Why Paper-Based QMS Systems Have Become Obsolete for Contract Manufacturing
Patricia Santos-Serrao, RAC
DirectorClinical and Regulatory Solutions,
Pharmaceutical, Blood & Biologics

This article addresses the quality issues inherent in contract manufacturing.

Around the globe, life science companies have found it extremely advantageous to outsource significant activities to contract manufacturers. India, for example, has experienced massive growth and respect as a global hub for pharmaceutical contract manufacturing. Outsourced activities may include new drug protocol designs, preparation of materials submitted to the US Food and Drug Administration (FDA) and other regulatory bodies, and manufacturing of drugs for global pharmaceutical companies. For brand companies, the inherent advantages of outsourcing are numerous. It allows pharmaceutical and medical device companies to concentrate on their core competencies, and at the same time reduce labor and overhead costs.

So why is there now a shift from accepting paper-based quality management systems(QMS) to electronic systems? When a brand company transfers a function to another organization, the contract manufacturing organization (CMO) becomes subject to the same regulatory action as its client. Contract organizations share with their customers the burden of compliance for all expectations handed down by global regulatory bodies. Effectively managing every requirement and nuance of regulatory compliance, quality and risk mitigation through a paper-based, manual QMS system is a daunting task that case studies have shown most companies fail to achieve.

Case in point-the FDA recently sent a warning letter to an Indian pharmaceutical contract manufacturer, stating that two of the company's active pharmaceutical ingredient (API) suppliers were not registered as manufacturers with the agency. Despite this, the FDA says the company shipped their products with the API from these companies to the US, claiming itself as the original manufacturer.1 The fallout to the contract manufacturer could have been catastrophic and the event could have been avoided if all parties understood and complied with the regulations. Those regulations, and the ability to manage to them, would have been more apparent and visible if an electronic QMS had been in place. The FDA has made it clear to US and global contract manufacturers that if they do not follow the regulatory compliance rules as if they themselves were the original manufacturer, then they may not be found to be in compliance.

The actions that can be taken by the FDA or other regulatory bodies can result in a number of negative consequences, in addition to the warning and notifications themselves. These can include loss of business, damage to reputation and a serious hit to being competitive.

Damage to Business. Depending on the scope of the violations and resulting notifications, clients and partners may be required to cancel current contracts and any future contracts may be in jeopardy as well. Companies that are unsuccessful in their attempts to solve the issues addressed in the warning letters or notifications may be forced to cease manufacturing or even shut down their facilities.

Damage to Reputation. When the FDA sends and posts warning letters or notifications, they become part of the public record and thus accessible to the media, partners, competitors, customers and influential individuals. This can have far reaching impact on the contract manufacturer's reputation as a company that is unwilling or unable to follow the established rules and regulations.

Damage to Competitive Advantage.
Contract manufacturing is a rapidly growing space and companies have to compete for an increasingly competitive market share. Competitors revel in their ability to capitalize on anything that will provide them with an advantage over their rivals. FDA warning letters and notifications received issues against a competitor are highly effective tools for negotiations.

The extensive ways in which regulatory non-compliance and the resulting warning letters and notifications from regulatory bodies can damage a contract manufacturers business are almost limitless. For those items listed already, there are dozens more that can escalate from an original violation .

This takes us back to addressing why paper-based QMS systems have become obsolete for contract manufacturers. The volume of regulatory compliance, quality and risk mitigation factors all contract manufacturers are subject to is significant in number and growing every day. The ability to identify and manage all of these required processes manually is all but impossible. Regulatory bodies are going to be looking much closer at companies who declare they still used paper-based QMS systems than those who have adopted an electronic system.

Electronic QMS systems have a primary function that ensures original and contract manufacturers have built-in access to the regulatory requirements across the all phases of the manufacturing and distribution process, including aspects of customer relationship management and change controls. They make it possible for any organization subject to regulatory requirements to know that the "who, what, when, where, why and how" of manufacturing are addressed in a manner that helps facilitate compliance. Without the intrinsic advantage of an automated QMS, it has been proven in far too many instances that an inefficient paper-based QMS puts companies and lives at risk.

Simply put, the QMS industry has made a number of technological advancements to help avoid regulatory infractions and the stumbling blocks that frequently cause problems and jeopardize compliance for original and contract manufacturers. Facilitating and maintaining regulatory compliance is indisputably essential for a contract manufacturer to be recognized as a quality driven and reputable organization. How an organization achieves a sustainable level of compliance can be a fluid, adaptive and manageable process, or it can remain difficult and tenuous. One of those conditions creates a long-term profitable state and the other does not. The fundamental difference is the implementation and use of a reliable and proven electronic QMS versus a paper-based manual QMS. The choice rests with the contract manufacturer, but the decision should be obvious. By automating a CMO's quality processes with an electronic QMS that drives quality, compliance can be ensured. The number of manufacturing, business and process management areas that can immediately be improved through an electronic QMS are plentiful.

