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Products & Services Quality, Compliance and Regulatory Assuring Quality Programs

Report Summary: Benchmarking Medical Device Quality 2014-15: Managing Cost While Ensuring Quality & Safety

ID: POP-257A

Pages: 16

Published: Pre-2019

Delivery Format: Online


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Medical device and diagnostics companies devote a significant amount of resources to ensure their products meet the highest quality standards at every stage of the product lifecycle, from R&D and product development through manufacturing, sale, and post-market activity.

Facing tight budgets and increasing regulations, Quality leaders walk a tight rope in balancing Quality and safety while managing costs and assessing risk. Consequently, quality leaders are gearing to shift resources, automate and outsource activities, develop and retain key talent, and build business plans that justify their budgets. It is also important for them to identify and standardize the best path for CAPA processes to evaluate and investigate deviations successfully.

Best Practices, LLC undertook this study to explore how leading medical device companies are defining and allocating Quality spend, identifying factors that impact spending levels, and investing in future mission-critical Quality activities. Research findings provide evidence-based benchmarks for Quality spending, staffing, change request levels, outsourcing, software quality, inspections, lab testing, complaint management, trend insights and more.

Industries Profiled:
Medical Device; Pharmaceutical; Health Care

Companies Profiled:
3M Pharmaceuticals; DePuy Synthes; Baxter Healthcare; Atri Cure; Beckman Coulter; BMC Medical; Becton Dickinson; Bio Tek; Boston Scientific; Cook Medical; Covidien; Endologix; Edwards Lifesciences; Helmer Scientific; Ethicon; GE Healthcare; Medtronic; BARD; Haemonetics Corporation; Invacare Corporation; Lake Region Medical

Study Snapshot

Best Practices, LLC engaged engaged 21 executives from leading medical device organizations. In addition, research analysts conducted several brief interviews to verify quantitative and qualitative data.Data is charted throughout this report for the “Total Benchmark Class” as well as for the “Large Company Segment,” which includes 11 companies with medical device revenues above $2 billion (US).

Key Findings

Quality Spend/2014 Revenue: On average, participating companies spent about 3.0% of 2014 revenue on the Quality function. For large companies, the average was 2.12%, with a high of 4.24%.

Resource Allocation Trend: Nearly half the benchmarked companies expect a rise in budget allocation for Product Support activities within the next two years, but most expect flat or decreasing spend for other activity channels. Non-Conforming activity spend is expected to decline at 36% of companies.

Future Quality Staffing Trends: In the next 24 months, 37% of benchmark participants expect to see reductions in the number of Quality FTEs, and an equal number expect staffing levels to remain flat. Just over one-quarter expect to see any increase. Among large companies, 55% expect to lose staff and none expects an increase.

Compliance Leads Top Challenges: The benchmark class identified regulatory issues or compliance (24%), operations/processes/structures (22%), and talent management issues (18%) as the top three types of industry challenges facing them in the coming 12 to 24 months.

Table of Contents

I. Executive Summary Pgs. 3-14
• Research Overview Pg. 4
• Participating Companies Pg. 5
• Key Findings & Insights Pg. 6
II. Quality Spend Levels Pgs. 15-24
III. Future Quality Spend Drivers & Normalizers Pgs. 25-34
IV. Acquisitions & Quality Function Integration Pgs. 35-42
V. Top Challenge Areas for Quality Organizations Pgs. 43-45
VI. Quality Staffing Levels Pgs. 46-57
VII. Budget Allocation for Key Quality Activities Pgs. 58-62
VIII. Quality Activity Areas Pgs. 63-132
IX. Compliance Activities Pg. 64
X. Inspection & Production Pg. 74
XI. Non-Conforming Pg. 93
XII. Product Support Pg. 112
XIII. Additional Quality Activities Pg. 126
XIV. Quality Metrics, Improvement Approaches & Controls Pgs. 133-138
XV. Key Demographics of Participating Companies Pgs. 139-154
XVI. Appendix Pgs. 155-156

