Practical Operational Solutions to an Impractical Regulatory Approach

A frustrated manager of a small distribution center calls late on a Friday afternoon.  He needs advice regarding how to avoid spending $400K per year in lost personnel time and potential sales opportunities on rectifying deficiencies that resulted from repeated regulatory audit performed by the parent company.  He contends – strongly – that the “deficiencies” identified are unreasonable and unfair. So what do we do?

The Practical Solutions Group, LLC offered to assess the company’s distribution operations and business challenges and 1) provide the distribution center with a list of practical regulatory and operational recommendations to avoid these significant financial losses in the future and 2) document the reasons why the “deficiencies” were unreasonable and unfair. He agreed.

It took less than one day at the site to identify the main reason(s) for the excessive number (51) of regulatory observations and suggest a road-map for permanently eliminating the root causes:

• Our client had the responsibility for maintaining quality operations but did not have the operational autonomy or authority to implement what was necessary to achieve this goal.
• The distribution center was required to operate under policies and procedures of its parent company, a medical device manufacturer.
• The most significant regulatory deficiencies (e.g., lack of complying with the FIFO system, lack of performing mock recall, lack of proper distribution system validation) were the direct result of the improper/ineffective policies and procedures carried out by the head office.

To remedy the issue, we began by educating the parent company upper management team regarding the regulatory dangers and operational inefficiencies of the established methodology. We also worked closely with the parent company’s QA to obtain their sign-off in advance of implementing any improvements at the distribution center. QA’s formal buy-in helped to assure that our client will not be unfairly cited in the future for regulations that do not exist and processes that do not apply.

Since that time, an audit performed by the parent company resulted in no observations. Our practical, targeted and insightful approach brought compliant and meaningful changes to both our client and its parent company. And saved our client $400K per year.