Risk management methods and tools in the pharmaceutical and life sciences industries

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Understanding and implementing risk management methods and tools is crucial for the pharmaceutical and life sciences industries in view of the fact that errors in this area can lead to dangers for human life. Since any mistake in any chain of in this industry can lead to serious consequences; the FDA and other regulatory agencies have created a number of risk management methods and tools for these industries.

A few commonly used risk management methodsIn the pharmaceutical and life sciences area, a few commonly used risk management methods and tools for organizing data and using these to help in decision-making include the following:

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A few popular risk management methods and toolsIn the field of pharmaceuticals and life sciences, these can be said to be some of the more popularly used risk management methods and tools:

Failure Mode Effects Analysis (FMEA)FMEA is a popular one among the risk management methods and tools mainly because it provides a methodology for assessing a potential failure mode for the process that goes into the manufacturing of the pharma or life sciences product and helps to analyze their possible impact on the product’s ability to perform to its required standard.

risk-in-pharmaceutical-and-life-sciences-industriesIdentification and establishment of failure modes are taken as the basis for using risk reduction techniques for eliminating, containing, reducing or controlling the possible failures. Since FMEA depends on a deep understanding of the product and the process; its main steps include dissembling complex processes into simpler and comprehensible ones. For this reason, FMEA is considered a potent risk management method and tool.

Failure, Mode, Effects, and Criticality Analysis (FMECA)Extending the concept of FMEA a little farther, the Failure, Mode, Effects, and Criticality Analysis (FMECA) takes into account the added feature of the extent of gravity of the consequences of a fault or failure, along with the possibility of their occurrence, as well as the chance of their detection. While this is the slight extension that the FMECA brings to FMEA; it is similar to it in other respects, namely:

risk-in-pharmaceutical-and-life-sciences-industriesFMECA too, like FMEA, uses identification and establishment of the process specification to identify risks and failures

FMECA too uses the method of breaking down difficult processes to easier ones to enable better understanding of the failures and risks.

Fault Tree Analysis (FTA)Fault Tree Analysis is another of the risk management methods and tools. What this tool does is that it takes up a single fault at a time for analysis, but links the chains that cause the fault. This is why it gets its name, wherein the results of the analysis are represented in a shape of a tree, in which each level of fault is described with possibilities. A sharp and incisive analytical bent of mind is required to create the FTA.

Hazard Analysis and Critical Control Points (HACCP)HACCP is yet another important one among the risk management methods and tools. It takes a systematic and proactive approach in ensuring the following in a product:

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It is considered a comprehensive risk management method and tool because it addresses all the issues relating to risk management methods and tools, applying scientific principles and methods for carrying out the following:

risk-in-pharmaceutical-and-life-sciences-industriesControlling of the risk or the negative outcomes of hazard, which could be due to any of these:

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Supporting statistical tools
risk-in-pharmaceutical-and-life-sciences-industriesWhile all the risk management methods and tools described above are a snapshot of some of the major ones, a few supporting statistical tools, too, are used to engender quality risk management. These are some of them:

 

 

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What is Accounting Fraud and How to Prevent Financial Statement Fraud

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Key Takeaway: An understanding of what is accounting fraud and how to prevent financial statement fraud is an important lesson for managements across the world, in any kind of business. In the simplest terms, accounting fraud is the practice of manipulating accounting records so that the actual financial condition is hid from the investors, the public or the other stakeholders and a false picture, which shows the company to be in a falsely healthy condition, is presented in the books.

accounting-fraud-to-prevent-financial-statement-fraudFinancial management can go haywire if the proper steps for preventing accounting fraud are not taken. Companies need to have a solid understanding of how to prevent financial statement fraud, or else their hard work and effort go down the drain, and making up for lost financial gains becomes a herculean task.

Accounting fraud is perhaps as old as accounting itself. However, with the American corporate sector having committed financial misdoings of an unprecedented scale starting from about the late 1990’s, the need for an actual congressional legislation was deemed necessary to prevent the onslaught of these financial scandals, most of which were the result of accounting frauds carried out on the financial statements of the companies that carried out these scandals.

