Three C’s That Will Matter for Manufacturers in a ‘Post-COVID-19’ World

While the world reels in the aftermath of the coronavirus and anxiously looks forward to therapeutic and preventive medications, it is imperative that we also begin thinking about what will be needed once this invisible beast is subdued.

Notice I said subdued and not eradicated. There is a good chance that we will end up co-existing with the coronavirus for a long time to come. Few diseases (and their sources) have been eradicated.

What Stage of Change Are We at?

How do we deal with major changes? Several phases distinctly stand out. Denial, anger, depression, acceptance, recovery, and looking forward to the “new normal.” Much has been written about this elsewhere so we will not dive deeper into any of these. However, knowing where we are now (the current state) helps.

It seems we are somewhere between depression and acceptance when it comes to COVID-19. That being the case, it is the right time to work on ensuring the recovery will stick and be sustainable.

Essentials to Survival in this Co-Existence

As with previous game-changing events (such as Sept. 11, after which airport screening and tighter security became the norm) we will witness major shifts in the way we live and work. Companies and people alike will need to adjust and re-calibrate their lifestyles. That is where the triple C’s can help.

#1 Cash Flow – Higher Is Better

Now more than ever, the value of cash is being realized and appreciated. Those firms that had borrowed heavily and pinched on keeping reserves handy for a rainy day are on life support or resting in peace. What do their tombstones say? In memory of a world leader that squandered precious cash on ill-conceived business ideas, and expensive mergers and acquisitions. For any business, cash is life blood – its volume, and flow are critical to survival.

#2 Cause and Effect – Better Understanding Is Needed

Conventional wisdom, particularly in the life sciences, speaks of finding the root cause and addressing the same whenever a nonconformity is found. Yet the term root does not exist in ISO 9001, neither in 21 CFR 820, 21 CFR 211, nor in ISO 13485. Ah, did we forget that conventional wisdom is usually wrong?

The usual technique to determine root cause is starting with a nonconformance (or a problem) and progressively asking the question, why. Some say one needs to ask why five times (as a rule of thumb).

Trouble is, there is no assurance that a single root cause will be found. Further, asking why enough number of times is likely to take us to the footsteps of God.

The key is to realize that “a single root cause” possibly does not exist; there are invariably multiple causes that together create a non-conformance. While the metaphor of the root makes for a good sound bite, it is an inadequate and can be misleading. Why? Ask yourself, what came before the root?

Take for example, the enormous loss of life from the spread of the coronavirus. What is the root cause? The wet market? The immunity level of the populace? Decisions made by governments? Or the virus itself? The last one sounds tempting because one could argue if this virus were not there in humans, the loss of life would not have occurred.

The virus is part of nature – what can you do about it? It really cannot be eradicated since it exists across multiple species on the planet. Eradication of this virus will require identification of, and then wholesale destruction of all the species that carry it.

A vast majority of those who are exposed to the virus survive. Strangely, those numbers are not commonly discussed in public forums. I am not quoting numbers here since there are significant measurement gaps or errors in what is measured, what is not measured and what is reported. That is a different debate.

Therefore, one must look at addressable causes and go deep enough to identify where and what kinds of measures can be put in place and where. In some cases, preventing the occurrence of a cause might not be feasible, however, its propagation to a failure might be stoppable.

Another aspect of cause and effect is systemic versus special causes; the same applies to effects. A lack of understanding how these work, and what measures are needed to address each leads to massive errors in applying corrective and preventive actions (CAPA). In brief – systemic causes are imbedded in and inherent to a system. As such, they stay hidden and hard to detect. Special causes are transient – they come and go, and typically are not easy to spot.

It is noteworthy that although 21 CFR 820 requires statistical methods be used in detecting recurring quality problems there is no mention of systemic causes. Further, ISO 13485 also requires investigation of causes of nonconformities without reference to systemic causes.

If you are wondering why the systemic versus special categorization matters, consider this. A cough resulting from irritation while eating food is a different matter versus that which occurs from the coronavirus infection. Needed actions to address and prevent each are vastly different. Incorrect attributions (to the wrong cause) can prove to be fatal. A good understanding of cause and effect are immunity boosters for any business.

#3 Cut the Clutter – Lower Is Better

Sounds innocuous and logical doesn’t it? Yes, but the challenge is in the execution. Application across the company and at multiple rungs of the organization is what delivers the most benefit. Let me explain more.

Clutter that accumulates slowly over time, like systemic causes, can become hard to spot. This in turn leads to enormous amounts of waste. We are talking about the clutter in an organization, not just on a desk or a workplace.

Here is one example as a case study: a pharmaceutical finished goods manufacturer (FGM) has over 1,200 suppliers scattered around the globe providing various ingredients from active pharmaceutical ingredients (APIs) to different kinds of excipients, vehicles, and packaging materials.

To stay in compliance with 21 CFR 211, the FGM had to:

• Ensure adequate controls are in place with respect to supplier selection, qualification, monitoring, and assurance that the supplier could provide materials conforming to specifications.
• Track performance history of suppliers and the materials they provided.
• Conduct periodic audits of the supplier, including technical audits to ensure their practices for equipment cleaning and storage of materials did not create potential for contamination.
• Track whether their tier-one suppliers have adequate controls in place to manage sub-tier suppliers, particularly for those providing critical materials.

The burden on the supply chain group has become severe and resource constraints can result in compliance slippages leading to increasing compliance risk overall.

Where is the clutter in this case one may ask? It lies in the proliferation of the supply base. If one were to use a Pareto (the 80/20 rule) approach, one could easily conclude that of the 1,200-plus suppliers, maybe about 20% will be truly critical. This provides for a good starting point and a reference for how many suppliers need to be managed, and the extent of scrutiny required.

Key questions to ask (about the suppliers) in this case to start cutting the clutter would include:

1. How many in the list are suppliers of APIs?
2. How many for excipients, vehicles, and other ingredients?
3. How many for packaging materials and labeling?
4. Which suppliers have been dormant (or not used) for a period of ‘x’ months?
5. How are suppliers dispersed geographically?
6. Which suppliers have the highest number of quality and delivery problems?
7. Which suppliers have been top performers in quality and delivery?
8. Which suppliers are single source?
9. Which suppliers are the most expensive and can the high cost be justified?
10. Which suppliers are slowest to respond for addressing nonconformances?

You can also use a step-by-step process to cut the clutter as shown below. It is adapted from the tried and trusted 6S approach often used in lean management. It is explained below together with application to this case study.

• S1: Sort the suppliers into those that are active and needed, remove those that are inactive and not needed.
• S2: Segregate the suppliers into logical groups.
• S3: Set performance criteria by group and risk level.
• S4: Set scorecards for performance monitoring and then create and use.
• S5: Standardize the steps above.
• S6: Sustain the process.

So there you have it. The Three Cs for a “Post Corona World.” The government and the Feds have made a strong commitment to help businesses with the first C, however, the other two C’s are up to us. Physics dictates that a stool needs at least three legs to stand, or gravity takes its toll. We just discovered the three we need – to stand up against the virus.