Overseeing for Quality in the High Tech Environment

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Overseeing for Quality in the High Tech Environment

English | 2020 | ISBN: N/A | ASIN: B0875M876R | 150 Pages | EPUB | 0.18 MB

Indeed, a trend in an increasing number of high-tech industries is for companies to out-source manufacturing completely to third-party contractors or joint-venture partners. In so doing, those companies hope to avoid the risks of investing in expensive manufacturing plants and losing sight of what they see as their true source of advantage: product research and development.Our research in the health care industry over the past decade, including a recently completed study of the pharmaceutical industry, suggests that such thinking is often costly and potentially dangerous to the competitive health of high-tech companies. In fact, it is not only possible to excel at simultaneously developing new products and new manufacturing processes but also necessary. In many high-tech markets in which product technology is rapidly evolving, manufacturing-process innovation is becoming an increasingly critical capability for product innovation. This trend means that many companies should devote more resources and attention to process R&D.Manufacturing-process innovation is more and more critical to product innovation.Consider the following example: Sigma Pharmaceuticals (a fictitious name for a real company) spent ten yearsand more than $100 million researching, developing, and clinically testing a new drug to treat a serious infectious disease. By all accounts, the project was a smashing success. Clinical trials demonstrated that the drug was safe and highly effective, and it quickly won the approval of the U.S. Food and Drug Administration (FDA) for commercial marketing. Unfortunately, senior managers were so focused on making sure that the product moved through clinical trials as quickly as possible that they gave the process-development side of the project short shrift.Making the drug, which consisted of a complex molecule, required the development of breakthrough process technology. Senior managers, however, did not allocate significant resources to process development until they were confident that the drug would receive FDA approval. By that point, it was too late for Sigma to increase the yields of the process technology before it began to sell the drug. As a result, the company could not meet initial demand without major investments in additional capacity-a task that took nearly two years to complete. In the meantime, the company lost potential sales. Even worse, it lost its opportunity to penetrate the market while it had an exclusive position. (The FDA is expected to approve a competing drug shortly.)

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