Management Control

The Medical Device Industry is currently operating within an era of unprecedented change.

World-wide regulatory requirements are fast becoming harmonized and focused upon

providing improved risk-based and patient centric outcomes. Change is good. However, during

this transition company leaders will continue to face the ongoing challenge of satisfying the

needs of both internal and external stakeholders. More so now than ever before, the Quality

Management System (QMS) must ensure the capability of the organization to reach high levels

of compliance, quality and performance results. 

Amidst change, there also exists opportunity. Opportunity to transform the QMS into a system

that truly ensures extraordinary performance and provides business value in the form of a

return on investment (ROI) to lower the cost of poor quality (COPQ), which can be as high as

10-30% of sales. Additionally, product quality issues carry a significant impact on sales with an

estimated average of 16% loss in share price. An FDA Warning Letter brings with it significant

remediation costs up to 5% of sales and on average an additional 10% loss in share price.

Targeted improvements in the reduction of COPQ can result in an increase in revenue and

improved customer satisfaction. The improvement of the QMS, done strategically, is an ROI

opportunity. 

Management control requires leadership to have the power to influence or direct the behavior

or the course of events of the Enterprise. COPQ is targeted, improvement activity is well

managed and improvement for ROI is the norm. What exactly is it that provides the power to

influence or direct the behavior or the course of events of the Enterprise? Information.

Without being fully informed about operational constraints, how can leaders appropriately

influence and direct improvement initiatives that will make a difference in operational

performance?

The quality of the products an organization provides to the market is a ‘reflection’ of the quality

of operations. The quality of operations is a ‘reflection’ of the quality of the Quality

Management System (QMS). When operating in a regulated environment, compliance is

certainly required, however it is only one dimension of quality. Each process within a QMS

must be designed and defined to be capable of being executed such that it is compliant to

applicable regulation and standards, effective in obtaining results, and efficient in operational

execution.