Document Control

Contract organizations are conscious of intricacies revolving around handling massive amounts of documentation pertaining to different procedures tracked in the QMS. It gets tedious-and potentially precarious-to maintain copies and binders of documentation when processes are continually going through recursive updates and reviews. Managing documentation with manual systems makes it difficult for employees to be notified of and educated about the latest changes. The more rogue documents there are floating around , the more likely employees are to get confused about which document version to follow. It can take too much time for a document to be routed to the appropriate personnel for review. By the time the right documentation actually gets approved, employees may have already used an outdated version of the document to perform a procedure or obsolete instructions may have already been implemented throughout different parts of the manufacturing process. Shifting to an electronic QMS helps increase a contract organization's quality assurance and empowers quality teams by automating task assignments, change control routing, employee notification, tracking, escalations, reviews, and approvals of all documentbased processes. Having automated controls that can be managed with an electronic QMS dramatically simplifies compliance, change management and the implementation of revised controls while also mitigating risk.

Corrective and Preventive Action System

In 2016, the number one reason the FDA issued warning letters to companies was due to the failure of their corrective and preventive action (CAPA) programs. CAPA programs are the efforts dedicated to the investigation and correction of quality issues in order to prevent recurrence. Regulatory inspectors and ISO auditors consider them to be absolutely critical in the building, management and maintenance of a risk-managed and compliant manufacturing environment. When implemented properly, a sound CAPA program improves product quality and safety, increases customer satisfaction, and more importantly, ensures compliance. Many companies opt for paper-based and hybrid corrective action programs because they initially entail lower up -front costs. However, paper-based systems are inherently inefficient due to the fact that routing CAPA tasks and other related documentation requires an excessive number of man-hours. Such systems also involve a great deal of time devoted to obtaining approvals and signatures. Even performing manual searches and retrieving documents during inspections and audits may prove to be impossible when hard copies of documents are divided amongst different systems and locations. Basically, manual management of CAPA activity leads to an increased number of mistakes, more incomplete actions and an inability to dynamically access critical data.

Automating a CAPA system will help organizations properly manage the transfer of information. The right system should be web-based, enabling access to customers, vendors, and other authorized external users. This will allow customer complaints or other potentially CAPA-related forms to be properly tagged, routed, reviewed and managed.

Change Control

When a change is required for compliance or an improvement to a process, companies will lose business if they lack the ability to execute changes as seamlessly and with as much fluidity as possible. Incorporating changes manually at various levels across an organization exposes the organization and its staff to potential failures throughout multiple departments. When these tasks are automated, it reduces cycle times significantly and improves efficiencies in identifying less critical changes, while also documenting an audit trail for all changes. Avoiding external audits due to improper CAPAs and change control issues is an immediate benefit of using an electronic QMS .

Quality Audit Management

The quality audit process is the means by which original and contract organizations evaluate various departments, employees, documentation and business processes to validate and ensure a risk-mitigated and compliant system. Through auditing, companies can identify weaker areas and concentrate on the improvement of respective processes. Contract organizations that schedule audits on a consistently recurring basis are better positioned to improve the overall efficiency of the QMS and consequently increase business. With an electronic QMS, the automated scheduling of all recurring audit-related activities helps ensure that all departments are aware of the timelines and expectations of audits and that those audits are properly timed and executed without failure. Facilitating and scheduling audit activities with a paper-based QMS system can be a timeconsuming process that inevitably suffers from impediments to critical audit specific activities and untimely implementation of change control actions. Audits aren't always internally based. They can also be driven by the regulatory bodies, customers or the organization's vendors or suppliers. It is almost impossible for a third party to implement a proper audit properly or in a timely manner when all records and information is locked in a (potentially geographically dispersed) paper-based system.


As contract organizations evolve and regulations continue to change, perceptive company leaders have little choice but to be more proactive in implementing systems that improve efficiency and facilitate compliance. One of those systems should be an electronic QMS.

From creating a competitive operation to maintaining regulatory compliance, an electronic QMS provides a foundation that allows companies to properly and quickly manage quality issues, whilst ensuring that time, effort and resources are focused on continued growth and success. A paper-based QMS is too error prone and inevitably receives increased scrutiny from regulatory bodies that determine whether or not a company is properly managing its quality processes in accordance with established requirements.


Mezher M, New FDA Warning Letter, Form 483 for Two Indian Companies. Raps .org, May 2, 2017, http://raps.org/Regulatory-Focus/News/2017/05/02/27463 /New-FDA-Warning-Letter-Form-483-for-Two-Indian-Companies/

FDA, CY2016 Annual FDA Medical Device Quality System Data Inspections: FDA Form 483 Observations, and Warning Letter Citations, https://www.fda.gov/ downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH /CDRHTransparency/UCM554548.