Cultural Excellence as the Foundation

For effectiveness of the quality system

Thomas Friedli,  Professor for Production Management, University of St.Gallen

Stephan Köhler,  Research Associate, University of St.Gallen

Paul Buess,  Research Associate, University of St.Gallen

In pharmaceutical companies, it is universally understood that a robust Pharmaceutical Quality System (PQS) provides key elements of assurance and oversight for pharmaceutical manufacturing and quality control laboratory processes. However, despite recent advances in the manufacturing sector, quality issues remain a frequent occurrence. The research shows that a high degree of PQS Effectiveness is accompanied with a high level of Cultural Excellence.

In pharmaceutical companies, it is universally understood that a robust Pharmaceutical Quality System (PQS) provides key elements of assurance and oversight for pharmaceutical manufacturing and quality control laboratory processes: It ensures that patients are provided with medications that are safe, effective, and reliably produced at a high level of quality. However, despite recent advances in the manufacturing sector, quality issues remain a frequent occurrence, and can result in recalls, withdrawals, or harm to patients (Woodcock & Wosinska, 2013; Yu & Kopcha, 2017). Additionally, quality issues have been linked to the rise in critical drug shortages (ISPE & PEW, 2017).

Pharmaceutical Production System Model

The St.Gallen Pharmaceutical Production System Model (PPSM) is a holistic model that illustrates the system - understanding of a Pharmaceutical Production System. The model was built as part of the quality metrics research funded by FDA to enable the University of St.Gallen to conduct a structured analysis how to achieve PQS Excellence.

From a scientific perspective, the model is inspired by two business excellence models. It follows the argumentation of the Sand Cone Model, which suggests that there is a hierarchy in a sequential order of the four competitive capabilities Quality, Dependability, Speed and Cost Efficiency (Ferdows & De Meyer, 1990). In addition, the PPSM follows the same approach as the European Foundation for Quality Management (EFQM) Model, which promotes the consideration of two key aspects when undertaking improvement programs, the Enablers (how) and the Results (what)(Figure1).

The PPSM allows to put the three metrics suggested in the revised FDA Quality Metrics Draft Guidance1 into the broader context of the PQS. This allows to analyse the relationships of the FDA proposed Quality metrics from an overall PQS perspective. The data behind the PPSM is based on the St.Gallen Operational Excellence (OPEX) database which currently encompasses 339 pharmaceutical manufacturing sites from over 124 different companies around the world. It combines Key Performance Indicators, Enablers, and Structural Factors of the given organisation.

According to Yu and Kopcha (2017) a critical enabler for product quality is the culture of quality within an organisation. This concurs with the understanding of the research team which is demonstrated by placing the category Cultural Excellence as the foundation of the PPSM. The system for implementing Corrective Actions and Preventive Actions (CAPA) is a fundamental part of any PQS. The level of effort and documentation should be proportionate to the level of risk. The CAPA system may be considered effective if it achieves the key objective to support the improvement of product and processes as well as enhance the understanding of product and processes. The CAPA Effectiveness is therefore an inevitable element of the PPSM.

According to the ICH Q 10 Guideline, the PQS extends to the control and review of the supplier. In order to assess the reliability of external suppliers the PPSM comprises the category Supplier Reliability covering the supplier’s ability to deliver products of high quality on-time. Operational Stability within the PPSM equates to capable and reliable processes and equipment. Recalling the Sand Cone Model, Operational Stability embodies the core capabilities of Quality and Dependability. The FDA proposed Quality Metric Lot Acceptance Rate can be located in this category. To have a comprehensive view of the production system and to cover the whole value chain from supply to release within a pharmaceutical company, Supplier Reliability and Operational Stability are complemented with the category Lab Quality & Robustness. This category is also seen as one pillar of the risk-based approach of FDA’s Quality Metrics Initiative (Yu, 2017). Lab Quality & Robustness comprises the FDA metric Invalidated OOS and additional indicators of the quality level and robustness of the lab operations.

The roof of the PPSM is built on the two-fold objective of effectiveness and efficiency of Operational Excellence (Friedli, Bellm, Werani, & Basu, 2013). The category PQS Effectiveness addresses the question of how well the PQS is working and if it achieves its objective. The FDA proposed Quality Metric Customer Complaint Rate is allocated to PQS Effectiveness. The second building block of the PPSM roof is PQS Efficiency. This category is considering how much resources have been deployed to reach the targeted level of effectiveness. Superior performance in both categories leads to PQS Excellence.

The Linkage between Quality Maturity and Quality Behaviour

In both domains, research and industry, Cultural Excellence is deemed to be the basis for PQS Effectiveness and it is recognised to play an important role beside Quality Metrics (Patel et al., 2015).

In the 2014 PDA Quality Culture study the association’s objective was to determine whether there is a relationship between Quality Maturity and Quality Behaviour (Patel et al., 2015). In addition the authors aimed to identify certain Quality Maturity attributes that may be used as surrogates to assess Quality Culture. Quality Behaviour summarises all quality related behaviours of an individual that can be observed in an organisation covering aspects such as commitment, engagement, transparency and active assistance from supervisors. Quality Maturity comprises implementable elements of the quality system such as methods and tools. Following the hypothesis of Patel et al. (2015) that Cultural Excellence is driven by Quality Behaviour and Quality Behaviour is driven by Quality Maturity the St.Gallen research team had the objective to analyse these relationships translating the PDA understanding of Quality Behaviour and
Maturity on data from the St.Gallen OPEX Benchmarking database.

