Two Types of Risk
Typically, companies tend to focus on risks that they can control within operation which is a easy habit to fall in to. But, there are other risk outside of operations that must be managed to protect the company from threats.
What are internal and external risk? How might a medical device develop company/ manufactures be impacted by both (provide examples)?
Internal risk includes personnel management concerns such as labor shortages or low morale, as well as technology difficulties such as outdated software. External risks include economic slowdowns, which result in lower revenue, as well as political dangers from trade wars, which damage overseas sales.
Risk management is a continuous activity that happens throughout the life cycle of a medical device. Risk analysis is required at both the start and the conclusion of the risk management process. It starts with a systematic process of defining features, dangers, and dangerous circumstances, as well as a risk assessment for each. We observe the procedures of gathering manufacturing and post-production information, as well as reviewing for implications on the device's risk profile, towards the conclusion.
It's also crucial to determine if the total residual risk is no longer acceptable in light of the intended use's advantages, as well as determining whether the widely accepted state of the art has changed. When nothing is currently known about a device due to its newness or lack of publicly available data, data from comparable devices might be very useful.
Another internal risk can be seen where the transfer from prototype to process equivalent part may not be as easy due to a poor CQA list or difficulty of manufacturing of the parts. This can set a project back months to be able to effectively have a product come to market during the design phase. An external risk can also be at a manufacturer where a process such as swaging was not fully vetted, even when the supplier gave the okay, and breaks during verification or validation activities. There are many process control risk assessments are completed during this time, but they can occur without notice.
Additional internal risks also include change in management styles which can greatly benefit the company or lead to its downfall. Loss of talent can also be a huge risk to the company and cost more to train new employees or employ those with enough expertise. That's why talent acquisition has come to the forefront of a lot of companies priorities for the year.
External risks can include vendor delays. Oftentimes companies work with third parties or CMOs whose own internal risks can become an external risk to the company in question. The whole process of risks can be seen as a web of interconnected cause and effects which can make risk analysis quite difficult sometimes.
Internal risk is risk associated with the development and standard testing of a product. Its simple to understand some products are inherently more risky than others such as a band aid vs. a hip implant. Additionally, standard testing may show deficiencies in the product that can leave a patient susceptible. These deficiencies should only be apart of a pros and cons list rather than an error in manufacturing. These are internal risks because they are known during development and closely monitored. External risks happen when the product leaves the manufacturing company and lands in the hands of either the patient or doctor. The people who design implants know far more about their strengths and weaknesses/dos and don'ts than the end user, which leaves room for unforeseen errors in the case of mishandling, improper placement within the body or undue physical/electrical force applied that was not able to be predicted in the development stage.
An important internal risks was mention above, labor issues. Another issue regarding labor includes miscommunication. Many of the production floor workers tend to speak a different language which tends to lead to issues in operating the machines, sanitizing, cleaning, etc. There are times where the production floor workers tend to incorrectly work on their assigned task due to miscommunication as a result of a language barrier. This can severely impact the integrity of parts and products as they get passed off to production workers.
An external risk could be supply chain shortages. This pandemic we have seen severe supply chain issues that have been affecting a wide variety of industries. An important example of this is the shortage of semiconductor which disrupts medtech companies. Shortages of semiconductors can lead to big setbacks.
Internal risks are easier to identify and manage than external risks. An example of internal risk can be in the QA inspection method implemented. If the inspection test method has inherent risks (operator error, variability in equipment, etc) then defective product may pass inspection.
External risks can fall into four categories: manufacturing/vendors, launch into market, transport to customer, and customer use. Many of the external risks mentioned in the above posts fall into the vendors, transport, or customer use risk, however part of the risk assessment should include identifying risks that may arise when launching to market. This includes risk of competitor products launching at the same time or before product launch date or lack of sales training.
Since there are two types of risks involved, their difference would enable us to solve them. Cost risk, schedule changes, performance and quality risk are listed as internal risks. Cost risk means risks of project costs being exceeded due to inaccurate estimates of costs. If it takes more time than planned it's known as schedule changes and quality risk means the end-product fails to deliver the planned results with the promised performance and quality.
On the other hand, external risks include governance risks, strategic risks, market risks, etc. Project risks include both types of risk, the internal risks associated with the successful completion of each project phase. To minimize internal risks more status meetings with the project team can be held as an action in order to be able to react more quickly to project execution problems. Though we can minimize the internal risks, how can we decrease external risks?
Internal risk is any risks that can be avoided within the development of a project. In contrast, external risks are ones out of the control of those who are running and in charge of the project, hence it being buyers, vendors, and the market as a whole.
Internal risks could impact a medical device development company because it is internal issues such as product design, labor issues (payment wise or leadership), and machine failures that produce the device. By having these features impacted, it sets back a whole project and delays an appropriate release date.
External risks would impact a medical device development , for instance if there is a competitor who has a cheaper product that produces the same results, or if the current market is not looking for the medical device that was developed or even a slow down in the economy. These could hurt and impact the company because it is out of their control factors such as economy and the market.