VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY --- NGUYEN HOANG KHUE TU THE USE OF DESIGN FAILURE MODES AND EFFECTS ANALYSIS DFMEA TO ASSESS RISKS
GENERAL INTRODUCTION
Rationale of the study
The Law on Pharmacy (2016) stipulates that medicines are products derived from animals, plants, or minerals that are synthesized by chemical or biological methods which they are prepared into forms suitable for human use for disease prevention, and treatment Many cases of good effects of the medicines often appear early, appear immediately and harmful effects are potential then those deleterious effects will be appeared later (Hanoi Drug, Cosmetic, Food Quality Control Center, 2020)
Risks in healthcare are the likelihood that an individual or population may get an illness, injury, condition, die, or experience another associated event (Riehle et al 2013) Medical mistakes and unfavorable incidents are its key causes According to the Institute of Medicine's
To Err is Human (1999) reported that a medical error occurs when a planned activity, such as an execution error, is not carried out as intended or when the wrong plan is used to accomplish a goal, such as in a strategy defect (Kohn et al 1999) These mistakes are many in nature and frequently occur at every level of the system In addition to prescription, order communication, product labeling, packaging, and nomenclature, they may also have to do with compounding, dispensing, distribution, administration, education, monitoring, and usage A harm that necessitates extended hospitalization, incapacity, or death and is brought on by poor healthcare management rather than a patient's illness is referred to as an adverse event (Rafter et al 2015) Administration, investigation, treatment, and communication errors are examples of procedural errors and knowledge and competence namely misdiagnosis, poor treatment judgments which can be used to classify them ( Kagan and Barnoy, 2013) The features of risks in healthcare include complexity, the potential for patient damage, unpredictability, and catastrophic repercussions More significantly, it is necessary to manage healthcare failures pro-actively since healthcare risk might have catastrophic repercussions
According to Rafter et al (2015), adverse events occurred in around 10% of hospitalized patients, a large part of which might have been avoided
Like other large worldwide retail pharmacies in general and in Vietnam in particular, BuyMed Company is a pioneering e-commerce platform specializing in the distribution of health care products including medicines, supplements, cosmetics and medical equipments
As the connection between pharmaceutical manufacturers, distributors and pharmacies in Vietnam (BuyMed, 2018) From March, 2022, BuyMed has opened a business model as a franchise pharmacy chain With the strength of a long-standing brand with high recognition along with prestige and products that are known and trusted by customers As a result, Circa has cooperated with small pharmacies that do not have a solid foothold in the pharmaceutical market Retail pharmacies cooperate with Circa because the stability of the Circa pharmacy business process will be higher, less risk, reasonable business processes, and available source of products from BuyMed Up to now, Circa has more than 100 pharmacies participating in the franchise and has become one of the reputable and trustworthy brands, bringing many benefits to businesses Howerver it has just opened, all order processing procedures and regulations still faces many uncontrollable difficulties, causing risks in terms of delay in delivery of orders which can causes mold and clumps of powdered medicine, dilutes or reduces the concentration of some substances in the medicine or is destroyed as well as supply shortages of specialty pharmaceuticals and prescription medicine According to the sales report of BuyMed (2022) mentioned 2 charts below namely late in delivery and the average total number of broken product returns due to insecure package in the past 4 quarters at Circa pharmacy franchise systems
Figure 1-1 Delay in delivery of orders in the past 4 quarters for Circa pharmacy franchise systems (Source: presented by the author)
Looking at delay in delivery of orders bar chart the total amount of medicinal products delivered late for a total of 63,000 in the past 4 quarters loss more than 200 million and the highest number of recorded late delivery is 12,200 orders on March, 2023 and the lowest late delivered order was recorded at 6,750 orders in May, 2023 To sum up, the late delivery will make the temperature of nature highly affect the medicinal products, making some chemical reactions happen faster, causing the medications to lose water vapor, crystallize some liquid medicinal products cause damage to medicinal products such as antibiotics, medicinal herbs, and tinctures High temperature combined with humidity will make microorganisms grow faster, causing drug spoilage Low temperatures can damage some medications in the form of emulsions or precipitate some medicinal products Therefore, the company BuyMed should take measures to mitigate those risks
Firgure 1-2 Average number of broken product returns due to insecure package for Circa pharmacy franchise systems in 4 quarters (Source: presented by the author)
According to the Project department's recorded from May to June 2023, the Average amount of returns of broken products exceeds the allowable limit which made up around 15.6%, with 312,500 medicinal products input for sale from the past 10 months, there are about 48,850 of returns of broken products By resulting in postponements of therapy or modifications to treatment plans, such as substituting less effective therapies when a patient's preferred medication is not available, damaged products can affect patients' health outcomes The treatment of a patient may be jeopardized even when substitutes for the desired medication are available Therefore, so it is necessary to find out what is wrong in this order processing and measures to improve it (BuyMed, 2023)
In order to better understand the risks in order processing, Pareto chart is used to statistically calculate risk rates, from which it is possible to identify risks with a high percentage in the process The order processing at the franchised pharmacy chain system is recorded by the Project Management Department from May 2023 to June 2023 as having 7 risks and the highest is Volatility in price with approximately 50%, followed by risks Late delivery of madicinal products with nearly 23% and 5 other risks also account for an equally high percentage These risks need to be recognized when designing new order processing for retail pharmacies
Table 1-1: List of risks in order processing for Circa pharmacy franchise systems in 4 quarters (Source: presented by the author)
No Risks Number of records Problem (%) Cumulative percentage (%)
Late delivery of medicinal products 63,000 22.73% 64.21%
Product picked with wrong and duplicated SKU 17,250 5.86% 94.40%
Purchasing products from wholesaler at the market 15,530 5.60% 100.00%
Figure 1-3 Pareto chart classifying risks in order processing for Circa pharmacy franchise systems in 4 quarters (Source: presented by the author)
BuyMed has been successful with its franchise pharmacy system project, but it does not stop there In 2023, BuyMed plans to expand a new project to establish 3 retail pharmacies, namely retail pharmacy at Hospitals in Vinh Long and Can Tho and retail pharmacy in Ho Chi Minh City (BuyMed, 2022) However, currently Circa franchises are facing the damaged products accounting for 15.6% of the total number of returned medicinal products in stock which leads to Circa cannot sell specility pharmaceuticals and prescription medicine to patients and there are also some potential risks in running the pharmacy franchise projects such as delay in delivery which can affect the quality of medicinal products Therefore, to avoid the situation of many risks occurring during the process of operating a franchised pharmacy chain, the upcoiming project on hospital pharmacies and retail pharmacies established by BuyMed that needs to be deterrmined and managed risks A crucial early preventative measure is the Design FMEA (DFMEA) approach, which can mitigate failures and mistakes before they affect patients The DFMEA tool has therefore been accepted as a suitable and efficient strategy for healthcare risk management (Geum et al 2011a; Wang et al 2016; Claxton and Campbell- Allen 2017) With the deployment and sophistication of medical equipment and associated processes rising over the past few decades, many researchers have used DFMEA to prevent or lessen medical mistakes and adverse occurrences (Wang et al 2016, Claxton and Campbell-
Late delivery of medicinal products
Product picked with wrong and duplicated SKU
Purchasing products from wholesaler at the market
Number of records Cumulative percentage (%)
Allen 2017, Niv et al 2018) The US Department of Veterans Affairs National Center (2001) implemented healthcare FMEA to increase patient safety
Regarding to previous researches have studied the application of the DFMEA method in enterprise In Sri Lanka, the research “Application of failure mode and effects analysis (FMEA) to improve medication safety in the dispensing process – a study at a teaching hospital, Sri Lanka” Anjalee et al (2021) identified the significant risks, effects and causes in medical distribution process at the hospital, the DFMEA is based on assessing both the risk score and the RPN value Moreover, In the USA, the research “Using failure mode and effects analysis to plan implementation of smart i.v pump technology”, Wetterneck et al (2006) showed that DFMEA is a useful tool for identifying risks and improving medication administration before applying smart i.v pump technology to manage dose error There is a tendency toward utilizing streamlined forms of DFMEA for healthcare risk analysis, although the traditional RPN approach is still the most widely used method for managing medication assessment process Additionally, Pham Dinh Vu (2014) applied the FMEA implementation process to identify 14 types of failures in the process as well as impacts, causes and current controls Criteria for evaluating the S, O, and D indexes of the potential risks 4 quality bugs with a high RPN that need to be improved: stitching error (720), ink smear error (288), product mistake (210) and error missing number (140)
There are quite a few studies that have mentioned the use of FMEA in specific fields, specific businesses, but there are no articles written about the application of FMEA to assess risks in the procedures in order processing of the pharmaceutical sector When building the retail pharmacies, BuyMed Company designed a pharmacy order processing in place, but it need to be identified and mitigated risks before proceeding and applying to the new project, so this research article will apply DFMEA to analyze the effect of design failure modes The DFMEA brings benefits such as: pre-analysis of possible failures, thereby avoiding errors during the design, development and creation of products DFMEA helps significantly improve the safety and functional reliability of products and processes DFMEA helps product and process design achieve the desired results by eliminating risks before it happened From there, significantly reducing product modifications and updates due to errors, increasing the chance of doing it right the first time Additionally, DFMEA reduces quality costs both externally and internally within the organization Building a knowledge base within the organization, almost all process and product related knowledge is outlined here and
8 with the participation of many departments within the organization: throughout the interaction process by doing DFMEA, departments will build a common knowledge base and understand interactions From there, the problems of conflicting functions later will be reduced (Dinh Vu, 2014).This methodology can identify potential risks in product design at the development stage Overall, the study: “The use of design failure modes and effects analysis (DFMEA) to assess risks in order processing and propose solutions to mitigate risks of retail pharmacies at BuyMed company” is done to apply DFMEA to assess risks of order processing for retail pharmacies at BuyMed Company and propose some solutions for BuyMed company to mitigate order processing risks of retail pharmacies.