For the analysis the Operational Excellence (OPEX) Enablers from the St.Gallen OPEX Benchmarking had to be assigned to either Quality Behaviour or Quality Maturity first. In total the Benchmarking comprises 114 Enablers covering different areas of OPEX, i.e. Total Productive Maintenance (TPM), Total Quality Management (TQM), Just-In-Time (JIT), Effective Management System (EMS) and Basic Elements. An Enabler can either be a tool, a methods or more general an effort that is spend to improve the respective area (e.g. TPM). Enablers therefore describe how to achieve Performance in the respective area. 26 of the OPEX Enablers were assigned to Quality Behaviour and 36 to Quality Maturity. 52 Enablers were not assigned as those do not have a direct link to any of the two categories.

In order to assess the linkage between Quality Maturity and Behaviour the research team used a scatter plot to identify whether a high Quality Maturity (x-axis) is accompanied with a high Quality Behaviour (y-axis). For both categories a score was calculated that represents the average of the implementation level of all attributes of the respective category.

The result of the St.Gallen research team confirms the previous findings of PDA. The statistical measure adjusted R2 of 0.66 means that based on the St.Gallen data 66 per cent of the variation of the Quality Behaviour Score can be explained with the Quality Maturity Score. This supports and enhances the finding of a PDA study in 2014 which showed a degree of determination of 34 per cent (Patel et al. 2015). Both analysis, the PDA study and the more recent work of the St.Gallen research team show that a high Quality Maturity is accompanied with a high degree of Quality Behaviour. The confirmation of the previous findings of PDA was the starting point for the St.Gallen research team to enhance the analysisin the field of Cultural Excellence.

Cultural excellence as the foundation for PQS effectiveness

The importance of Cultural Excellence and Quality Culture is widely discussed in the industry and generally understood on a qualitative basis (Barney, 1986; Digalwar & Sangwan, 2011; Jochimsen & Napier, 2013; Yu & Kopcha, 2017). The St.Gallen research team aimed to analyse if this qualitative understanding of the role of Cultural Excellence can be confirmed quantitatively.

The researcher’s objective was to identify whether there is a significant impact of Cultural Excellence on PQS Effectiveness of pharmaceutical manufacturing sites. To identify if there is a significant impact the overall sample of sites from the St.Gallen OPEX Benchmarking database was split into two peer-groups to perform a statistical t-Test. To identify sites for the respective peer-group the PQS Effectiveness surrogate Service Level Delivery (OTIF) was used. The first peer-group includes all PQS Effectiveness High Performer sites (10 per cent best performing sites for OTIF). The second peergroup included all PQS Effectiveness Low Performer (10 per cent worst performing sites for OTIF). Cultural Excellence in this analysis represents an aggregated score of the Quality
Behaviour Score, Quality Maturity Score and Engagement Metrics Score. The Quality Behaviour and Maturity Scores each represent an average of the implementation level of all attributes of the respective category. The Engagement Metrics Score represents the relative position of each site to the overall sample for this category based on the percentile rank calculation, enabling the research team to include Engagement Metrics with different scales (e.g. days and percentage).

Based on the t-Test the researchers were able to show that the PQS Effectiveness High Performer (peer-group 1) have a significantly higher implementation level of Cultural Excellence compared to the PQS Effectiveness Low Performer (peer-group 2) Further more, the research team identified that the relationship between Cultural Excellence and the two peer-groups does apply to each sub-category of Cultural Excellence as well. For Quality Maturity, Quality Behaviour and Engagement Metrics the PQS Effectiveness High Performer have a statistical significantly higher implementation level compared to the PQS Effectiveness Low Performer. The research shows that a high degree of PQS Effectiveness is accompanied with a high level of Cultural Excellence. Taking into account that there are other influencing factors to achieve a high PQS Effectiveness (e.g. Operational Stability and Supplier Reliability) the research finding still shows a significant relationship between the two categories of the PPSM. As a consequence, the widely discussed and understood importance of Cultural Excellence and Quality Culture can be confirmed with the data of the St.Gallen Operational Excellence Benchmarking database.

--Issue 28--

Author Bio

Thomas Friedli

Thomas Friedli is a Professor for Production Management at University of St.Gallen in Switzerland. His main research interests are in the fields of managing operational excellence, global production management and management of industrial services. He is a lecturer in the (E) MBA programs in St.Gallen, Fribourg and Salzburg. Hespent several weeks as Adjunct Associate Professor at the Purdue University in West Lafayette, USA. He is responsible for the St.Gallen OPEX Benchmarking in the Pharmaceutical Industry, the largest independent Benchmarking in this field.

Stephan Köhler

Stephan Köhler is a Research Associate at the University of St.Gallen, Switzerland. At the Institute of Technology Management in the division of Production Management he works in the Operational Excellence team with a special focus on the pharmaceutical industry. He graduated from RWTH Aachen University with a master’s degree in Industrial Engineering and Management. Currently he is doing his PhD at the University of St.Gallen with a focus on Operational Excellence in Quality Control Laboratories in the pharmaceutical industry.

Paul Buess

Paul Buess is a Research Associate at the Institute of Technology Management of the University of St.Gallen, Switzerland. He is part of the Operational Excellence team with a focus on the pharmaceutical industry and LEAN management. He holds a Master’s degree in Industrial Engineering and Management from the Karlsruhe Institute of Technology (KIT), Germany and AALTO University, Espoo, Finland. Currently he is doing his PhD at the University of St.Gallen with a focus on production and quality systems in the pharmaceutical industry.

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