Quality 4.0 in Life Sciences: Selecting Technology for Competitive Advantage

It’s time to learn from innovators

Published: Friday, November 9, 2018 - 13:03

What a difference a year and a half make. In mid-2017, LNS Research coined the term “Quality 4.0” and published definitive research on the topic. At that time, an early but large group of manufacturers started to make Quality 4.0 one of their top digital transformation initiatives. This continues to accelerate, and today large groups of manufacturers are investigating Quality 4.0 and deploying pilots. While some used that time to consider the implications of the definitive research, most are eager to forge ahead. The market now seeks guidance on selecting use cases and technology at scale. (If you’re still unsure what Quality 4.0 is, read the definitive ebook.)

The market has matured

Today’s increasing adoption comes years after Quality 4.0 pioneers, who are now on their second or third generation of Quality 4.0. It has been fascinating to witness the market following an adoption paradigm similar to that outlined by Geoffrey Moore in his acclaimed book, Crossing the Chasm (HarperBusiness, 2006). In it, Moore used a normal distribution to characterize market adoption of technology and described the first phase as “innovators,” which he projected to be 2.5 percent of the market. The second phase he labeled “early adopters” and accounted for 13.5 percent of the market. Using his terminology, we are currently in the early adopter phase of Quality 4.0.

Quality 4.0 statistics align well to Moore’s distribution: LNS Research finds that 60 percent of companies are now pursuing an industrial transformation initiative, often referred to as Industry 4.0, smart manufacturing, digital transformation, or the industrial internet of things (IIoT). Of this 60 percent, 23 percent are focused on Quality 4.0, or 13.8 percent of the total market, similar to the 16 percent indicated by Moore. The overall market has matured, and now needs guidance on how to adopt technology for competitive advantage.

Trial and success

As we might guess, Quality 4.0 innovators experienced successes and setbacks in the transformational journey. Although LNS has been fortunate to work with many innovators and early adopters that are experiencing significant Quality 4.0 successes, the broad market has not been so fortunate with digital transformation.

To a certain extent, this is to be expected. Early mistakes and course corrections are inherent to innovating; it’s trying something that hasn’t been done in the past.

However, the market doesn’t need to repeat the same mistakes indefinitely. It’s critical for the next wave of manufacturers to learn from early mistakes and identify tried-and-true case studies as their launch point for Quality 4.0.

Pilot purgatory

One issue that the market is broadly experiencing is “pilot purgatory.” Digital transformation is being adopted by most as a pilot—narrow scope or single-site pilots that are essentially a trial run of digital transformation. Given digital technologies’ promise of easy connectivity and deep insights, plus the potential risk, effort, and internal disruption of any new technology endeavor, a pilot can indeed make sense. A pilot limits the downside while quickly delivering value within a narrow scope.

Life sciences: Frontrunner in adoption

The life sciences sector is disproportionately engaged in Quality 4.0 innovation, which makes the pharmaceutical, medical devices, and biotech industries particularly relevant. Life sciences manufacturers were early to recognize the importance of having senior leadership responsible for Quality 4.0, to ensure that it’s ingrained across the organization. Life sciences firms were among the first to appoint digital quality officers, where they continue to be the most prevalent. It’s a valuable role, helping the organization rethink existing operational excellence and leading transformation.

Life sciences organizations are deploying Quality 4.0 use cases across the value chain, including product development, connected labs, manufacturing operations, logistics, service, and adverse event monitoring. There is also a focus on regulatory compliance. The FDA’s increasing openness to real-world data allows manufacturers to derive new value from simulations and digital patient data. This approach reduces time to market, increases quality and efficiency, and ultimately improves patient outcomes.

Of course, technology alone doesn’t produce these outcomes. Companies must rethink operational paradigms and, more important, understand the value of existing and potential new insights to deliver competitive advantage.

Unfortunately, LNS statistics indicate that the average technology selection project lasts 15 months. Furthermore, few quality technology selection projects include team members from across the value chain, putting the company at high risk of creating new digital silos.

Takeaway: Learn from innovators

The market at large can learn a lot from innovators. Many pilots are stalling because they didn’t drive value, didn’t achieve adoption, or never scaled past pilot scope. LNS Research recommends that manufacturers take steps to avoid or overcome pilots that stall:
• Align Quality 4.0 efforts with corporate strategic objectives and thus desired corporate outcomes. Avoid shiny objects and focus on value.
• Realize that duplicating existing processes, culture, leadership, and collaboration with new technology will fail. Technology adoption, particularly of Quality 4.0 and other digital tech, should transform, create innovation, solve longstanding challenges, and help the organization rethink the current ecosystem.
• Avoid creating digital silos. Integrate Quality 4.0 work with broader digital transformation initiatives.
• Think organizationally. Does your company have multiple sites? Who needs to be included from these sites to gain buy-in, and who needs to be included across the value chain—e.g., research and development, procurement, supplier management, operations, service?
• Sell to top management. Fortunately, initiatives like this are often approved or instigated at the board level, with the direct support of the CEO. In response, cross-functional teams identify gaps, risks, and opportunities, and prioritize projects to align with target improvements; many have a pilot program in place with a detailed business case.

About The Author

Dan Jacob

Dan Jacob is a research analyst at LNS Research primarily focused on the enterprise quality management systems (EQMS) practice. Jacob has more than 20 years of experience in quality, reliability, risk, and safety across several industries, primarily automotive, aerospace and defense, high tech and electronics, and medical devices. Jacob also operated his own firm providing engineering consulting to the medical devices and metals industries. Jacob graduated Magna Cum Laude from the University of Pittsburgh with a bachelor’s degree in mechanical engineering.