Objectives of the topic
In this papers, the main objectives include:
− Identify potential risks that need to be prioritized for improvement in order processing
− Prioritize risk using S, O, D scores to calculate the Risk Priority Number (RPN)
− Propose solutions to mitigate risks order processing for retail pharmacies at BuyMed Company
Significances of the study
For BuyMed Company, the results of this thesis will immediately benefit because of its policy of tightly regulating the operations of retail medication projects and mitigating risks in order processing of retail pharmacies The findings from the development of the S,O,D scale have long-lasting value From there, the business can address issues with breaks in supply of specialty pharmaceuticals and prescription medicine, manage inventory and better allocate resources and minimize supplier-related risks like delivery delay, quality issues, and availability issues to prevent loss due to shortages of medications It can also reduce costs by saving time, money, and effort
For retail pharmacies, provide aggregated and reliable information for Circa pharmacies regarding order processing of retail pharmacies from BuyMed Company and improve the ability to control quality on the order processing.
Scope of the thesis
Scope: This thesis conducts at BuyMed Company 28Bis Mac Dinh Chi, Da Kao District
Objects: Circa pharmacies which are Circa pharmacy at Vinh Long province, Circa pharmacy at Can Tho and Circa pharmacy at 207 Le Dai Hanh Ward 13 District 11 as well as all the processes regarding the retail supply chain process flow.
Process of implementation
The process of implementation is carried out in a sequence of six steps, starting with determining the study's objective and ending with implementing and evaluating the results as shown in Figure 1-3 The steps of the thesis follows the continute process which shown the dashed line below It means that the thesis only goes through the next 3 steps (step 4, 5, 6):
Figure 1-4: Study framework (Source: from study of the author)
Step 1: Literature overview of research and chosen DFMEA approach
The use of design failure modes and effects analysis (DFMEA) to assess risks in order processing and propose solutions to mitigate risks of retail pharmacies at BuyMed company
Step 2: Identify critical risks in the order processing
Step 3: Identify the causes in the order processing
Step 6: Conclusions and recommendations Step 4: Evaluate and propose improvement to imigate critical risks
Step 5: Deploy testing and effective evaluation of solutions
Information need analysis
Table 1-2: Primary and secondary data for each objective (Source: From study of the author)
What Why From whom Where How When
Identify potential risks that need to be prioritized for improvement in order processing
Determine potential failures and determine the impact (if any) if these failures occur
Books and research articles related to DFMEA
Prioritize risk using S, O, D scores to calculate the Risk Priority Number (RPN)
Severity, occurence detectability selection and rank
Calculate the risk priority factor (RPN) Rank the risks in the order of the RPN Google
Books and research articles related to DFMEA
The most serious risks selection
Use Pareto rule to pick out the the most serious risks to take preventive action
Propose solutions to mitigate risks order processing for retail pharmacies at BuyMed
What Why From whom Where How When
The managerial implication for the order processing retail pharmacies at BuyMed
Propose recommend ations to mitigate risks for retail pharmacies at BuyMed company
Project, Growth, Pharmaceutical, Purchasing, Customer Services department
LITERATURE REVIEW AND RELATED RESEARCH
Definitions and concepts
The term of retail pharmacy implies an autonomous pharmacy, a chain pharmacy, a general pharmacy, or a mass merchandiser pharmacy that's authorized as a pharmacy by the State which apportions solutions to the common open at retail costs Such term does not incorporate a pharmacy that apportions medicines to patients essentially through the mail, nursing domestic pharmacy, long-term care office pharmacy, healing center pharmacy, clinics, charitable or non profit pharmacy, government pharmacy (Lawful Organized, 1991) According to American College of Clinical Pharmacy (2015), A key concept highlighted in this definition is that the drug store shows up in all healthcare settings and is conveyed in any setting where the medicine specialist interatomic straightforwardly with the understanding This organizational structure provides the capacity, impact, and enablers for the method of care, which incorporates facilities, staff, regulatory forms and equipment These components may be valuable within the assessment of a benefit of retail pharmacy The pharmacy definition is built conceptually using Donabedian’s system for assessing the quality of therapeutic care Within the setting of a pharmacy, the constituents are the pharmacy setting resources, structure, supplier as well as client behaviors of the method of care, and wellbeing results of that pharmacy (Kelly Rogers, 2015)
A chemical or mixture of substances used to repair, correct, or modify physiological functioning by the action of pharmaceutical, immunological, or metabolic mechanisms (European Medicines Agency, 2021)
Constitution of the Socialist Republic of Vietnam (1992) amended and supplemented that the definitions of medicinal products, it is a substance or mixture of substances used for human use for the purpose of disease prevention, treatment, diagnosis or adjustment of
13 physiological functions of the body, including finished medicinal products, medicinal ingredients, vaccines and medicinal biological products , except for functional foods Medicinal products are also known as products of biological origin used for the prevention, treatment and diagnosis of diseases in humans Medicinal ingredients are substances that participate in the composition of products in the process of medication production A pharmaceutical substance (also called a molecule) is a substance or mixture of substances with therapeutic activity used in the manufacture of medicines Medicinal products are drugs that have gone through all stages of production, including packaging in final packaging and labeling (Christopher Paciullo, 2015)
Order processing is the workflow from when a customer places an order until the order is delivered This includes product picking and batch picking, sorting, packing, tracking, and shipping and fulfillment (Joshua Weatherwax, 2014) Order fulfillment is an important part of order fulfillment that occurs on the commercial side after a customer has placed an order It begins when a company receives an order and ends when the order is shipped Various aspects of inventory management, including batch picking, as well as inventory shipping, packaging and sorting, are covered by the order fulfillment process Depending on the size and characteristics of the business, order fulfillment can be done by one person or it can take place in fulfillment operations such as distribution centers or warehouses By efficiently and accurately managing order processing, companies can reduce the time it takes to fulfill customer orders (Sara Heegaard, 2021) According to Davenport and Short (1990), is a collection of logically connected actions taken to accomplish a certain business objective In addition, they contend that a process has two key attributes: it involves both internal and external clients, and it transcends organizational operational boundaries (Davenport and Short
1990 p.12) The ordering process, which focuses on fulfilling outside consumers and immediately actually contributes in a form that the buyers acknowledge, is one of the key industrial procedures (Ould, 1995)
2.1.4 Failure modes and effects analysis (FMEA)
2.1.4.1 Definitions of failure modes and effects analysis (FMEA)
FMEA is a proactive risk management tool for determining the potential failure modes of a system, process, product, or service, examining the causes and effects of the failures, and
14 eliminating or lowering the most severe ones by suggesting risk mitigation measures (Stamatis 2003) When criticality analysis is involved, it is also known as failure mode, effect, and criticality analysis (FMECA) The US military created the FMEA in the 1940s as a reliability analysis tool, and NASA began utilizing it for project safety and quality improvement in the 1960s It developed into a formal, step-by-step process to quantify the risk of failure modes, enabling a company to prioritize putting corrective measures in place (Liu et al 2013) An improvement in system safety and dependability can be achieved by identifying probable system failures, examining their origins, impacts, and current control mechanisms, and then suggesting a risk reduction strategy The risk assessment is typically carried out by a multi-institutional expert group made up of individuals with various backgrounds and qualifications in order to be effective (Chin et al 2009) Due to its visibility, simplicity, and value in risk mitigation, FMEA has currently been widely adopted by researchers and practitioners in a range of industries (Stamatis 2003; Liu 2016)
2.1.4.2 Benefits of failure modes and effects analysis (FMEA)
FMEA is a tool to help engineers design a reliable, secure system secure and popular with users by (Connie, 2008):
- Specify product specifications to minimize errors potential errors and the severity of these errors
- Evaluate the requirements of users and all participants project to ensure that those requirements will not create additional potential errors
- Identify specifications that may produce potential risks in order to eliminate them or at least, to minimize their consequences
- Develop product testing methods and procedures to know make sure that potential errors have been eliminated
- Monitor and resolve potential design flaws
- Predict the consequences of errors that may arise in the process perform
FMEA shortens the time spent analyzing possible issues with a design idea and prevents important project components from being overlooked Each FMEA is updated with unexpected failure modes, and as a result, it provides the foundation for the design of the following generation Increased capacity to transfer relevant data from one project to the next may result in a reduction in process development time, which may promote duplicability and reproducibility throughout the system (Deborah & Smith, 2009)
