy of the slides.

Let us know if you want to encore later to see the second half of the presentation.

If you want to see us get even more spicy, and passionate…

Very nice job, ladies. That was great.

Thank you, that was very lively.

Yeah, and thanks for all the discussion. It always makes them… it always makes it more fun than just… droning on.

Yeah, I really, I really appreciate all the energy that everybody brought today. I mean, when we think about how these calls started a year ago, and the way that they've grown, and the momentum, you know, I think that this is… really a unique space in the industry. I don't know of anything else like it. Please bring a friend, and spread the word. We can… we can definitely use your support and interaction. Anybody who's interested in becoming a paying member, these calls are always free. Everyone here is welcome. But if you're alone and struggling out there as a… solo consultant, or somebody who is trying to understand, you know, what their future is gonna look like. You know, book time on my calendar, I put time there. You know, I'm not gonna try to sell you. I'm gonna, you know, try to support you. And that's what this is about. We come together and we support one another.

I really hope that we can develop a cost calculator out of this call. I think that would be an excellent outcome. And any other outcomes that you think that would be useful for this call, or a continuation of Part 2 with, Michelle and Tianna, I think that would be a fantastic thing. And I can't express enough gratitude. Again, thank you for the solemn reminder about What day this is. Hell, thanks, everyone.

Thank you.

Thank you.

Thanks, everyone.