A long list of corporate frauds 
accounting-fraud-to-prevent-financial-statement-fraudManipulating the balance sheet has been at the core of most accounting frauds that shook the American corporate sector and culminated in the enactment of the Sarbanes Oxley Act:

  • The Waste Management scandal
  • Enron
  • WorldCom
  • Tyco
  • HealthSouth
  • Freddie Mac
  • AIG
  • Lehman Brothers
  • Bernie Madoff
  • Halliburton

Accountants can manipulate their financial statements and carry out a number of fraudulent activities that can be termed as accounting fraud. These are some of the practices that are common among accounting professionals who got caught by these famous scandals:

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Internal controlsInternal controls in the form of deep and thorough scrutiny of the accounts records is the surest means for ensuring that the financial statement fraud does not take place. Staying compliant with the provisions of the SOX Act is another step in the right direction. Many companies supplement these by putting sound investigational techniques in place.

accounting-fraud-to-prevent-financial-statement-fraudCompanies can keep many checks and controls in place in the form of internal controls. They can ensure that the financial statements are vetted at various levels, starting with the accounts clerk and going all the way to the CFO. Not all types of accounts may need intervention from the CFO, but those that don’t can be handled by those in Finance who report to the CFO.

Making accounts pass through more than one sourceCrosschecking or double-checking accounts is another means of preventing financial statement fraud. The company can make a rule by which financial statements such as purchase records get checked by more than one person, with the aim of putting curbs on passing bills. When bills have to go through more than one person or level, there is a good chance of immediately detecting a fraud or a potential one. These employees can collude and cause a fraud anyway, but this is comparatively difficult, as in theory and practice, everyone through whom the bills get passed has to be involved to commit the fraud.

AuditsAudits, both internal and external, are another means of preventing financial statement fraud. When audits are carried out internally and checked by an independent, outside agency; a check is put in place, making financial statement fraud that much more difficult to commit.

Whistleblowing 
accounting-fraud-to-prevent-financial-statement-fraudWhen organizations put a good whistleblower culture in place, it can be a very strong deterrent at preventing financial statement fraud. This is not the easiest of practices to implement, but is strong one when it is implemented well. Ensuring security and protections for the whistleblowers, plus fixing rewards for their act is a means for motivating employees to take part in whistleblowing. To prevent misuse, the management can also put a system in place where wrongly called out whistleblowing results in penalties.

 

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The role of packaging in food safety and security

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The role of packaging in food safety and security is paramount. Perhaps no other factor plays the role of packaging when it comes to ensuring food safety and security. The role of packaging in food safety and security can be understood at its barest from the fact that packaging saves the product from rotting, contamination and a host of other undesirable changes.

Food being a highly decomposable item; it is prone to many effects resulting from pests, microorganisms and other contaminants. It is here that the role of packaging in food safety and security comes into play. Proper packaging not only protects food from the influence of any of these; it also helps the food to retain its moisture, shape, substance and other important characteristics. The most important attribute of the food that packaging in food safety and security plays is in helping to preserve the nutritive value of the food item.

The role of packaging in food safety and security and its importance to the world
packaging-s-role-in-food-safety-and-securityFood is the most essential need for all animals, including man. In the developed world, there is such a surplus of food that much of its gets wasted. The role of packaging in food safety and security is in ensuring that this can be minimized to a great extent. If food is properly packaged, it is possible to extend its shelf life and have it consumed after a while, instead of altogether throwing it away.

On the other hand, the role of packaging in food safety and security is equally important in many other parts of the world, there is not enough food for millions of people. When food is packaged rightly, its use can be optimized. The developed world transports food in millions of tons to the developing world. The role of packaging in food safety and security is crucial in such operations, where the quality of the food can be retained.

The role of packaging in food safety and security in the globalized world
packaging-s-role-in-food-safety-and-securityWhen food that is prepared in one part of the world gets consumed in another; the role of packaging in food safety and security acquires vital importance. This is what is happening in today’s globalized world. Food companies have their operations in almost any part of the globe that makes economic sense for them. This food is not necessarily fully consumed in the part of the world in which it is produced. Rather, it reaches out to different parts of the world. This globalized system works in the food industry just like the way it works in a garment or an automobile business.

Key points
packaging-s-role-in-food-safety-and-securityCountries of the world follow many of these regulations and conventions in addition to the many of their own. The core concept behind these regulations is that food must be safe throughout the supply chain, from the proverbial “farm to fork”. Planners and thinkers around the world work in tandem to understand the food problems the world is facing and prioritize their tasks towards ensuring that a good part of the inequities get minimized, if not outright eliminated. In ensuring this, the role of packaging in food safety and security is primary.

 

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Environmental, Health and Safety (EHS) Management and Audit

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An environmental, health and safety (EHS) management and audit program is now a prerequisite for organizations in various kinds of business. Allied to the emergence of and developing along with the concepts of worker safety and corporate social responsibility; the environmental, health and safety audit is today a major component of an organization. Organizations that need visibility and are desirous of earning a good name should make the environmental, health and safety management and audit a part of their culture.