2 1.4.3 Types of failure modes and effects analysis (FMEA)
There are two main types of failure modes and effects analysis (FMEA) which are:
To validate the established design parameters for a certain functional performance level at the system, subsystem, or component level, this sort of FMEA aims to identify and prevent failure modes of products that are related to their design The primary goal of this kind of FMEA is to identify potential failure modes during the early stages of design development in order to eliminate their effects, choose the best design option, and create a documentation base to support future designs in order to reduce the likelihood that customers will receive defective products (Kapil & Shobhit, 2018)
FMEA process is a safety assessment that looks at likely failure modes caused by errors in the manufacturing or assembly process There are two types of process FMEA: Manufacturing FMEA, which focuses on the overall process, and Assembly FMEA, which focuses on the assembly process Failure modes in manufacturing can often be categorized by dimensions or visual aspects Often these are relationship dimensions, missing parts, and incorrectly assembled parts in an FMEA assembly (Kapil & Shobhit, 2018)
Below is an overview of the types of FMEA:
Figure 2-1.Types of FMEA (Source: Kapil & Shobhit, 2018)
Thereby, this thesis will apply DFMEA to detect potential design risks of components before they can have a significant impact on order processing procedures through identifying failure types, prioritizing failure modes and propose some solutions for BuyMed company to mitigate order processing risks of retail pharmacies before it is officailly used
1.4.4 Risk Priority Number (from Failure Modes and Effects Analysis)
Andres et al (2020) reported that Risk Priority Number is provided by FMEA using three criteria (RPN) The severity, incidence, and detection rankings are multiplied to arrive at this risk priority number The more important it is for an organization to address a failure mode, the higher the RPN should be Three variables are taken into account by the traditional FMEA technique to describe each failure mode
The following is formula RPN is:
• Severity (S): a measure of how seriously a failure condition affects system performance
• Frequency of Occurrence (O): This gauges how frequently a failure mode takes place The failure rate, which may be described as the frequency with which a structural frame or element risks, represented in errors per time unit is connected to this risk factor
• Detectability (D): This gauges how easily a certain failure may be discovered before it occurs
The table below refers to categories and ratings of the factors S, O, D:
Table 2-1 Traditional ratings for factors S,O,D (Source: Andres et al 2020)
Rating Severity (S) Frequency of Occurrence
10 Hazardous without warning ≥1 in 2 Absolutely impossible
9 Hazardous with warning 1 in 3 Very remote
8 Very high Operation 1 in 8 Remote
7 High Operation 1 in 20 Very low
4 Very low Performance 1 in 2000 Moderately high
2 Very minor 1 in 150,000 Very High
Related studies
Table 2-2: Summary of some related previous studies (Source: From study of the author)
No Authors Research studies Research Methods Research objectives and results
Using failure mode and effects analysis to plan implementation of smart i.v pump technology
These methods included (1) conducting reviews of pump programming to assess utilize of the medicate libraries, adjust understanding profiles, channel names, and tubing situation, (2) checking of obligatory end-user preparing, and (3) checking and recording all i.v pharmaceutical organization occasion reports and casual and formal complaints
, a research method was used in this study to apply FMEA analyses to risks in various phases of applying the new technology, identify failure modes, find quality flaws with a high RPN index then create and recommend the improvement techniques before its officially published
- The objectives of this research are to use DFMEA to identify the potential risks in the medical use procedure in the application of new smart I.V pump technology, rank the failure modes by calculating RPN and propose recommendations to mitigate risks before the new technology is widely applied
- Thirteen of the 18 failure modes detailed in hone after pump and doled out a chance need number The group categorized arrangements into five categories related to the work system16: (1) arrangement and strategy, (2) preparing or instruction, (3) environment, (4) individuals, and (5) technology computer program or equipment alter
2 Pattnaik (2015) Design Failure Modes DFMEA is conducted to - The targets of this investigate are to utilize DFMEA
No Authors Research studies Research Methods Research objectives and results
And Effects Analysis (DFMEA) Of An All- Terrain Vehicle identify and address potential design risks that could occur in a system, then analyze the effects, causes of failures by ranking the failure modes via RPN calculation and find ways to mitigate them before they happen to decide the potential risks within the roll cage and outline for terrain vehicle, rank the disappointment modes by utilizing RPN at that point suggest the arrangements for those failure modes to progress the method some time recently its broadly utilize
-According to the study's findings, Sort RPNs in descending order (1) Auxiliary disappointment; bowing and breaking of outline got the highest RPN420, (2) Bowing, breakage, splits, auxiliary harm and mechanical disappointment which RPN= 392, (3) Mechanical disappointment, Spilling of liquid, Extricating of Carry nut which RPN15, (4) Breakage due to auxiliary disappointment which RPN(0 and (5) Basic disappointment, twisting and breakage made up 270 in RPN
Application of Design Failure Modes and Effect Analysis (DFMEA) to Vertical Roller Mill Gearbox
DFMEA is a way to analyze problems that may happen and how they will affect the system during the design process This is a clear way to find out the different ways something might go wrong, figure out how it will affect how the system works, decide which steps to take first to reduce risk
- The research aim to utilize DFMEA to supply plausible causes of disappointment, levels of impacts of disappointment and remedial actions to be taken within the plan stage for BevelPlanetary Vertical Roller Process Gearbox
- According to the study's findings, Sort RPNs in descending order (1) Design error got the highest RPN= 512, (2) Raw material quality which RPN= 352, (3) Manufacturing or assembly error which RPN9, (4) Mechanical overload which RPN4 and (5)
No Authors Research studies Research Methods Research objectives and results using a formula (RPN=SxOxD and assess the plan to make sure it's designed well
Insuffiencient lubrication made up 105 in RPN
Application of failure mode and effects analysis (FMEA) to improve medication safety in the dispensing process – a study at a teaching hospital, Sri Lanka
- Two separate groups of pharmacists which is called Team A and Team B who did an DFMEA (Design Failure Mode and Effects Analysis) for two months in the Pharmacy Department of a chosen teaching hospital in Colombo, Sri Lanka Each team had five meetings, each lasting two hours During these meetings, they examined how the process of dispensing and related activities were carried out They also identified potential risks, effects, and what caused them Each failure mode was given a score for how bad it could be which are called Severity (S),
- The objectives of this research are to use DFMEA to determine the potential risks in the medication distribution process, rank the failure modes by using RPN then recommend the solutions for those failure modes to improve the process before its widely use
- Team A found 48 risks that could go wrong, while Team B found 42 potential risks Out of the 90 failure modes in total, 69 were the same for both groups Team A focused on 36 failures could go wrong, while Team B focused on 30 ways things could go wrong, based on their assessment of severity Both teams found that the dispensing counters being too crowded was the reason for 57 things going wrong The main suggestions for improvement were to redesign dispensing tables and labels, improve the processes for dispensing and repacking medications, and create a unit for counseling patients
No Authors Research studies Research Methods Research objectives and results
Occurrence(O), Dectection (D) Risk Priority Numbers (RPNs) were determined using a formula (RPN=SxOxD), and the failure modes that were found were ranked accordingly
Design Failure modes and effects analysis (DFMEA) procedure
After reviewing the previous studies shown above, this theis will follow the DFMEA process which is mentioned in 7 basic steps and the explanation for each step will be conductedted in the flow chart below
Figure 2-2 DFMEA flowchart (Source: Pattnaik, 2015)
This process above including 7 steps worked well in implementation of DFMEA
Here is a brief explanation of the 7 steps included in this DFMEA process:
• Step 1: In order to perform an assessment of any project or system, it is important to review all of the subsystems and their components This can help identify any potential risks with that project or system Thus, consider potential mechanisms of failure for each component which listed the impact of each component's likely failure on every subsystem
• Step 2 Based on real data or estimates, the DFMEA team identifies failure effects, failure modes and failure causes
• Step 3 For each impact, the FMEA team determines their severity (S) and rank (for points) them
• Step 4 For each impact, the FMEA team determines their occurence (O) and rank (for points) them
• Step 5 For each impact, the FMEA team determines their detection (D) and rank (for points) them
• Step 6 Determine the RPN failure modes
• Step 7 Create a plan of action to deal with the worst RPN and make necessary corrections After performing the actions, the scores of S, O, D of the risks are is expected to decrease The DFMEA team recalculates these values as well.as the RPN value.