List of Charts & Exhibits

Quality Spend as a Percentage of Revenue
Top Factors Driving Quality Cost Changes
Top Metrics Used to Monitor & Manage Quality Risks Across Distribution & Production
Total spend of Quality function in 2014 for medical devices and related services
Quality Cost over Revenues
Quality Spend Reported as Gross or Net
Change in Level of Quality Spend over the past 3 years (2012-2014)
Forces or issues driving the percentage change of participants’ Quality spend over the past 3 years
Administrative Charges Included in Quality Spend
Quality Spend Inclusions
Complexity Factors Increasing Quality Spend within the next 12 to 24 months
Process Management Factors Increasing Quality Spend within the next 12 to 24 months
Regulatory Factors Increasing Quality Spend within the next 12 to 24 months
Current Regulatory Challenges for Participants
Simplification Factors Driving Decreased Quality Support Spend within the next 12 to 24 months
Continuous Improvement Factors Driving Decreased Quality Support Spend within the next 12 to 24 months
Regulatory Factors Driving Decreased Quality Support Spend within the next 12 to 24 months
Medical Device Acquisitions and Profitability since 2012
Acquisitions with Realizable Revenue over Companies Acquired - Shown As %
Quality Integration for Acquired Sites
Current & Future Quality System Models
Number of standard operating procedures and work instructions for the Quality organization at each level
Effectiveness of Approaches for Supporting M&A Integration
Key Industry Challenges/critical issues that Quality organizations will have to contend with in the next 12 to 24 months to achieve high performance
Medical Device Quality Staffing - Total number of FTEs in Quality Function at the end of 2014
Past Trend in Number of FTEs in Quality (2012-2014)
Quality Function Staffing Trends
Quality Staffing Over Med Device Employees - Shown As %
Span of Control at Each Job Level
Quality Cost per FTE
Quality Staffing over UPNs/SKUs
Active Clinical Quality Staff FTEs to Clinical Trials
Total number of clinical quality assurance FTEs (Full Time Employee equivalents) currently employed by benchmark participants
Ratio of Clinical Quality Staff to Total Clinical Headcount
Allocation of Quality Spend by Channel
Resource Allocation Trend
Scope Of Responsibility of the Quality Function
Managing QA Labor Costs Across Global Markets: Compliance
Number of Objects Reviewed by Quality Function
% Documents Changed/Updated in 2014
Change Requests Per $100 Million In Revenue
Managing QA Labor Costs Across Global Markets: Inspection/production
Location of Toxicology/Biocompatibility Internal Inspections
Active Clinical Trials to Internal Clinical Trial Audits Ratio
Top Metrics Used to Monitor and Manage Quality-Impacting Distribution and Production Risks
Direct Material Suppliers Per $100 Million In Revenue
% Incoming Batches Requiring Detailed Inspections
Production Floor Lab Testing
Metrics Used to Assess Supply Chain Risk
Effectiveness of Production Risk Metrics
Document Types Reviewed by Software Quality Assurance
Groups Owning Software Validation Activity
Managing QA Labor Costs Across Global Markets: Non-conforming Activities
Field Defect Density
Number of Open CAPAs per $100M in Revenues
Number of Open Non-conforming Events Per $100 Million Revenues
CAPA Cycle Times
Complaints Per $100 Million In Revenue
Total number of inbound calls handled by self-service, automated or recorded systems
Use of Virtual Inspection for Complaint Resolution
Field Actions & Evaluations experienced in 2014
Field Actions to Field Evaluations
Defect Removal Rate
Managing QA Labor Costs Across Global Markets: Product Support Activities
Design Control Budget Management
Risk Management/Design Control Process Measurement
Impact of Design Control Metrics on Quality
Level of Integration of Risk Management/Design Control & New Product Development Systems
Managing QA Labor Costs Across Global Markets: Other Activities
Benchmark Participant’s 2014 annual revenue from medical device sales and related services
Total Number of FTEs engaged with medical device operations/businesses at benchmarked companies
Total number of UPNs (Unique Product Numbers) or SKUs (Stock-keeping units) of sellable product codes distributed by benchmark participants related to their medical device or diagnostics business
Number of company-run discrete manufacturing plants and distribution centers
Sales Regions
Maturity of Cost of Quality Function
Manufacturing Plants Per $100 Million In Revenue
Distribution Centers Per $100 Million In Revenue
Number of Active Clinical Trials
Number of Audits at Investigational Clinical Sites
UPNs/SKUs per $100 Million in Revenue
Approaches for Developing Fast Response Quality Systems
Quality Control Approaches
KPIs Included on Quality Performance Dashboards
Effectiveness of Distribution Risk Metrics
Integration of Clinical Quality into Core Quality Function
Statistical Confidence Level in Process Validation per Product Class
Extent Post Market Data Is Incorporated into New Product Development (NPD)
Parameters that spotlight select factors most significantly driving quality performance in listed systems