More than 4 in 5 companies believe risk management is a key capability for managing complexity and adapting to changes in the market. Yet time and again, we see poor risk management making big headlines, from defective devices to counterfeit drugs to reputational damage due to poor communication strategies.
So what can companies do to prevent these problems and protect the long-term value of the company?
Let’s look at 6 common risk management gaps that life sciences companies should focus on.
1. Ineffective Supply Chain Management
The global contract manufacturing market is set to hit nearly $80 billion by 2019. With this growth comes significant increase in risks to companies who outsource manufacturing, given the fact that any problems will ultimately damage the brand itself and not the contract manufacturer.
Closing this gap calls for effective Supplier Management tools, giving you the ability to:
- Use supplier ratings and scorecards to benchmark contract manufacturers, incorporating risk assessment to pinpoint the most likely source of future problems.
- Assign corrective actions to external parties, making it easier to track resolution of issues while placing the onus on suppliers to make improvements.
- Quickly trace the source of problems originating outside the company, linking them to other quality functions like customer complaints and nonconformities.
2. Scattered Documents
From policy documents to product and part specifications, ineffective document control practices have the potential to wreak havoc on a company. Problems include:
- Receiving parts or products built to an out-of-date specification.
- Quality or safety incidents arising from lack of awareness or poor training.
- Scrambling during audits to come up with required process or specification documents.
It seems like one of the smaller details, but having a Document Control system integrated with your FDA compliance program is essential to keeping everything straight. Effective document control ensures you can do what you say, and say what you do.
3. Regulatory Compliance Gaps
Getting dinged with a warning letter or recall is the last thing any company needs, and many instances of problems are avoidable if you have the right tools in place.
A gap analysis can help you identify potential compliance issues, but this analysis is much more effective when paired with other areas of your process. Examples including linking individual requirements with existing controls or audit questions, also integrating risk assessment to prioritize handling of high-risk compliance gaps.
4. Reputational Risks
Reputation management is a top priority for many life sciences companies, and rightly so. Little more than a hot-tempered tweetstorm or careless internal email is enough to damage brand image, which is why it’s so important companies take strategic action to protect their reputation.
Key steps here include:
- Ensuring transparency in mergers and acquisitions.
- Creating a strategic plan for communicating with the public.
- Having recall practices in place before a problem occurs so you can act quickly.
- Integrating risk management throughout the product lifecycle.
5. Information Security Risks
It seems like not a day goes by without hearing about another cyberattack on a business. It’s not just picking up the pieces that’s such a problem for companies—it’s also the less tangible effects on company reputation.
Cybersecurity affects many areas of life sciences companies, from managing sensitive internal information to protecting the very function of medical devices themselves. Prevention is the first step, with many companies using tools like ISO 27001 for information security to address cybersecurity risks.
Step two is having a FDA Compliance System in place that allows you to react quickly in the event of a data breach, pulling together essential documentation while allowing you to execute changes fast.
6. Weak Risk Management Processes
Finally, one of the biggest gaps in life sciences companies today is the inefficiency of the risk management programs themselves. The problem is, many people mistakenly believe that risk assessment is the same thing as risk management. In fact, risk assessment is part of a larger closed-loop process that encompasses:
- Hazard identification: Companies should have a place to centralize all risk items for proactive tracking.
- Risk assessment: Your compliance system should allow you to perform a risk assessment at any step in your process.
- Control implementation: Engineering controls, policies and audit processes can all mitigate risk, but you need to be able to link those controls to individual risk items.
- Performance evaluation: All of the above is worthless if you’re not looking at the effectiveness of your work. Quantitative risk assessment can help you calculate residual risk and determine if further action is needed.
When you get down to it, risk management is central to every step in the medical device or pharmaceutical manufacturing process. From design to implementation, supplier management to post-market feedback, filling the gaps in risk management has the ability to significantly improve results. And in the meantime, it might just help you sleep a little better at night.