Interview techniques
According to Morgan (2016), the goal of an in-depth interview is to gain a richer, more in-depth grasp of the subject under discussion They typically include an anthropological approach and are a supplement to approaches like participant observation or action research
In-depth interviews allow the researcher to delve deeply into a participant's experience, behavior, feelings, and attitudes to uncover underlying concepts and develop a theory about the research issue Since the researcher will guide the conversation and it is less likely to feature stories or personal histories, in-depth interviews are more structured than narrative interviews In-depth interviews, as opposed to semi-structured interviews, do, however, give the participant a lot more freedom to speak freely and to give more thorough details When conducting in-depth interviews, interviewers occasionally avoid disclosing all the specifics of the research hypothesis since doing so might lead or affect the qualitative data gathered Instead, as part of recruitment and consent, the general area of interest is explained to the participant, and the interviewer then directs the interview based on the answer (Morgan, 2016)
According to Morgan (2016), focus groups are a type of group interview with the objective of recording participant interaction depending on subjects provided by the researcher The primary goal of focus group research is to elicit a level of attitudes, feelings, beliefs, experiences, and reactions from respondents that would not otherwise be accessible when utilizing techniques like observation or interviewing Although these attitudes, sentiments, and beliefs may be in part independent of a group or its social context, focus groups' social interaction and gathering make them more likely to be exposed Focus groups are especially helpful when there are power imbalances between the participants and decision-makers or professionals, when it is interesting to learn about the linguists and cultures of particular groups, and when one wants to find out how much agreement there is on a particular subject Due to these factors, it's crucial to employ a specific interview guide and to make sure that the participants have a certain expertise with or viewpoint on the subject at hand (Morgan, 2016)
Supporting tools
In addition to the application of FMEA, the ressearch content needs to use more other supporting tools to assist in the process of statistics and data analysis Today, the list of tools used in the quality field is very diverse form because quality professionals tend to apply techniques from other sectors In addition, the use of quality tools is abundant due to the need to apply to different situations, at different macro and micro levels of an organization Each tool has its own intended use, so it is necessary to consider the situation different situations when deciding to adopt a tool Basic quality tools are used to identify and analyze processes separate process and often produce numerical data (Hung & Loan, 2010) including: flowcharts, cause-and-effect diagrams, Pareto diagrams, checklists, control chart, histogram, scatter chart
Fishbone diagram, systematic questioning technique - 5W1H, focus group and in- depth interview are three basic quality tools used in this research
CURRENT PROBLEM IN THE ORDER PROCESSING OF RETAIL
Overview of BuyMed Company
Buymed PTE is a pioneering e-commerce platform specializing in the distribution of health care products including medicines, supplements, cosmetics and medical equipments As the connection between pharmaceutical manufacturers, distributors and pharmacies in Vietnam which is a young company set to revolutionize healthcare in Asia (BuyMed, 2018)
BuyMed is a pharmaceutical distribution company with two distribution segments: wholesale distribution such as in Vietnam supply of medicinal products for about 1000 pharmacies, 300 pharmacies being distributed abroad, retail distribution namely pharmacy retail establishments, private clinics (BuyMed, 2018)
One of the ways to expand the business is to drug companies with a long-term and sustainable drug distribution source like BuyMed and to increase sales, the company has opened more pharmacy branches in new locations With his passion and creativity, Mr Minh Hoang - founder of BuyMed Company is going to open the first pharmacy project, Circa, belonging to BuyMed Company company There are 2 retail pharmacies, namely a retail pharmacy and a hospital pharmacy This is an effective way to expand, increase brand coverage, and help customers access pharmacies in more locations (Circa, 2023) However, opening a new branch may be the most expensive options Finding a new location, renovating the space according to business needs, and hiring new counter staff are just a few aspects that often come to mind first In fact, the expansion of the pharmacy scale has many more complicated issues such as the potential risks of the pharmacy order processing, namely ordering, receiving and managing medicinal products Expansion of the new pharmacy network is a common expansion strategy for BuyMed Company From there, it will increase brand awareness and reach many new customers (Circa, 2023)
3.1.2 Organizational structure of BuyMed Company
The functional structure is used to create the organizational structure According to Nikhilesh Deshpande (2022), in the past pharmacists at retail pharmacies are unable to handle both project and functional operations, and it is also difficult for them to report to various supervisors at the same time due to a lack of cooperation across departments As a result, it is suggested that this structure be used as a first step to boost efficacy and give the conditions for matrix construction The devotion of the management and pharmacists is the most important factor to consider while using this chart In addition, a senior manager's primary responsibility is to synchronize departments The first and most efficient approach to use this chart is to define the needed protocols for departmental communication (BuyMed, 2022)
The following is the BuyMed company organizational structure and the retail pharmacies organizational structure covered by the dashed line:
Head of channel development Category Team
Growth Team Operations Team Head of Engineering
Talent Acquisition Lead Logistic team Warehouse team
HR team COO Operations General
Firgure 3-1 The organizational structure at BuyMed company (Source: From study of the author)
3.1.3 The order processing of retail pharmacies at BuyMed Company
Order processing of pharmacy franchise systems and new design order processing of retail pharmacies comparision:
The ordering process at the franchise pharmacy system is quite simple and includes 4 steps:
Step 1: The pharmacy belonging to the Circa franchise chain will make an order and send it to BuyMed company
Step 2: After the prescribed time for placing orders ends, the company will collect all orders from pharmacies and send them to the warehouse to check inventory and quantity of drugs
Step 4: If there is no medicine available in stock, BuyMed will notify that pharmacy to save this product until it is available to ship later, or will notify that pharmacy to cancel the order if there is no available source medicine and let that pharmacy find this medicine at other suppliers If there is an available supply of medicine in BuyMed's warehouse, create a shipping order
The ordering process at the retail pharmacies are more complex in order to control and manage the incurred problem existed during the process which included 15 steps and shown below:
New design order processing of retail pharmacies:
Order processing is a multi-step process that assists the pharmacy in monitoring certain medicinal products, source selection, pricing comparisons of formulary medicinal products and generic medications, group buying, locating wholesale vendors, purchasing procedures, record-keeping, and receiving and it also rapports inventory management (Alexandra Unfried, 2022) The following is the procedure of order and receive processing of retail pharmacies at BuyMed company that the author learned through working directly at the pharmacy with store manager- Dung Pham pharmacists under the direction of project manager- Nikhilesh Deshpande to finalize the design this order processing
Circa retail pharmacy places an order
Update quantity information on the system
Medicines delivered to retail pharmacy
Awaiting re-stock from BuyMed warehouse
Firgure 3-2 Order processing of of retail pharmacy at BuyMed Company (Source: BuyMed, 2023)
Generate PO from winning price quotation
This process above including 15 steps worked well in assisting a group of people in dealing with a difficult risks regarding medicine delivery for retail pharmacies
Here is a brief explanation of the 15 steps included in this order processing of retail pharmacy from BuyMed Company:
• Step 1: When retail pharmacies have a need to buy medicinal products in large quatities, the first thing to do is to send a request to the purchasing department at BuyMed company, in order to make purchases to meet production and business needs Usually these requests are approved by the department head or person in charge
• Step 2: After the pharmacy sends the order list to the BuyMed warehouse via the software system, the warehouse staff along with the purchasing teams will check whether the number of products in the warehouse is enough with the required quantity that retail pharmacy is in needs
