Integrating ERP and Quality Management in the Cloud

To compete, grow, and innovate, manufacturers should adopt a cloud-based enterprise resource planning system that integrates quality management functionality.

October 9, 2014

7 Min Read
Integrating ERP and Quality Management in the Cloud

Bart Reitter

Manufacturers of medical devices must consistently document conformance with strict global quality regulations. In order to comply, companies often utilize stringent and costly manual procedures that cause delays in product rollouts, impede innovation, and hinder business processes.

To develop an efficient, enterprise-wide quality culture while continuing to focus on growth, medical device manufacturers must choose enterprise resource planning (ERP) solutions with built-in quality management capabilities. Furthermore, by choosing a cloud-based ERP solution that integrates quality management functionality and current good manufacturing practices (CGMP), medical device companies can preserve capital, reduce costs, focus on innovation, and more effectively comply with global regulations.

Cost vs. Risk

Cost and risk are two critical components that medical device companies must keep in mind as they develop their business processes and procedures. Device companies must balance the costs associated with compliance measures against the potential risks (and costs) of nonconformance.

Compliance results in both preventive and appraisal costs. The former include quality planning, training, statistical process control, and system development and management, while the latter include acceptance testing, inspections, and audits. Also included in these costs are process development and design, as well as investment in quality-related information technologies. Nonconformance, on the other hand, can also be costly. It can result in defects that generate scrap and rework or defects that affect patients, leading to potential warranty claims or harm to a company’s reputation.

Companies use a risk-based approach to determine how much money and effort they should spend on quality activities. This balancing act is illustrated in Figure 1. Companies that do not spend very much time and money on quality efforts face huge risks, while those that do so decrease risks until increased spending yields a diminishing return on compliance. This tipping point is based on a risk-based approach and is different for each company. This difference, in turn, depends on such factors as risk tolerance, a company’s regulatory compliance history, or even process improvements that may yield additional quality benefits or offer competitive advantages.

Medical device companies must maintain a quality management system (QMS) based on 21 CFR Part 820 or ISO 13485. The QMS serves as the organization and collection of processes for achieving a company’s quality policies and objectives. All medical device organizations have a QMS in place that consists of the company’s organizational structure, plans, procedures, processes, and resources, including people and funding. It can be administered using manual processes, enterprise quality management software (EQMS), or a hybrid approach. The critical success factor is the degree to which companies can integrate these quality processes into their core business functions.

By placing quality at the core of their business processes, medical device companies can shift the cost-versus-risk curve to reduce incremental costs for the same level of risks. As shown in Figure 2, companies can increase efficiency and lower their costs of compliance for the same risk by integrating ERP and EQMS functionality and by embedding quality procedures into their business and manufacturing processes.

Integrating and automating these processes helps drive a quality culture throughout the organization. And by choosing a cloud-based solution that integrates quality into core business functions, medical device companies can derive additional benefit by addressing the needs of their businesses faster and more easily. Proven cloud-based ERP solutions are easy to learn, use, and deploy. Affordable, they have predictable operating costs and scale easily to accommodate new users or acquisitions. In addition, they provide a high level of availability and meet the highest standards of operational control and data security.

Ensuring Quality in the Cloud

Recent trends show that government regulators are viewing quality as more than a strict regulatory compliance issue by promoting the advantages of a company’s operational performance. For example, in developing their Case for Quality initiative, FDA completed an analysis showing that medical device companies that managed risk by driving quality across the organization tended to be more productive, with fewer complaints and investigations per lot. These organizations also had smaller quality units with lower quality-related costs than their competitors. The evidence is clear: Quality is no longer a burden associated with higher cost. Quality can provide a competitive advantage to medical device companies.

Driving enterprise-wide quality throughout a medical device company requires the integration of quality and production processes. The ideal method for achieving this goal is to deploy a cloud-based ERP solution that integrates EQMS capabilities.

Some medical device companies cringe at the mention of the cloud. Cloud-based measures, they maintain, are often synonymous with a lack of control and security that is intolerable for a highly regulated medical device manufacturer. However, more and more companies are realizing the benefits of cloud-based ERP systems and making the switch.

Cloud-based solutions mitigate the variability often associated with on-premise deployments. Offering predictable security and reliability to help minimize risk, they are also simpler and quicker than typical on-premise deployments. At the same time, they deliver the same globally accessible, full-strength ERP and EQMS capabilities as on-premise solutions, and they reduce the challenge of maintaining skills to support applications.

Because cloud-based systems entail predictable costs, they are easy to budget and flexible enough to adjust to a device manufacturer’s needs if user requirements change. Most importantly, proven cloud solutions guarantee 99.5% system availability and are backed by data centers that deliver better uptime performance than on premise solutions. Moreover, they are certified to the highest international standards, enabling IT staffs to focus on business performance, not software.

Integration of a cloud-based EQMS and ERP system can yield a host of benefits:

  • Overall improvement in quality and compliance drives the ability to standardize processes and workflows. Integrating automated quality workflows into business processes results in consistently applied quality processes across the enterprise.

  • Automatic collection of quality data provides visibility across an enterprise’s value chain. Analysis of this information allows companies to gain insights into trends and risks, enabling them to drive continuous improvements by modeling the impact of these trends and risks on the enterprise.

  • The ability to quickly foster and implement best practices by automating quality processes leads to product improvements. Companies can easily build compliance into their processes and then rapidly implement them across the enterprise.

  • Streamlining workflows and synchronizing them between quality and manufacturing minimizes cycle times and resource requirements.

  • Integration and automation benefit supply-chain quality and compliance governance by improving medical device manufacturers’ ability to monitor their partners’ quality and compliance performance.


Manufacturers in the highly controlled medical device industry face a range of challenges associated with current and emerging regulations that directly impact their operations. To compete, grow, and innovate in this complex environment, manufacturers should adopt an enterprise-wide quality culture based on ERP solutions and integrated quality management capabilities. By choosing a cloud-based ERP solution that integrates quality management functionality, medical device companies can preserve capital, focus on innovation, and more effectively comply with global regulations. A cloud-based ERP approach can help to transform medical device companies into effective enterprises that focus on patients, thrive on innovation, and comply with FDA and other regulations.

Bart Reitter is director of marketing for life sciences at Santa Barbara–based QAD. With 20 years of experience in the enterprise software industry and expertise in the life sciences field, he is responsible for defining the company’s life sciences global strategy, solution positioning and messaging, product development, knowledge management, and regional support. He joined the company in 2013 and previously oversaw global marketing for a leading contract research organization. His previous software sales and marketing experience included 10 years at General Electric, where he served as global industry manager for life sciences. He received a bachelor’s degree in marketing. Reach him at [email protected].

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