As pharmaceutical recalls continue to hit headlines, an ongoing focus of research for one Fisher College of Business professor is taking on a new urgency.

John Gray Fisher College of Business Ohio State

Prof. Gray, speaking at the Center for Operational Excellence’s April “Leading Through Excellence” summit.

Fisher Prof. John Gray and two co-authors of an unpublished paper recently wrote an article featured in the online edition of U.S. News & World Report that highlights the ongoing challenges pharmaceutical manufacturers face in maintaining quality, particularly when production has been outsourced or offshored. U.S. News published the article just days after GlaxoSmithKline announced a recall of asthma drug Ventolin and several months after dozens of people died because of quality issues at the New England Compounding Pharmacy in Massachusetts.

Gray, along with Prof. Aleda Roth of Clemson University and Associate Prof. Brian Tomlin of Dartmouth College, took a close look at the performance of pharmaceutical plants run by firms that own the brands, versus those run by contract manufacturers. There was not an overall difference, but their research did indicate less-experienced and less-regulated contract manufacturers had a higher risk of quality issues.

“Our research provides empirical evidence that drug manufacturers are hard-pressed to consistently maintain high quality operations even in their own domestic facilities,” Gray and his co-authors wrote, referring to multiple research papers. “This challenge is magnified when production is performed in offshore and outsourced plants.”

The challenging business of making and supplying safe pharmaceuticals has been a topic of interest in Gray’s research for years.  In 2011, he co-authored a study published in the Journal of Operations Management that found drugs produced in offshore manufacturing plants – even when run by an American company – pose a greater quality risk than those produced stateside. They attributed this result to differences in language and culture between the plant’s personnel and those at headquarters.

Gray told us then that “just one quality error that hurts customers or leads to a recall can be extremely costly to a company responsible.”

What makes Gray’s research with his co-authors so resonant these days is the underlying truth that goes beyond organizational borders and language barriers: Successful quality reforms come from far-reaching culture change across the entire supply chain, a feat that isn’t easy, cheap, or quick. For any industry, defeating a culture of silos, miscommunication, and blame is a hard-won battle.

It’s an urge in the pharmaceutical industry, and countless others, to turn to technology – buy Gray and his colleagues write in the U.S. News article that the solution, instead is in people and day-to-day processes.

“Absent such an organizational mindset,” they write, “quality failures will occur even with the best technology.”



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