• Step 3: When BuyMed has checked that the warehouse has a sufficient quantity of medicinal products, it proceeds to make a purchase invoice, on the purchase invoice including the information of the quote, payment terms as well as the delivery schedule
• Step 4: After medicinal products are released from the warehouse, information will be updated to the management system (manual, software, ) so that the management department can understand reports on the amount of medicinal products exported, imported, and in stock
• Step 5: After transferring the PO to related departments for tracking, the warehouse department will monitor the packaging process
• Step 6: After packing the medicinal products, logistic team at BuyMed contact the Thuocsi delivery service to deliver the product directly to the customer's home
• Step 7: Delivery of the medicines is processed
• Step 8: In the case when the BuyMed warehouse does not have enough medicinal products that the retail pharmacy requires, there will be 2 cases If the retail pharmacy order is not urgent, they will wait for BuyMed's re-stock within 2-3 days and if the retail
32 pharmacy agrees, the next process will be the same as steps 3, 4, 5, 6, 7
• Step 9: In case the pharmacy needs urgent medicinal products, they must find another supplier
• Step 10: And if the supplier is identified, then it is necessary to identify the quantity of the medicines source in accordance with that supplier's requirements and submit a request for PO for approval
• Step 11: If the PO is not approved, the process will have to follow the steps in the order 8, 3, 4, 5, 6, 7
• Step 12: If the PO is approved, the medicine order list will be sent to the vendors on BuyMed's system
• Step 13: The suppliers that BuyMed works with will bid on this medicine list, and the supplier with the most favorable quote wins
• Step 14: After that purchasing team generates PO from winning price quotation and creat PO invoice
• Step 15: Those winning suppliers will pack the order themselves and deliver it to the ThuocSi delivery service and then the delivery of the medicines is processed
DFMEA METHOD APPLICATION FOR ORDER PROCESSING OF
Application of DFMEA method for order processing of retail pharmacies
After analyzing the order processing situation of retail pharmacies at BuyMed Company, the company's management decided to carry out a risk assessment of the order processing to correct failures in the process and maintain the reputation of the company According to Tran Dinh Vu (2014), to ensure that all potentially influential factors are considered, it is essential that must establish a risk assessment team, which is also the first step of DFMEA Members must be knowledgeable about professional work, directly related to the issues quality that the company is experiencing They must have enough experience, knowledge, skills expertise in medicinal products and project and process management, and enough time to work collaboratively (Dinh Vu, 2014) On that basis, a group of 9 members was formed from departments with the list as in Table 4.1:
Table 4-1: List of risk assessment team members (Source: From study of the author)
No Name Position Year of experience
1 Nikhilesh Deshpande Project Manager 40 years
2 Dung Pham Store Manager 8 years
3 Thuy Hoang PO Manager 6 years
4 Sang Nguyen Assistant Store Manager 5 years
5 Tu Nguyen Project Assistant 2 years
6 Huy Nguyen Seller Center 5 years
7 Khoi Ngo Pharmaceutical Sales Representatives 5 years
Risk assessment team members introduction:
- Nikhilesh Deshpande (Project Manager): Having 40 years experience in managing parts of the project and monitoring and measure project progress as well as group micromanagement regarding pharmaceutical products Invited by the company to be a consultant on the quality control system and operating procedures of medicinal products
- Store Manager ( Dung Pham): Having 8 years of experience in being responsible to the Area Manager and the Board of Directors of the Pharmacy System for the sales consultancy of Pharmaceuticals, dietary supplements, Pharmaceutical cosmetics and consumables and store management Manage and arrange the working shift of the Sales Pharmacist at the pharmacy Actively monitor import and export products, propose orders Management of medicinal products, money, cleaning, assets and equipment at sales pharmacist training stores, sales consultants at drug stores Introduce, advise, guide how to use drugs for customers Manage the arrangement of medicinal products display and customer care at the drug store
- PO Manager ( Thuy Hoang): Having 6 years experience in analyzing and orienting product development & managing product feature categories (Product Backlog) Take full responsibilitíe in determining the priority order of each item to be completed as required, monitoring and evaluating each stage of product development Besides, anticipating and capturing customer needs by connections between stakeholders and customes Addionally, attending meetings and provide full information to the Scrum team
- Assistant Store Manager (Sang Nguyen): Having 5 years experience in helping store manager in preserving and controlling inventory of expiry date and condition of products to have a plan for handling expired, damaged or unqualified medicinal products Receive prescriptions from doctors, prepare drugs according to customers' requirements, guide customers to use drugs rationally, according to the doctor's instructions Responsible for asset management, sales at the drug store, having a plan to prevent loss of products and making weekly/monthly/quarterly/yearly inventory reports to the board of directors
- Project Assistant (Tu Nguyen): Having more than 2 years experience in acting as the point of contact among executives, employees, clients and other stakeholders to manage information flow in a timely and accurate manner Besides, maintain and monitor the daily progress of projects to ensure team members have the supplies and resources
35 needed to complete their assigned tasks on time and within their budget limits Additionally, manage Circa retail pharmacies which help pharmacists source products directly from BuyMed Company and deliver medicines directly to customers’ home
- Seller Center (Huy Nguyen): Having more than 5 years in proactive observation & coordination with other internal teams to identify business operation risks of struggling sellers, investigate to find out the root causes, and propose solutions Market research/ benchmarking analysis to evaluate the feasibility of proposed solutions Evaluate business metrics, deliver effective presentations of findings and recommendations, and create a visual display of quantitative information to seek approval from high-level management Work with stakeholders to plan & implement, conduct necessary analysis to drive and optimize projects
- Pharmaceutical Sales Representatives ( Khoi Ngo): Having more than 5 years of experience in introducing company images to customers Fully and effectively implement programs, policies and information from the company to customers Plan and execute sales activities and offer the company's cosmetic and pharmaceutical products, cosmetic equipment to Hospitals, Clinics, Spas according to the assigned route Introduce, advise and convince customers to buy products as well as maintain old relationships, develop and expand new relationships Pharmaceutical Sales Representatives also takes full responisibility in collecting and providing information on competitive products, making proposals for direct management on sales and marketing policies then report business results to superiors
- Pharmacists ( Thy Tran & Thuy Diem): Having more than 3 years of experience in managing and preparing medicinal products, dispensing to customers according to prescriptions; Record keeping, manage records; Check-in products, record and store books and documents properly and sufficiently according to the process; Check the daily inventory and record the quantity, estimate the products to be replenished, ensure the products are supplied to the hospital; Perform a number of other administrative tasks as assigned; Manage batch/date medicinal products and properties in the pharmacy
According to Tran Dinh Vu (2014) to implement the FMEA, a 9-member FMEA team was established Therefore, in order processing of retail pharmacies at the BuyMed company there are members namely 1 Project Manager, 1 Store Manager, 1 PO Manager,
1 Assistant Store Manager, 1 Project Assistant, 1 Seller Center, 1 Pharmaceutical Sales Representatives and 2 Pharmacists FMEA team analyzed the procedure of order processing of retail pharmacies at BuyMed Company and identified 20 failure modes occurs at 9 stages of this process
The interview time last from 15 to 20 minutes The author let each person evaluates, scores and shows it to everyone to discuss the result If they agree with this result, then save the score and if there is an adjustment, discuss in group and all member finalize the decision together then give a common result The content of the interview regarding three main issues (Dinh Vu, 2014):
• What types of potential risks often occur at each stage of order processing?
• What is the effect of each potential risk on order processing?
• What causes these potential risks?
