Quality, Cost, and Speed: Can There Be a Balanced Decision?

Great companies should have an advocate for each

Published: Monday, August 8, 2011 - 12:20

The truism, “Quality, cost, and speed—pick two,” was often quoted throughout my career: meaning a production company could not achieve all three ideals and therefore must choose which two out of three ideals to concentrate on;
• Sacrifice quality with low cost and high speed
• Sacrifice cost with high quality and high speed
• Sacrifice speed with high quality and low cost

Does there always have to be a loser? Unfortunately, it seems to work out that way in practice.

On July 27, 2011, a special committee of Johnson & Johnson (J&J) board members issued a report in response to investor lawsuits. It cited “an adversarial relationship” between quality and production, and “an emphasis on production volume” over compliance. The committee concluded that the consumer division at J&J “should have paid more attention” to quality issues and “exercised more management oversight.”

But here’s the real kick in the pants: The members of this J&J blue-ribbon committee were quick to take themselves off the hook by saying (I’m paraphrasing): “Nobody on the J&J board told McNeil that quality should be sacrificed.”

Nobody in his right mind ever gives a direct order to ignore quality. Pressure comes in much more subtle form in our industry, usually under the guise of “restructuring,” “lean,” and “quick business acquisition integration” programs that are directed totally at cost reduction. These are company programs that line management is rewarded to deliver.

Someone needs to ask the J&J board of directors, “Which consulting firm gave that advice, and who at J&J approved the 35-percent corporate quality and compliance staff cuts in 2007?”

Nobody told the J&J board there was a problem. Rarely is the person appreciated who tells the emperor that he’s naked. People who do this are characterized as troublemakers and nonteam players. They are the ones who are the obstacles to getting “drugs to our patients.” Fear of unemployment fosters a “don’t make waves” culture that is endemic. 

Here’s where the quality assurance function must rise to the occasion and make objective data the indisputable target, not the messenger. That is, unless they’ve also drunk the corporate Kool-Aid.

The J&J board acted aggressively when they found out about the problem. Isn’t this always the case? The Sarbanes-Oxley Act of 2002 was to have ushered in an era of corporate responsibility where company boards were to proactively and independently keep an eye on the legal and regulatory matters that affect the stockholders. Somewhere along the line the practice became limited to financial reporting—not compliance to Current Good Manufacturing Practices (cGMP).

However, all Food and Drug Administration (FDA) Consent Decrees of Permanent injunction are accompanied by stockholder lawsuits. So, you would think cGMP compliance would be on the fiduciary radar also.

What about quality, cost, and speed? No doubt about it. These dimensions are truly interdependent. But great companies should be able to have honest and frank discussions about daily decisions along these three dimensions. There should be an advocate for each—quality, cost, speed—with an equal voice that is encouraged, respected, and rewarded. This is where balance is found.

Troubles begin when, for whatever reason, any one of these voices is stifled or when any one of these voices becomes more powerful than the others.

About The Author

The QA Pharm

The QA Pharm is a service of John Snyder & Co. Inc., provider of consulting services to FDA-regulated companies to build quality management systems and develop corrective actions that address regulatory compliance observations and communication strategies to protect against enforcement action. John E. Snyder worked at the lab bench, on the management board, and as an observer of the pharmaceutical industry for more than 30 years. His posts on The QA Pharm blog are straight talk about the challenges faced by company management and internal quality professionals. Synder is the author of Murder for Diversion (Jacob Blake Pharma Mystery Series Book 1).