COPQ – Cost of Poor Quality
The life sciences industry faces unique challenges that have made it a late adopter of continuous improvement techniques such as Lean Six Sigma (LSS). The pressures to eliminate costs to compensate have driven life sciences companies to turn to LSS methodologies within the past three to five years to identify and eliminate wasted costs from the value stream. Lean and Six Sigman in Pharma have been now come into existence for this purpose.
Lean has proven successful in some operational infrastructure aspects. 5S, poka-yoke and other error-proofing methods have been included in inspection. Many of the principles of Lean, however, are most effective in a high-volume, discrete-process manufacturing setting. Certain principle of Six Sigma in pharma have proven challenging to implement. Studies have shown that approximately only 10 percent of life sciences companies have implemented statistical process control (SPC), far below the general industry average. The more successful techniques of Six Sigma in pharma have been project management based, with which companies have made strides in using the DMAIC process for root cause analysis with sustainable results.
A popular LSS tool is the COPQ – cost of poor quality. In order to properly contain the scope of assessing COPQ, it needs to be treated as a strategic initiative like LSS, and staff must be trained accordingly. An effective way of positioning a COPQ initiative is to explicitly state that the focus will be on eliminating process and product waste through the entire value stream. Poka-Yoke is a key enabler for reduction of COPQ – cost of poor quality
A four-bucket framework is used in life sciences companies to improvise the work which impacts the quality cost. There is a need to view quality costs holistically to ensure that overall product quality is not impacted. The 1-10-100 rule, which has proven true for quality costs and states that $1 properly spent in defect prevention, is equal to $10 spent in product appraisal and $100 spent on product failures.
Tools such as factory automation and poka-yoke will enable companies to continue to drive down all quality-related costs. Life sciences must substantially drive down operational costs to have any hope of maintaining a level of financial success comparable to what they have experienced in the past.