Principles of summarizing interview results:
• If the opinions of members in the same department are the same, the interview results will be recorded in the final summary table (Dinh Vu, 2014)
• If the opinions of members are not similar or contradictory, conduct an interview with another project manager, the project manager's opinion will be the final result (Dinh Vu, 2014)
The results of initial interviews with team members at retail pharmacies and at BuyMed are recorded in Table 4-2
Table 4-2 Summary the opinions of members regarding the potential risks in order processing (Source: From study of the author)
Opinions Potential risks Effect Cause
Lost in counting and checking or ordering incurred products
Failures to list all medications
Impact on other omissions from medical records
Lack of ordering medication administration devices
Order request form lost due to sending in sheet by sheet
Order quantity is not enough
Send purchase order directly through the supplier without saving it on the software
Issue a order requested after receipt of an invoice
Affects the payment of medications that are not ordered but still have to be paid because invoices are issued
Losing control in placing orders with multiple suppliers
Shortages of speciality pharmaceutical s and prescription medicine
Some speciality pharmaceutical s is informed that no longer available due to lacking of appropriate tracking equipment Product picked with wrong and duplicated
Impact the order requirement of retail
Opinions Potential risks Effect Cause
Problem in medical records errors
Update stock quantity after input error
Impact on the requirements of the customers
Received near-expired and expired products when purchasing products from wholesaler at the market
Affect cost of goods sold and company's reputation
Large quantity of products purchased from wholesale market, have different date, cannot control the date check
Low profit margin due to higher cost of goods sold
Without long- term cooperation with suppliers, it is difficult to negotiate good prices Thuy
Negotiate and determine the quantity from other vendors
Do not have enough the amount of medicinal products required
Impact on healthcare process, not timely delivery
With a large number of small suppliers can not meet large quantities as well as some brand name medicine is no longer available
Opinions Potential risks Effect Cause
Medications are out of stock unexpectedly
Failure in medical records management
Impact on the reconciliation of accounting books
Buy medicine at a wholesale market or other vendors, they are retailers, so there is no invoice
Wrong labeling of pharmaceutica l packaging
Do not check the product code carefully before packing
Printing wrong code on pharmaceutica l packaging
Packing or producing 2 codes products at the same time
Medicinal products are broken and degraded due to poor packaging
Products are jolted and broken
Utilize packaging that is inappropriate for pharmaceutical products
Affect the quality of the medicinal products due to delay in delivery
There is a wrong schedule for the delivery
Wait longer to receive the orders
After receiving 18 comments on the the potential risks of order processing from the members in related departments, the risk assessment team found no disagreements same or opposite, in which 3 potential risks have been corrected and do not happen anymore namely: Wrong order, failures to list all medications, order request form lost due to
40 sending in sheet by sheet product picked inconsistencies The final summary results of 16 potential risks in the process are shown in the table 4-3
Table 4-3.Summary results of potential risks in the order processing (Source: From study of the author)
No Stage Potential risks Current control
Orders arise before 2pm every day, BuyMed confirmed
24 hours in advance of the same day
Issue a order requested after receipt of an invoice
Check that employees must issue POs before issuing invoices
Shortages in inventory Mitigate the errors in warehouse
Product picked with wrong and duplicated SKU
Double-check the code when proceeding next steps
Problem in medical records errors
Double check the code when entering the system
Process control so as not to be late delivery or ask to find other vendors
Received near-expired and expired products when purchasing products from wholesaler at the market
Ask vendors to check the products before paying
Volatility in price Find other vendors can negotiate good prices
6 Negotiate and Do not have enough the amount Check which vendors
No Stage Potential risks Current control determine the quantity from other vendors of medicinal products required have the required order quantity
Medications are out of stock unexpectedly
Put in Product Backlog list and wait for the next orders
7 Bidding and price quotation Orders cannot issue an invoice Find vendors can issue an invoice
Wrong labeling of pharmaceutical packaging
Write the product code on the carton before stamping
Printing inconsistencies on pharmaceutical packaging Check label printing Medicinal products are broken and degraded due to poor packaging
Check the package before handing it over to the carrier
Delay in delivery Double-check the delivery schedule
Backorders Anticipate the order demand
Table 4-4 Potential risks of the order processing and current control (Source: From study of the author)
No Stage Potential risks Current control
Orders arise before 2pm every day,
24 hours in advance of the same day
Issue a order requested after receipt of an invoice
Check that employees must issue POs before issuing invoices
Find other vendors or mitigate the supply chain errors
Product picked with wrong and duplicated SKU
Double-check the code when proceeding next steps
Problem in medical records errors
Double check the code when entering the system
Awaiting re-stock from BuyMed warehouse
Process control so as not to be late delivery or ask to find other vendors
No Stage Potential risks Current control
Received near-expired and expired products when purchasing products from wholesaler at the market
Ask vendors to check the products before paying
Volatility in price Find other vendors can negotiate good prices
Negotiate and determine the quantity from other vendors
Do not have enough the amount of medicinal products required
Check which vendors have the required order quantity
Medications are out of stock unexpectedly
Put in Product Backlog list and wait for the next orders
Orders cannot issue an invoice
Find vendors can issue an invoice
Wrong labeling of pharmaceutical packaging
Write the product code on the carton before stamping
Printing inconsistencies on pharmaceutical packaging
Medicinal products are broken and degraded due to poor packaging
Check the package before handing it over to the carrier
9 Medicine delivered Delay in delivery Double-check the delivery schedule Backorders Anticipate the order demand
According to Table 4.4, most of the current 16 potential risks control is done only at the level of checking stages in the order processing, which does not reduce potential risks but also increases manpower and control costs Therefore, it is necessary to take measures to control the root causes of potential risks to mitigate the occurrence of potential risks and save costs for product quality inspection
4.1.3 Setting up the standard table S, O, D
Action implementation for improvement
Methods to improve the 4 potential risks with high RPN will be proposed solutions by the risk assessment team based on these criteria: Delivery time, Supplier relationship management, Price fluctuation management, Order commitment from customers Presented briefly in table 4.12 The categories of man, machine, method, material, measurement, and environment are included in the 5M1E Fishbone diagram that is shown below The author can spot poor situations which is existing in the order processing of Circa retail pharmacies after risk assessment team brainstorms using the 5M1E Fishbone diagram
Table 4-12: Plan of action implementation for improvement (Source: From the study of the author)
No Potential risks RPN Action improvement
810 Make a fishbone diagram and Weight calculation for each causes based on 4 criteria to propose solutions
2 Medicinal products broken and degraded due to poor packaging
540 Make a fishbone diagram and Weight calculation for each causes based on 4 criteria to propose solutions
420 Make a fishbone diagram and Weight calculation for each causes based on 4 criteria to propose solutions
No Potential risks RPN Action improvement
392 Make a fishbone diagram and Weight calculation for each causes based on 4 criteria to propose solutions
After calculating the RPN, there are 4 potential risks which have the highest scores among 16 risks namely Volatility in price, Medicinal products broken and degraded due to poor packaging, Shortages in inventory, Delay in delivery
The following is a summary of the comments using brainstorming method which is represented by risks assessment which is asked for a short meeting and gathered the participants in this small meeting for giving opinions for the causes of the above 4 - high RPN potential risk Using rules that remove inhibitions, people are able to think more freely and move into new areas of thought, thus generating new ideas and solutions Participants capture ideas as they happen to them and then build on the ideas presented by others All ideas are noted down and not criticized Only when the brainstorming session is over will the ideas be evaluated The Brainstorming method will demonstrate each of the above problems and based on this method will create a fishbone diagram following by the 5M1E method for each of the above risks
Order processing of retail pharmacies at
Using temporary method with no permanent planning
Expired stock/ stock take/ multiple orders
There is no specific plans set out
Demand the customers’ orders with temporary and quick solution No restock
High orders at difference time which can not anticipate
Demand the customers’ orders with temporary and quick solution
Pharmacists orders medicines from temporary suppliers
Using temporary method with no permanent planning
Increase in product demand/ no enough quanity requested
Backlogs Late in setup time
Staff did not pack products carefully
There is problem with shipping route
Medicinal products broken and degraded due to poor packaging
Bad weather or problem in delivery route
Failure in estimation of delivery schedule
Large backlog products Due to bad weather
Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit
The website has not updated the successful delivery status
Poor documentation/ instruction in packaging
The complaint of store manager/ pharmacists
4.2.2.1 5M1E Fishbone diagram analysis for Volatility in price
Figure 4-2 5M1E fishbone diagram- Volatility in price
Pharmacist orders low quantity from various suppliers
Online working leading unobvious retail suppliers
Demand the customers’ orders with temporary and quick solution
Poor documentation/ App ordering for checking price
Using temporary method with no permanent planning
Increase in product demand/ no enough quanity requested The % margin of profit will fluctuate and the low % margin due to changes in price very frequently
4.2.2.2 5M1E Fishbone diagram analysis for Medicinal products broken and degraded due to poor packaging
Figure 4-3 5M1E fishbone diagram- Medicinal products broken and degraded due to poor packaging
Poor documentation/ instruction in packaging
Damaged products Returns due to insecured package delivery box
There is no training regulation for pharmacists in packaging
Damaged products Returns due to insecured package delivery box
Poor documentation/ instruction in packaging
Medicinal products broken and degraded due to poor packaging
4.2.2.3 5M1E Fishbone diagram analysis Shortages in inventory
Figure 4-4 5M1E fishbone diagram- Shortages in inventory
Expired stock/ stock take/ multipleorders
High orders at difference time which can not anticipate
There is no specific plans set out
Using temporary method with no permanent planning/report
Online working leading medicine shortages
Using temporary method with no permanent planning/report
Expired stock/ stock take/ multipleorders
High orders at difference time which can not anticipate
4.2.2.4 5M1E Fishbone diagram analysis delay in delivery
Figure 4-5 5M1E fishbone diagram- Delay in delivery
4.2.3 Identify important causes by using Weighted scores
After the 4 potential risks mentioned are Volatility in price, Medicinal products broken and degraded due to poor packaging, Shortages in inventory, Delay in delivery which is based on 4 criteria Delivery time, Supplier relationship management, Price fluctuation management, Order commitment from customers and causes are shown in the 5M1E fishbone diagrams The causes of 4 potential risks listed in the fishbone diagram will be weighted by scoring the causes from 1-10 and the 4 criteria from 1-4 and each cause will be multiplied by the weight of each criterion to calculate the importance of each
Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit
There is a problem with the shipping route
Delay in medicine delivery packed
Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit
Managerial conflics in terms of medicines between logistic and pharmacy
The product control work is not guaranteed, causing orders to be wrongly delivered or lost.
