The recent introduction of UDI requirements has persuaded many medical device companies to review their labeling capabilities. This, alongside other regulatory, technological and market drivers, has led to a growing number of companies issuing Requests for Proposals (RFPs) to labeling solution vendors to address this key operational activity. However, many organizations still overlook the strategic importance of labeling and underestimate its impact right across the supply chain. This manifests itself in RFPs that fail to capture the full scope of label lifecycle management and too often focus on addressing specific point-based problems, rather than driving long-term business value. The net result is that businesses do not leverage the true potential of integrated labeling solutions. Moreover, the inherent downstream benefits of efficiency savings, productivity gains and increased profitability are never realized. It’s a common problem – but it can easily be overcome. The most successful companies will be those that build new considerations into their RFP processes and, in so doing, engage potential partners to develop proposals that deliver long-term business value – and sustainable marital harmony.
Labeling is one of the most comprehensive and impactful processes in any manufacturing organization. A former CEO at one major multinational life science company once famously argued that when he examined the labeling processes in his business, he found they went through every department, bounced off the wall three times, and always came back to the center. It’s no exaggeration. Labeling is unquestionably one of the top mission-critical business systems in medical devices; label documentation not only drives patient safety, but without it, there can be no product, revenue or profit. Conversely, sub-optimal labeling processes drive inefficiency, increase the risk of product recall and, potentially, compromise patient care.
Despite this, many organizations consider labeling as a tactical activity and just one component of supply chain operations. It often sits in its own silo, powered by primitive labeling software that does exactly what it says on the tin: it produces labels. Consequently, when operations managers seek to adopt a new labeling approach, they commonly consider it a technology challenge and instruct the IT team to develop the RFP. The resulting document generally comprises a long, features-led list of IT requirements. This is the wrong start-point and invariably leads to suboptimal outcomes.
Many RFPs struggle to define what companies are looking for in a labeling solution. This requires taking an enterprise-level approach that establishes the impact a label lifecycle management system can have in terms of operational efficiency, risk management, regulatory compliance, consolidation and, in some cases, expansion.
The most effective approaches begin with high-level analysis of business objectives and the organizational drivers for change. By understanding what a business is trying to achieve, and developing a cross-functional appreciation of how labeling impacts almost every department, stakeholders can architect RFPs that align with strategic goals and reflect genuine business needs.
Most labeling RFPs emanate from a specific business pain; they could be recall-driven or in response to regulatory challenges or problems with throughput. But by focusing solely on specific pain-points, RFPs commonly end up being too narrow and functional and, as a consequence, fail to uncover areas where integrated systems can help drive business value.
The most proactive organizations have maintained vendor engagement that in recent years has disappeared from the RFP process. In an attempt to accelerate system selection and implementation, many companies forego crucial early dialogue with potential partners – and the opportunity to diagnose the problem and find the solution quietly slips through their grasp. The smartest companies have recognized the value of such engagement. Some encourage Six Sigma experts from their manufacturing environment to collaborate with vendors to share their strategic goals and identify the process inefficiencies that are barriers to progress. With tactical IT requirements a common and restrictive feature of the RFP process, companies would undoubtedly benefit from reinstating open workshops around business drivers that enable vendors to identify opportunities for added-value across the label lifecycle.
But this approach may not always be possible. As an alternative, organizations could consider expanding the scope and content of their RFPs. A good RFP will always challenge vendors with questions around expertise and approach – but the best will also include a balance of the hiring company’s background, drivers and context. It’s a standard marital approach; if a relationship is going to blossom, early and transparent disclosure of any skeletons in the closet is always a good idea. What challenges has the business historically faced? What is the catalyst for change – is it a corrective or preventative action? Does cause analysis reveal a quality issue, or is there a failure in the existing labeling system? By sharing those pain-points, vendors can customize their proposals to design services and solutions that meet known strategic needs. By concealing them, companies risk missing out on the holistic benefits of label lifecycle management and end up with implementations that meet narrow, point-based goals.
The ability to manage and inspect label documentation before it gets into the distribution cycle is another area that is rarely identified through the RFP process. Assuring data integrity is a key challenge that can have significant repercussions if it is not optimally addressed; the inherent cost of getting it wrong is a major business driver, with ramifications for productivity, profitability and patient safety. Yet surprisingly few companies are able to quantify the impact and cost of labeling errors. The ability to measure that cost, as well as be able to identify the root cause and solve it, is critical – but once again, RFPs often make no provision for these crucial metrics.
The true cost of making just one global change to a label can be astronomical. On average, a single change costs around $500,000. In one example, where a manufacturer fortunately identified a label error just before the goods had left the distribution center, the subsequent delays and revisions to the production process cost the business in excess of $20 million. This is a significant wake-up call, yet the need to assure full visibility and analytics right across the label lifecycle process is rarely a focus of standard RFPs.
Medical device companies can derive substantial efficiency gains on the manufacturing floor simply by harmonizing their labeling systems – but once again, this is often neglected in the RFP process. In a global industry, multinational organizations naturally have a high number of production and manufacturing facilities all over the world – and the benefits of labeling harmonization across these sites, not least in terms of productivity, resourcing and operational agility, are huge. Despite this, RFPs seldom share this information and provide a broader quantification of their organization and the entities impacted by labeling. By including more detailed information about the size, scale and nature of companies’ manufacturing facilities, vendors are better placed to propose label lifecycle management solutions that can drive – and quantify – significant business value. The harmonized approach promises major benefits in terms of containing costs and increasing productivity – all of which feed back into the strategic business objectives that should drive an RFP.
The industry’s current approach to RFPs for labeling solutions is full of potential hitches – but with some minor adjustments and more effective engagement, the process of getting hitched to the most appropriate partner can easily be improved. To progress, companies must move away from a focus on IT requirements and concentrate instead on business objectives as the driver in an RFP.
Label lifecycle management is a strategic consideration that has ramifications right across the supply chain. Finding the right partner is the key to long-term success – and it’s all about the proposal.