The second installment of this series explores how Operations interprets and implements company strategy while Quality Management Systems (QMS) monitors the processes and collects decision driving data.
A company’s strategic plan conceptualizes long-term goals as a clear strategy is an absolute necessity to a well-designed operations plan. Without this guidance, writing an operations plan is like trying to plan a vacation without knowing where you’re going! However, the strategy team’s concern is starting at point A with goal of ending at point Z; plotting the points between A to Z isn’t their objective. This is where Operational Planning comes into play. The Operational Planning team identifies and executes the how, when, and where of a company’s operations while constantly ensuring alignment with the Strategic Plan, budget, and timelines.
Given these objectives it is easy to see why industry awareness and being proactive is critical. Something as seemingly banal, at least in the cannabis industry, as a change to packaging requirements can cause disruption to an entire line’s budget, timeline, and process. Therefore, when unexpected events arise an operations plan must be able to adapt to industry changes. Additionally, to avoid a cumbersome plan, if a component of an operations plan doesn’t help achieve a specific strategic objective, eliminate it.
As discussed in the previous article, Good Manufacturing Processes (GMPs) are a vital component to Operational Planning. These practices help facilitate fluid manufacturing, proper data collection, and nimble response to industry disruptions. GMPs also serve to encourage discussion and documentation of how, when, and where an organization’s plan is executed and how the products are manufactured and distributed. GMPs fit nicely within operational execution as GMPs are tools to assist Operations achieve the strategic plan’s goals. Therefore, the looming threat of GMPs becoming an industry requirement shouldn’t cause alarm to unprepared cannabis companies, but be seen as an opportunity to adopt basic operational guidelines to protect the quality and integrity of their business.
In the interest of public safety, the Food & Drug Administration (FDA) has defined and enforced GMPs in several industry sectors with Pharmaceuticals, Medical Devices, Supplements, and Food sectors all subject to FDA regulations. Unfortunately, until cannabis is federally regulated the government will not prescribe GMPs for the cannabis industry. That notwithstanding, the basic premise of GMPs is to make products that are safe, unadulterated, and effective per product claims. GMPs such as document control, facility layout, and basic employee responsibilities are uniform across all regulated industries.
GMPs and QMS systems can also help companies be resilient in the face of regulatory changes. A current example playing out in the industry revolves around the MED’s recent rule changes. On July 1, 2018, amid concerns of cannabis products utilizing pharmaceutical delivery systems, the MED deemed a multitude of cannabis devices “non-conforming”. This forced manufacturers of nasal sprays, suppositories, and inhalers to halt production while retailers pulled these products from their shelves.
The future is still unclear for these products with the MED not planning to finalize rules revisions until January 2019. During this time of transition, from a strategic perspective, this disruption could drive a significant loss of revenue for processing operations and for retail stores. Leading up to the cut-off date, companies needed to evaluate the life cycle of their affected products, review past sales success, and estimate future sales potential to determine profitability before executing their response plan.
Throughout this process the operational planning team can analyze information generated by GMPs to determine an appropriate response to the disruption. Operations would have an incredibly challenging time realizing the strategic plan and responding to industry changes without the structure and data generated by GMPs. This is because GMPs encourage companies to be proactive as opposed to panicked and reactive amid changes.
How do these general GMPs specifically effect operational planning and execution? While GMPs do not play a role in the company’s strategic decisions; GMPs do provide instructions and resources to assist a company accomplish their strategic plan’s goals.
Let’s say a company is facing a buy/make decision. The company ultimately decides to buy raw materials for production rather make the materials in-house. GMPs did not determine the outcome of this decision, but once the decision was made GMPs are used to help qualify vendors and assure they meet the company’s quality standards. Likewise, GMPs do not play a role in plant capacity decisions but GMPs do affect operational planning via facilities layout, equipment selected for use, logging what/how a piece of equipment is used, and even detailing when preventative maintenance is performed.
How do GMPs and QMS work together to help Operations when an unfortunate event has occurred such as products with microbial contamination? As stated earlier, a component of a GMP/QMS environment is data collecting which becomes a vital component to operational planning if an unfortunate event arises, such as contamination. Here, the GMP data will help define root causes of the problem and assign corrective action to prevent reoccurrence. Interweaving GMPs into the operational plan is vital as recalls are as common in the cannabis industry as they are in the food industry. Edibles manufacturers are just as vulnerable to a listeria outbreak as Blue Bell Ice Cream was in 2015 when ceiling water contaminated products and in 2016 with the inclusion of an outside vendor’s listeria contaminated cookie dough. The take-away here is just having government mandated GMPs will not prevent disaster; an organization must actualize GMPs to minimize risk. Remember, GMP code only outlines the minimal requirements a company must meet to be deemed functional and safe so exceeding basic GMP requirements is advised.
Quality Management System (QMS)
Quality Management has several functions outside of utilizing GMPs to produce a product to specifications and industry compliance. Determining and monitoring risk to product quality, noting manufacturing variations, and product outcomes all fall within Quality Management’s purview. Quality Management Systems aim to, like all of the elements of the Organizational Process, provide consistency and clarity. In this case, the goal of a QMS is product and manufacturing consistency accompanied by clear documentation of manufacturing processes and outcomes.
Outside of maintaining manufacturing and product integrity, Quality Management Systems provide risk management, the process of identifying, analyzing, and prioritizing risks. Risk management answers the question: how dangerous is a risk and how likely is it to occur? Risk management also includes plans to manage disruptive events. These plans determine how a company will appropriate resources to minimize, track, and control these events. This may be a relatively new perspective for cannabis businesses, where they must weigh potential financial losses against non-compliance when determining the likelihood of a risk occurring. But, as seen throughout this series, a safeguard against a turbulent industry are well enacted GMPs. A company is better protected from industry disruptions if it is already operating at the same or similar level of compliance as their industry peers in Food and Pharmaceuticals. Risk management is not just about identifying potential problems, risk management identifies opportunities, as well. For example, within the process of identifying risks a company may discover methods to make manufacturing leaner.
Operational planning, GMPs, and Quality Management Systems equip a company with tools for success but without an educated, trained, and engaged team all could be for naught.
In the final installment, we will discuss the complexities of Change Management and its effect on a company’s most valuable resource, its employees.