Large backorder of products Large backlog of products
59 cause and the causes with high scores will be decided to propose solutions Weights help make calculation results more accurate and fair, reflecting the true importance of each type of cause
Score Calculation method for causes:
Causes of the 4 potential risks with high RPN index are listed, then let team members scores from 1-10, with 1 being the lowest and 10 being the highest Each cause will be evaluated based on the 4 criteria previously set out from 1 to 10 then shows it to everyone to discuss the result If they agree with this result, then save the score and if there is an adjustment, discuss in group and all member finalize the decision together then give a common result
Weighted scores calculation method for 4 criteria:
There are a total of 4 criteria and the risk assessment team has decided to score these
4 criteria from 1-4 with 1 being the lowest score and 4 being the highest score, each person in the team evaluates for themselves which criterion is the score Gradually, the scores of all members will be added together and divided by an average to get a weighted average Below is a table summarizing the weights of the 4 criteria and the score table of the causes How to calculate the average score based on the scoring of group members is shown in the Appendix
Table 4-13: Average weighted scores of 4 improvement criteria (Source: From the study of the author)
4.2.3.1 Weighted scores of Volatility in price causes
There are a total of 7 causes in Volatility in price risk The following is an assessment of the level of each cause's impact on the 4 criteria The risk assessment team will rely on 4 criteria to evaluate each cause according to a band score from 1 to 10 with 1 being the lowest impact and 10 being the strongest impact The risk assessment team has decided to
60 select causes with a total weight greater than 50 that will be decided as important causes and will be proposed solutions
1 Pharmacist orders low quantity from various supplier:
- Delivery time: Placing minor orders with various providers might result in scattered supplies Each supplier has their own processing time, and the pharmacist must wait for each shipment to arrive When compared to aggregating orders with a single supplier, this might result in longer total delivery times Ordering from many vendors may result in greater delivery expenses since each supplier may charge a different shipping fee Furthermore, scheduling several shipments might be logistically difficult and time-consuming The pharmacist must guarantee that someone is there to receive each delivery which might add to the delays
- Order commitment from customers: When the pharmacy gets low-quantity orders from several vendors, stock consolidation becomes more challenging This can lead to fragmented inventories among several suppliers, making it more difficult to put together entire orders The requirement for several shipments and coordination raises the possibility of errors, delays, and inaccuracies in order fulfillment
- Supplier relationship management: When pharmacists place small orders with many vendors, they may have less bargaining leverage to get competitive prices or acceptable conditions Suppliers may prefer higher-volume customers and be less willing to give discounts or special arrangements to pharmacists with low-volume purchases Ordering in small quantities from several vendors might result in unexpected order patterns, making it difficult for suppliers to manage production and inventory levels This unpredictability can strain supplier resources and impair their ability to regularly satisfy the pharmacist's expectations
- Price fluctuation management: Ordering in small quantities from many vendors might result in greater procurement costs due to higher transaction fees, shipping charges, and administrative expenses The sum of these expenditures might make it even more difficult for pharmacists to efficiently control price swings Depending on the quantity of orders, suppliers may provide multiple price structures or pricing tiers When pharmacists purchase small amounts of the same
61 or comparable items from several vendors, they may experience inconsistencies in price This unpredictability might make tracking and managing pricing swings among multiple providers difficult
2 The % margin of profit will fluctuate and the low % margin due to changes in price very frequently:
- Delivery Time: A low profit margin may limit resources available for investing in efficient delivery mechanisms This can result in longer delivery times, which can have a negative impact on customer satisfaction and retention
- Customer Order Commitment: When profit margins are low, it may be difficult for businesses to offer discounts or incentives to encourage customer commitment to future orders This can lead to decreased customer loyalty and a drop in order commitments
- Management of Supplier Relationships: Low profit margins can strain supplier relationships Negotiating better terms or securing reliable suppliers may become more difficult, affecting the overall supply chain and potentially disrupting the availability of products or services
Proposed Solutions for the high causes
4.3.1 Summary of 5 causes with high weighted scores
After the causes have been evaluated by the risk assessment team based on 4 criteria, there are 6 causes with a total weight exceeding 50 and the group has decided that these 6 causes would be considered as 6 important causes and decided to propose solutions Below is a summary table of 6 causes with high weight of the 4 potential risks that need proposed solutions
Table 4-18: Summary table of causes with high weights that require proposed solutions (Source: From the study of the author)
Volatility in price The % margin of profit will fluctuate and the low % 76
Total weighted scores margin due to changes in price very frequently Medicinal products broken and degraded due to poor packaging
Damaged products returns due to insecured package delivery box 76
High orders at difference time which can not anticipate 83
Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit
Large backorder of products 68 4.3.2 Solution recommendations
After clarifying the high weight, there are 5 causes which have the highest weighted scores namely The % margin of profit will fluctuate and the low % margin due to changes in price very frequently, Damaged products returns due to insecured package delivery box, High orders at difference time which can not anticipate, Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit, Large backorder of products The following are the recommendations which is represented by risks assessment for each cause
Table 4-19 Summary table of recommendations for 5 causes (Source: From the study of the author)
The % margin of profit will fluctuate and the low % margin due to changes in price very frequently
- Increase the % margin within the allowed increase range for each SKUs
- Increase prices and include special promotions
Medicinal products broken and degraded due to poor packaging
Damaged products Returns due to insecured package delivery box
- Use delivery box for all customers in all locations within Ho Chi Minh City
High orders at difference time which can not anticipate
- Cooperate with other suppliers to stock BuyMed warehouse
Delay in the process of classifying medicines from - Documentation process optimization
BuyMed's general warehouse before handing over to the shipping unit
- No quick supply with incurred orders which can cause backorders
4.3.2.1 Improvement for causes of The % margin of profit will fluctuate and the low % margin due to changes in price very frequently
To mitigate the cause of The % margin of profit will fluctuate and the low % margin due to changes in price very frequently, the risk assessment team discussed and came up with the following solutions:
- Increase the % margin within the allowed increase range for each SKUs: Each type of product will have a different profit margin range and when the product price for each product fluctuates, those products will increase their margin % higher than the initial margin This helps avoid impacting the company's profits
- Increase prices and include special promotions: When increasing the price of products purchased at high prices, those products will be accompanied by many other attractive promotions such as free shipping within the city, or buying multiple products with a small gift, or apply discount vouchers for future purchases This helps avoid impacting the company's profits
Figure 4-6 Special promotions for high medical product prices
4.3.2.2 Improvement for causes of Damaged products Returns due to insecured package delivery box
To mitigate the cause of medicinal products broken and degraded due to poor packaging, the risk assessment team discussed and came up with the following solutions: BuyMed uses delivery boxes for all customers in the Ho Chi Minh City area The advantages of delivery boxes are to minimize damage to medicines due to bad weather and avoid breakage and damage due to collision during transportation
Figure 4-7 Cabin box for medical product delivery
Figure 4-8 Cabin box for medical product delivery
BuyMed uses cabin boxes to deliver products to customers in the HCMC area This policy is being used for the first time and is in the process of being improved, so it has not been applied to other areas
4.3.2.3 Improvement for causes of High orders at difference time which can not anticipate
To mitigate the cause of high orders at difference time which can not anticipate, the risk assessment team discussed and came up with the following solutions:
- BuyMed's general warehouse opens a reliable bridge for more than 1,000 distributors and suppliers nationwide, to provide a reliable source of products for more than 35,000 pharmacies and clinics in 685/705 districts throughout the country as the pharmaceutical industry is unique and requires high quality, every product from suppliers must be delivered to BuyMed's warehouse and go through a strict 6-step quality management process before being sent to pharmacies Specifically, the warehouse management process includes the following steps:
