Enterprise Wide Quality Management Made Easy Enterprise Wide Quality Management System Enterprise Wide Quality Management Made Easy Tony Tan – American RENOLIT Corp LA Bob Herdoiza – CEBOS 1

Agenda Introduction Industry issues & challenges CEBOS overview Enterprise Wide Quality Management System Agenda Introduction Industry issues & challenges CEBOS overview Enterprise quality management Company Case study Integration Why quality Q & A

Industry Issues and Challenges Enterprise Wide Quality Management System Industry Issues and Challenges New product development Product quality concerns Product safety concerns Continuing pricing and margin pressures Demanding customer requirements Manufacturers Global consolidation and alliances New Product Development – innovation, new demand, rigorous testing, 510Ks, IDE, etc Product Quality – No. 1 concern – must be SAFE, must be EFFECTIVE Increasing Sophistication of Customers – knowledge is more available, people taking charge of their healthcare, forced to learn more about their treatment options in this day and age Evolving Reg Requirements: Top pressure is compliance, with regulations varying by country/region, product/type, classification etc. Continuing Pricing/Margin Pressures: Managed care/hmos forcing prices down, increased global competition Global Consolidation Intense shareholder pressures Customer compliance Regulatory compliance

Recalls Enterprise Wide Quality Management System Johnson & Johnson issued a massive recall Friday of over-the- counter drugs including Tylenol, Motrin and St. Joseph's aspirin because of a moldy smell that has made people sick. Jan 15, 2010

More Recalls Enterprise Wide Quality Management System Mattel Does Damage Control After New Recall Toyota Recall Aug 15, 2007 Jan 26, 2011 …a world-wide recall Aug. 1 of about 1.5 million Mattel toys believed to contain lead contamination, including items featuring such popular characters as Elmo and Big Bird. Toyota Motor Corp said it would recall more than 1.7 million vehicles worldwide, bringing total recalls to nearly 16 million since late 2009 and dealing a blow to its efforts to restore its reputation for quality.

Compliance Industry standards Regulatory TS 16949 ISO 9000 ISO 13485 Enterprise Wide Quality Management System Compliance Industry standards TS 16949 ISO 9000 ISO 13485 Regulatory FDA 21 CFR Part 210 & 211 FDA 21 CFR Part 820 FDA’s Quality System Inspection Technique (QSIT) FDA Bioterrorism Act of 2002 Hazard Analysis and Critical Control Point (HAACP) •21 CFR 820 –Quality System Regulations -21 CFR 820.50 –Purchasing controls -21 CFR 820.198 –Complaint files -21 CFR 820 has no references to customer •ISO 13485:2003 -Medical devices -Quality management systems -Requirements for regulatory purposes -7.2 Customer-related process -7.4 Purchasing -7.5 Production and service provision -8.2 Monitoring and Measurement -8.5 Improvement •Drug/Device or Biologic/Device Combination Products 21 CFR 210 & 211 – Drugs 21 CFR 600 - 680 – Biologics 13485 is in part designed to produce a management system that facilitates compliance to the requirements of customers and—preeminently—various global regulators. While being certified to 13485 does not fulfill the requirements of either the FDA or foreign regulators, the certification aligns an organization’s management system to the requirements of the FDA’s Quality System Regulation (QSR) requirements as well as many other regulatory requirements found throughout the world. Therefore, 13485 certification serves to create a management system that can be thought of as a framework on which to build compliance to various regulatory and customer 13485 removes 9001’s emphasis on continual improvement and customer satisfaction. In its place is an emphasis on meeting regulatory as well as customer requirements, risk management and maintaining effective processes, namely the processes specific to the safe design, manufacture and distribution of medical devices. Benefits of Dual Certification: 13485 & 9001 Medical device manufacturers can benefit from being both 9001 and 13485 certified. While such manufacturers are not required to have 9001 certification, it can bring further business benefits, because it focuses on business aspects that are good for all businesses—for example, the emphasis on customer satisfaction and continuous process improvement that a 13485 management system omits. Manufactures of medical devices also will need to acquire 9001 certification if they want to branch out to other industries, as 13485 certification will not be honored where 9001 is required.

