SECTION A-COMPULSORY QUESTION 1: (50 MARKS) Read the case carefully and then answer the questions which follow. MEETING QUALITY MANAGEMENT ISSUES Researchers and theorists believe that in the long run quality will become the most important differentiating factor for organisations operating in a competitive environment. This is so for all sectors of the economy. Quality is in fact one of the five performance objectives the others being speed, delivery, cost and flexibility Literature abounds with examples of organisations which have disappeared since they have ignored the quality aspect. The example, which follows is an illustration of this Premier Pharmaceuticals Ltd started operation in 2008 in the same compound as the former Mauritius Pharmaceuticals Manufacturing Ltd (MPM) at Plaine Lauzun. The Government, through the Ministry of Health is a large purchaser of medicines and its main supplier was once NPM. With the change in Government in 1995, the purchase policy changed drastically. International tenders were launched and thus MPM had to compete with manufacturers from India and Pakistan MPM was believed to be close to the former Government and it inevitably did not obtain the contracts from the Ministry of Health it tried to survive with distribution to local Pharmacies and some exports. However, it was difficult to compete with foreign giants such as GSK, Pfizer and Merck. Finally it closed down The building and equipment were left intact and remained idle for at least a year. A group friends took over the facilities in 2007. Since the building and equipment were already present it was not difficult to put the organisation back on rails. One major component of quality in a pharmaceutical concern is hygiene and good housekeeping. The whole building was renovated and the equipment serviced. The Pharmacy Act requires that the person to be responsible for production in a pharmaceutical company needs to have 10 years' experience in a similar concem. No one was available in Mauritius. Thus, the organisation had recourse to an Page 2 of 8 wat hom die Quality assurance was under the responsibility of a Mauritian, Som the company ottaneet the required permite from the Phamacy Board and started operation March 2008 The aut responsibility of the quality assurance manager was to put in place a qually control system for the Laboratory. Previously Dr Sam has worked at Esquel Mawrthue) Les Quality Manager He was aware of the various stages involved in a quality control syatem and could develop and implement a similar system at Premier Pharmaceuticals i The quality control system worked effectively Tests were carried out on tablets, ointments and syrups Samples were taken, tests carried out and conclusion drawn Records of the test results were securely kept since officers or Me Pharmacy Board regularly visited the company and consulted the The Managing Director attended a seminar on quality costing and on his return instructed Dr Sam to carry out a quality couting exercise for the Laboratory. He told im that he was committed to get the project implemented Dr Sam collected data for the purpose. The following data were collected The organisation was in the process of implementing ISO 17025 for its Laboratory and in the context the staff have received training in the requirements of the standard. The training costs Rs 72 000.00. It applied and obtained a refund of 70% of the training fee from HRDC. The salary of the four Quality controllers for the year amounted to Rs 1 600 000.00 and the cost of consumables (reagents, filter paper, ete) totaled Rs 1 200 000. The equipment of the Laboratory were calibrated at Legal Metrology Services. The fee paid for the purpose was Rs 170 000.00. Errors are onen committed in the carrying out tests and in test reports. The cost involved in terms of reagents, consumables and labour for correcting these errors has been accounted for and the total came to Rs 890 000.00. Complaints are often received and these are handled The total cost for handling complaints came to Rs 2 570 000.00. The services of a consultant for accreditation of the laboratory amounted to R$ 450 000.00. Dr Sam presented a report on quality costs to Top Management, during the Management Review meeting. Actions were also formulated in order to Page 3 of 8 address the findings. A brainstorming session took place. It was agreed that focus should be laid on the areas for improvement. Sales continued to progress at a satisfactory rate. The organisation bid and obtained several tenders from the Ministry of Health. Mauritius is limited by its size. The organisation searched for orders overseas. However, a requirement of foreign customers is that the organisation needs to be ISO 9001 certified. The standard offers numerous benefits to organisations implementing it. The services of a consultant was enlisted to help the organisation to be ready for certification. Thus, the system was established, documented, implemented and maintained. The organisation was audited by the certification body. However, several major issues were raised. Thus, it was not recommended for certification. The organisation had to undertake the tedious job of finding the root cause and proposing corrective action for each non-conformity raised. It had six months to address all the major non- conformities. The organisation continued to supply the local market and did get some orders from Madagascar. Things were looking bright. However, it soon suffered a real blow. A whole batch of paracetamol tablets, supplied to the Ministry of Health and Quality of Life, was found to be contaminated with fungus. Questions were raised about the quality assurance system in place. A prohibition order was issued by the Pharmacy Board. Officials of the Ministry of Health and the Pharmacy Board undertook inspection of the infrastructure and production facilities of the company. They noted a number of shortcomings and the organisation was asked to take remedial measures. It is good to note that most of the shortcomings have been previously identified by the Certification Body during the ISO 9001 audit. Had the organisation taken action, the problem it later faced could have been avoided. Soon the Production Manager left and Dr Sam soon followed him. There was no one to address the quality issues. When quality is involved there cannot be any concession Good manufacturing practice has always existed in the Pharmaceutical industry. This is one field where standards have always been followed by organisations around the world. The organisation has failed to meet the expectations of its customers and it has to bear the consequences. Thus, it closed down in 2012. Page 4 of 8 ( a) Dr Sam was asked to implement a quality control system This system consists of a number of stages. With reference to the product, discussed in the case, explain the various stages involved in such a system, illustrating your answer with examples. (7 marks) (a) Dr Sam was asked to implement a quality control system This system consists of a number of stages, With reference to the product, discussed in the case, explain the various stages involved in such a system, illustrating your answer with examples. (7 marks) (b) With reference to the case, discuss why it is preferable to take a sample of the product rather than doing 100% inspection on all units of product. (6 marks) (c) Dr Sam was instructed to implement a quality costing system in the organisation (0) Why is top commitment essential for the implementation of a quality system, such as, quality costing? (3 marks) (ii) Use the data collected by Dr Sam to prepare a quality costing schedule. (8 marks) What are your findings? Based on these findings, formulate recommendations to address the pertinent issues. (5 marks) (d) Foreign clients require clients to be certified to ISO 9001 Quality Management System. This standard offers the organisation numerous benefits. Discuss the benefits which an organisation, such as Premier Pharmaceuticals Ltd could have obtained with the implementation of ISO 9001 QMS. (10 marks) (e) During the external audit of Premier Pharmaceuticals Ltd the auditor noticed that there were flies in the room, where Beco-Actin Syrup was being produced. According to the Standard Operating Page 5 of 8