The practice of companies auditing their environmental, health and safety (EHS) began in the 1970’s, almost contemporaneously with the enactment of OSHA. Around that time, the environmental issue was gaining ground in the corporate circles of the West with the governments and other agencies pitching in with their efforts to create greater awareness of the impact of business activities on the environment. As a result, the thinking that the top management of an organization needs to be viewing this issue more seriously started to develop and got ingrained over the years.

Cannot be glossed over
environmental-health-and-safety-management-and-auditAs a result of various legislations on the issue of environmental safety; the role of the Board of Governors became central in ensuring this aspect of the business. Environmental health and safety was no longer something that needed to be administered superficially, but in formal and designated ways, more specifically in the form of an audit. In order to incentivize corporate entities to implement environmental health and safety (EHS) management and audit; the trend started moving towards making these activities carry value addition to the organization.

Environmental health and safety management and audit is now a more formalized activity that needs to be carried out in a proper, set and well-defined manner. The processes that go into the EHS management and audit are clearly laid out in the form of standards such as the ISO 14001 standard, which is essentially an Environmental Management System (EMS) audit. To strengthen and enrich the audit activity and round it better; a few related and parallel standards such as the relevant parts of the 9000 family of standards, which deals with quality management, and 18000 series audits can be carried out with ease to supplement the environmental, health and safety audit.

Role of environmental health and safety (EHS) management and audit
environmental-health-and-safety-management-and-auditEnvironmental health and safety (EHS) management and audit have now evolved into being a practice that is coupled with and fused into many business-related activities. The practice now is to make an environmental health and safety management and audit an inseparable part of the Quality Management System. Environmental health and safety (EHS) management and audit audits are now a sure means to ensure that the organization has a reputation for corporate social responsibility by implementing this audit.

Aspects of an environmental health and safety management and auditThe aim of environmental health and safety management and audit is to instill the EHS right from the top management down to the line level employee. A properly carried out EHS management and audit system should ideally take these factors into consideration:

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How to choose a supply chain management solution

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Any business that opts for a supply chain management solution has to have clarity on how to choose a supply chain management solution. This is because the supply chain management solution is expected to carry out a number of very important functions. Choosing the wrong or inappropriate one can backfire on the business and derail and impede, rather than ease its work.

Businesses have to take a few important factors into consideration when they have to choose a supply chain management solution. For the supply chain management solution to perform its function of facilitating the supply chain for the business, it needs to perform its functions smoothly without causing hiccups to the business. This is where the decision-making ability of the business owner comes into picture.

supply-chain-management-solutionSo, what factors need to be taken into consideration when a business has to choose a supply chain management solution? Try considering these:

1. Choose by industryThis is obviously a no brainer, but it is an important first consideration nevertheless in choosing a supply chain management solution. Many supply chain management solution providers sell the idea that these are one-size-fits-all solutions that work across a number of industries since the core functions are essentially the same.

This may be true to an extent, but while a number of functionalities are common across a few industries; it is important to get down to the one that is built for your business. A supply chain management solution that works best for retail, for example, may not be as effective for an automobile store. Getting down to the details and dissecting the functionality that the supply chain management solution performs for your particular industry is an important first step in choosing a supply chain management solution.

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2. Define your needThis is the next important consideration when choosing a supply chain management solution. A number of supply chain management solutions are available in the market. Choose the one that suits your need the best. In order to do this, the business has to define its need to the fullest extent. It could take a few factors such as this into consideration:

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3. Understand the integration function of the supply chain management solutionIntegration is, well, the very soul of a supply chain management solution. The business should have clarity on what functions need to be integrated into the supply chain management solution. The reason for which the integration function is built into a supply chain management solution is to facilitate synchronization of the whole chain. This makes it one of the core factors that determined how to choose a supply chain management solution.

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4. Insist on the visibility featureVisibility is a great means for the business to have control over its sales, inventory, logistics, and a host of other functions. The supply chain management solution has to offer visibility on all these functions.

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5. Customer relationship management (CRM)A supply chain management solution is incomplete if it does not come equipped with a strong CRM feature. The CRM is the determinant in helping to establish a good relationship with the customer. The CRM feature should enable the business to completely understand the nature of the orders and their status, plus, more importantly, help in customer query responses and other important customer-related features.

 

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The Challenges before the Supply Chain Management and Logistics Industry

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A look at the challenges before the supply chain management and logistics industry is instructive. Huge figures sit rather incongruously with the reality of the industry, which is that while from a universal point of view, the industry has been growing at a steady rate and is set to continue the upward trend; it has its own set of challenges and inequalities, depending on the market one is analyzing. The challenges before the supply chain management and logistics industry need to be looked at, if one were to analyze the supply chain management and logistics industry.