Enterprise Wide Quality Management System Legislation U.S. Congress passed the Consumer Product Safety Commission Reform Act, H.R.4040 3rd party laboratory test to ensure safety standards Searchable database on reports of safety hazards

FDA Quality System Requirements Enterprise Wide Quality Management System FDA Quality System Requirements Corrective and preventative actions Design controls Production and process controls Management Material controls Equipment and facility controls personnel training and qualification; controlling the product design; controlling documentation; controlling purchasing; product identification and traceability at all stages of production; controlling and defining production and process; defining and controlling inspection, measuring and test equipment; validating processes; product acceptance; controlling nonconforming product; instituting corrective and preventive action when errors occur; labeling and packaging controls; handling, storage, distribution and installation; records; servicing; statistical techniques; Records, documents, change controls http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm126252.htm

CEBOS Overview Software company Seventeenth year Enterprise Wide Quality Management System CEBOS Overview Software company Seventeenth year Hundreds of deployments - thousands of users Currently supporting 12 languages Serve vertical markets of QAD Registered to ISO 9001:2008

CEBOS Overview Comply with quality standards (ISO, TS, AS, FDA, etc.) Enterprise Wide Quality Management System CEBOS Overview Comply with quality standards (ISO, TS, AS, FDA, etc.) Automate required business processes Integrate related quality processes and QAD

Enterprise Wide Quality Management System CEBOS’ MQ1

Enterprise Wide Quality Management System Integration

Enterprise Wide Quality Management System Why Important? “To achieve Best-in-Class performance, companies must… implement Quality Management Systems at an enterprise wide level…“ --Aberdeen Group August 2008

What is BIC? Aberdeen Completed Research on Best in Class Manufacturers Findings & Definition – What is Best in Class?: 99% products in compliance 98% complete and on-time shipments 98% first pass yield What are the Drivers to Being Best in Class? Ensure Customer Satisfaction Reduce Cost of Good & Bad Quality Increase Profitability and Competitive Advantage

What is BIC? What Were the Actions that Drove Achievement of Best in Class? Create Visibility of Quality Processes (Ops/Suppliers) Implement Business & QMS at an Enterprise Level Establish Integration from Business System and QMS What are the Enablers to Be Best in Class?

Driving Results Enables higher customer satisfaction Enterprise Wide Quality Management System Driving Results Enables higher customer satisfaction Reduces product planning time Reduces time to market Reduces non-conformances

Customer Case Study - American RENOLIT Enterprise Wide Quality Management System Customer Case Study - American RENOLIT Manufacturer of plastic films International company with over 4,000 employees spanning 30 manufacturing and sales locations globally Los Angeles site is one of the facilities that manufactures film for the medical industry Some applications of our film go into blood bags, IV, dialysis, nutritional, cardiovascular, biotech, collection and urological drain bags

Customer Case Study - Business Problem Enterprise Wide Quality Management System Customer Case Study - Business Problem Stand alone non-integrated systems Excel spreadsheets primary automation tool Unable to view trends across the organization Correct information was often difficult to locate User and IT management high Inconsistent processes / not standardized

Customer Case Study - Specific Areas Targeted Enterprise Wide Quality Management System Customer Case Study - Specific Areas Targeted Document control Corrective/preventive action (CAPA) management Employee training tracking Audit management Project management Shop floor inspection management APQP documentation management

Customer Case Study - Solution Enterprise Wide Quality Management System Customer Case Study - Solution CEBOS MQ1 software 13 modules highlighting: Documents Problem solver Audits Human resources Data collection Work manager APQP E-sync Integration from QAD to MQ1

Enterprise Wide Quality Management System MQ1 - Module Roll Outs Quality Management System - CEBOS MQ1 Licensed Modules Audits Customer, Process, Product, Safety Audit Customer & Supplier Mgmt Document Mgmt E-Sync Maintenance Problem Solver Gage Human Resources Tooling APQP – Advanced Product Quality Planning Control Plan (FMEA & PPAP) Process Planning & Control (Standard Conditions) Inspection Plan (QA & Mfg Test Plan) Data Collection Work Mgmt Completed Partial / In Process Concept & Development