Let us start with a look at the size of the supply chain management and logistics industry.

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Impressive overall figuresThe supply chain management and logistics industry employs over six million workers of various cadres in the US alone, again a fair indication of its enormous size. The good news is that by 2018, the industry is expected to need nearly a million and a half jobs. What factors have pushed this industry into such growth figures?

From almost a decade, the supply chain management and logistics industry has been seeing new and rapid changes and developments. These developments have mostly been in high-specialty areas such as marketing, data analytics, management and human resources, are involved. The reason for which the industry is in need of such high specialization jobs is that technology has made such forays into the segment that models on which most supply chain-dependent businesses were built are no longer viable.

What are the challenges before the supply chain management and logistics industry?The challenges before the supply chain management and logistics industry are dispersed based on the market one is looking at. The major challenge for the mature markets such as the US and the other markets in the west is in finding new recruits despite its being an industry that is in need of workers. The main challenges before the supply chain management and logistics industry in advanced countries are:

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Challenges before the supply chain management and logistics industry in developing economiesOn the other hand, the problems of developing markets such India, where the retail industry is growing at a rapid pace, entertaining hopes of fueling the growth prospects of the supply chain and logistics industry, are of a different nature. In developing countries, despite the recent high rate of growth in this industry; the problems concern lack of good infrastructure, lack of governmental regulation for an industry that largely is seen as belonging to the unorganized sector, and challenges to warehousing, all of which are directly related to the supply chain and logistics industry.

supply-chain-management-and-logistics-challengesA country like India has a long way to go before it can build the kind of infrastructure of the kind seen in the developed countries. Although it has a huge network of railroads and roads; the quality is pathetically low, affecting the efficiency of the supply chain. Delivery gets affected in an environment of poor infrastructure and low implementation of technology, although India is relatively stronger in the latter area. Logistics and warehousing need to improve in a large measure if the demand for growth in this sector has to be matched by the requisite infrastructure.

Infrastructure is the very backbone of this industry, and this is one of the biggest areas of weaknesses in India. This places major handicaps and hurdles right at the very heart of the industry that is poised for huge growth. A number of steps need to be taken if the challenges before the supply chain management and logistics industry have to be overcome.

 

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Trends that will shape Supply Chain and Logistics in 2017

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Trends that will shape Supply Chain and Logistics in 2017 is an interesting topic to think about. Though most of the trends are a takeoff from the previous years, unless something really disrupting happens out of the blue at some point of time in the year; the signals are strong that the trends that emerged in the previous few years are set to solidify and get reinforced.

What are the trends that will shape supply chain and logistics in 2017?

For a sector that is dependent heavily on infrastructure for its working; there has been little of path breaking significance in terms of what has been added to the existing infrastructure in any country of significance in the world, at least not to the extent that it can impact the industry in a significant way. The Chinese hobbyhorse, the One Belt One Road (OBOR) initiative, is not slated for completion in this year. The completion of this grand project could spell a major change for the shape supply chain and logistics, but nothing of such drastic significance is set to take place in 2017.

trends-will-shape-supply-chain-and-logistics-2017In the other “happening” countries – for the supply chain and logistics industry that is – 2017 is not likely to see a signal shift. But the developments that have been happening over the past few years are likely to gather pace. Technology is one area in which the change is to be expected. While again, technology itself may not really be new till this point of time in this year; a few trends have been emerging, promising to make some impact on the shape supply chain and logistics industry in 2017.

Big Data as a driver of changeBig Data is the word on everyone’s lips. How can one expect an industry that is so completely data driven as logistics and supply chain to be insulated from its influence?

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Transition to m-commerceA notable development that is expected in the supply chain and logistics in 2017 is the evolution of ecommerce into m-commerce. This again, is nothing new or defining for 2017, but the year is likely to see a continuation of the trend set earlier.

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People all over the world are finding it much easier to shop with the help of their mobile devices, and are adapting to this medium, albeit at different levels and speed. The explosion in the number of smartphones being purchased globally has added impetus to m-commerce.

Try-ons as a new trendA new feature of online shopping is the try-on option that consumers are now being given. Online shoppers are given the option of choosing 4-5 varieties of their chosen product. All these pieces are delivered with the order, and the consumer can try out each of them and select the one that she thinks suits her best. The idea is to replicate the actual shopping to the extent possible.

trends-will-shape-supply-chain-and-logistics-2017This trend has its challenges, for sure, because the cost of making it work could be unimaginably high. As with any new trend, it is going to be some time before the economies of scale of such huge logistical operations start kicking in. Yet, this is a very tangible factor that is sure to count among the supply chain and logistics trends of 2017.

 

 

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