Customer Case Study - Results Enterprise Wide Quality Management System Customer Case Study - Results Central data repository for all locations Improved data for business decisions Analysis capabilities across the organization Consistent / standardized processes Streamlined processes Flexible reporting and process configuration

Customer Case Study - Results Enterprise Wide Quality Management System Customer Case Study - Results Configured for simple for end users

Customer Case Study - Results Enterprise Wide Quality Management System Customer Case Study - Results

Customer Case Study – Lessons Learned Enterprise Wide Quality Management System Customer Case Study – Lessons Learned Document, Agree and Approve Processes Management Involvement and Commitment Defined Objectives Tied to Personnel Goals Upfront Focus on One Module at a Time Pilot Appoint a Passionate Champion Per Module Detailed Roll Out to End Users

QAD & QMS Integration Framework Enterprise Wide Quality Management System QAD & QMS Integration Framework

Enterprise Quality Mangement Systems QAD & MQ1 - Module Roll Outs Planning Workbenches: Master Scheduling Production Scheduling E-Sync ODBC QAD - Item Master QAD - Work Orders, Lot, Qty QAD - Inspection Plan MRP & CRP APQP Control Plan Process Control (std conditions) PBO Interfaces & Integration BOM, Blender Sheets Notebooks Data Collection PBO Integration Process Condition & Seimens PLCs QA Inspection Tablet PLCs, Barcoding Business Intelligence Suppliers Shipping Inventory Quality Assurance Manufacturing

Sample Integration Points Enterprise Wide Quality Management System Sample Integration Points Incoming Inspection: Bidirectional Transaction Data Upon purchase order receipt of an item that requires inspection in QAD a data collection event will be created in MQ1 with reference to the item number, lot and supplier. Upon completion of the data collection event the results will be updated in QAD by transferring the inventory to the appropriate location based on the results of the inspection. In-process Inspection: A data collection event will be created for a work order operation that is an inspection operation and the status is changed to “Q” (in Queue). Upon completion of the data collection event the results will be updated in QAD identifying the disposition.  If the product has passed inspection it will be moved to the next operation, if the product does not pass the update will be based on the status: rework or scrap along with the appropriate reason code. Problem Solver with Lot Inventory Data: If a problem (NCMR, CAPA, Customer Complaint) is generated in MQ1 and the inventory needs to be quarantined, the lot inventory data in QAD will be updated with the appropriate inventory status code.  If an inventory item is moved from inventory to a MRB location in QAD and the inventory status is not a quarantined status then an NCMR will be generated in MQ1.  Item number and lot number information will be passed to MQ1.

Sample Integration Points Enterprise Wide Quality Management System Sample Integration Points Problem Solver for Customer Complaints If an issue is created in Call Maintenance and the category is customer complaint then a CPR Type Customer Complaint will be created in MQ1. When the complaint is closed in MQ1 it will update the issue in QAD Call Maintenance. Training Record Interface: Transaction execution validation A verification from QAD will be performed when an operator logs into a job using labor feedback by work order, a check will be made into MQ1 for the employee’s training records to verify that the employee is current on the training for this operation for the product.  If the employee is current in the training they will be allowed to proceed with the transaction, if the employee is not current an error message will appear and the employee cannot continue. Calibration Record Interface: A verification from QAD will be performed when an operator logs into a job using labor feedback by work order and enters a machine, a check will be made into MQ1 for the machine/equipment to verify that the calibration is current.  If the equipment/machine is current in with calibration they will be allowed to proceed with the transaction, if the calibration is not current an error message will appear and the transaction cannot continue. Master Data: Unidirectional from QAD to MQ1 Items Suppliers Customers This data will be transferred from QAD to MQ1 using eSync.  QAD will be the system of record.

Next Steps Stop by the CEBOS Table for a demo Enterprise Wide Quality Management System Next Steps Stop by the CEBOS Table for a demo Review and download information on the QAD Life Sciences website http://www.qad.com/erp/Life-Sciences/

Enterprise Wide Quality Management System Questions & Answers Bob Herdoiza, CEBOS bob.herdoiza@cebos.com Tony Tan, Renolit tony.tan@renolit.com