Step 1: Pharmaceutical products from suppliers will be received and imported into BuyMed's warehouse
Step 2: The products will be checked and counted through the machine to ensure the quantity and condition of the products and put into the warehouse
Step 3: BuyMed conducts strict quality checks on products if suspected of being fake or fake, ensuring the products meet the highest quality standards
Step 4: After quality checks are completed, the products are placed on orders by staff to arrange delivery to pharmacies
Step 5: Products will be carefully and safely packaged and ready for delivery
Step 6: Pharmaceutical products that have passed the quality inspection process will be sent to destinations such as pharmacies according to the orders
By cooperation with suppliers to stock BuyMed's general warehouse, the company will be able to cooperate with suppliers and avoid supply shortages during times when orders increase uncontrollably With increased orders and lack of products to supply, the company can order available orders from affiliated suppliers to meet the increased demand of customers
4.3.2.4 Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit
In order to help customers save time ordering and receiving products with high quality, same-day delivery policy come into operation for application in Ho Chi Minh City and Hanoi areas first then applied throughout the nation, specifically:
- For orders placed before 9am: will be delivered the same day
- For orders placed after 9am and before 11pm: can be delivered the same day
- For orders placed after 11am: will be delivered the next day
Applying the same-day delivery policy helps to ensure accurate committed time, avoiding delays in delivery to customers, thereby affecting product quality
Besides, launching a same-day delivery policy to avoid order backlogs and late delivery to customers, BuyMed also updated a new delivery policy to suit customers' need for fast delivery With this new delivery policy, many non-valued activities will be eliminated, increasing lead time due to product changeover like the previous delivery policy which is shown below:
In transit: The customer's order is being transported from the picking warehouse to the destination warehouse (not yet delivered) After the customer places an order, the order will be received and shipped by a staff member Transportation from BuyMed's general warehouse in Hanoi, Ho Chi Minh and Binh Duong to delivery hubs nationwide
Delivering: the shipping unit is delivering to the customer's address (preparing to receive the products) At delivery hubs, orders are once again carefully checked and divided into each region Next, the order will be handed over to the shipping unit or delivery staff directly to the customer In addition, BuyMed will send a ZNS Zalo message to the customer when the customer's order changes to the Shipping status
4.3.2.5 Improvement for causes of Large backorder of products
To mitigate the cause of large backorder of products, the risk assessment team discussed and came up with the following solutions:
- Demand Planning and Forecasting: Improving the accuracy of demand planning and forecasting is critical for managing inventory levels and avoiding backorders Businesses may better predict demand variations and modify production and procurement by utilizing historical data, market trends, and consumer insights to get the number of orders available in stock
- No quick supply with incurred orders: Each order batch will have its own specified time After the ordering time ends, the pharmacy will begin transferring orders to the general company or other suppliers and from there, order processing will operate and ensure order processing in the right time, right quantity and right process If pharmacists receive incurred orders from customers can cause backorders, it will affect the process and cause many risks, so choosing to refuse to supply incurred products to customers is an effective solution to reduce the impact on the process
CONCLUSION AND RECOMMENDATION
Conclusion of main findings
Through the thesis, we have generalized the current problem at BuyMed company, as well as the limitations of the improvement work and current control advancements BuyMed has operated a franchised pharmacy chain but there are potential risks in order processing that cannot be overcome Now BuyMed plans to run a project to open business pharmacies in locations such as HCMC, Vinh Long, Can Tho Therefore, to limit the risks that the franchise chain has been facing, the new order processing is designed and the DFMEA tool will identify potential risks in the process at the development stage After taking the recommended actions for the identified risks, the next step is to compare the before and after RPN values Based on the FMEA implementation process, the improvement team identified:
− Identify potential risks that need to be prioritized for improvement in order processing
− Prioritize risk using S, O, and D scores to calculate the Risk Priority Number (RPN)
− Among 16 potential risks identified and after calculating the RPN, there are 4 potential risks that have the highest scores namely Volatility in price, Backorders, Shortages in inventory, and Delay in delivery which methods to improve the 4 potential risks with high RPN will be proposed by the risk assessment team based on these criteria: Delivery time, Supplier relationship management, Price fluctuation management, Order commitment from customers and each risk is analyzed and determined causes by using fishbone diagram and weight calculation
There are 4 causes with a high weighted scores of the 4 potential risks that need to be proposed solutions to mitigate risks order processing for retail pharmacies at BuyMed Company namely The % margin of profit will fluctuate and the low % margin due to changes in price very frequently, Lead times due to product changeover, Pharmacists receive incurred orders from customers, High orders at difference time which can not anticipate, Delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit, Large backorder of products
Recommendations
- There needs to be a plan to inspect and evaluate the improvement measures from December 2023
- Training on quality and FMEA knowledge for department heads and team leaders to be able to deploy at the production stage of the department
- To improve process quality more professionally, the company needs to make changes in management and implementation methods
- The risk assessment team needs to be separated from the management of the current management level and receive direct support from the board of directors with strategic and speacific goals
- Study and apply additional quality tools and analytical techniques data into improving process quality such as 5S, Six Sigma, Kaizen, PDCA,
Limitation and Further Research
- The results of a delay in the process of classifying medicines from BuyMed's general warehouse before handing over to the shipping unit improved the risk rate but have not completely overcome the customer's wishes because there is still lead time in product changeover and the cross-check among Employees regarding product delivery schedule is not controlled to the fullest which results in 6 point in the Detection This can be explained because the testing time was too short
- The analysis of risks in the process at the delivery stage is not thorough, as evidenced by the fact that ink splatter errors are not shown in the FMEA analysis table of the process
- DFMEA focuses on identifying the potential risks in the new process which is cannot research on the current process Therefore, the current process still has hidden problems and cannot be solved
- Make improvements to the company's remaining processes: Dispensing medical products, storage and quality monitoring process, training process, pharmacy cleaning instruction process, drug destruction process subject to special control
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Appendix A: Summary table of the impact severity (S) score from each risk assessment member (Source: From study of the author)
SUMMARY TABLE OF THE IMPACT SEVERITY (S) SCORE
Scores Effects Total average scores Round number
Products are jolted and broken 9.56 10
Low profit margin due to higher cost of goods sold 8.89 9
Affect the quality of the medicinal products due to delay in delivery 8.11 8
Shortages of speciality pharmaceuticals and prescription medicine
Scores Effects Total average scores Round number
Affect cost of goods sold and company's reputation 6.33 6
Impact on healthcare process, not timely delivery 5.44 5
Affects the payment of medications that are not ordered but still have to be paid because invoices are issued
Scores Effects Total average scores Round number
Wait longer to receive the orders 4.44 4
Impact on the requirements of the customers 3.44 3
Deshpande 2 Impact the order requirement of retail pharmacies 2.44 2
Scores Effects Total average scores Round number
Impact on the reconciliation of accounting books 2.33 2
Appendix B: Summary table of the impact frequency of occurrence (O) score from each risk member assessment (Source: From study of the author)
SUMMARY TABLE OF THE IMPACT FREQUENCY OF OCCURRENCE (O) SCORE
Scores Causes Total average scores Round number
Without long-term cooperation with suppliers, it is difficult to negotiate good prices
Utilize packaging that is inappropriate 8.89 9
There is a wrong schedule for the delivery 7.22 7
Some speciality pharmaceuticals is informed that no longer available due to lacking of appropriate tracking equipment
Scores Causes Total average scores Round number
Failure in medical records management 5.44 5
Large quantity of product purchased from wholesale market, have different date, cannot control the date check
With a large number of small suppliers can not meet large quantities as well as some brand name medicine is no longer available
Buy medicine at a wholesale market or other vendors, they are retailers, so there is no invoice
Deshpande 5 Update stock quantity after input error 3.44 3
Scores Causes Total average scores Round number
Lost in counting and checking or ordering incurred products 2.00 2
Do not check the product code carefully before packing 1.78 2
Scores Causes Total average scores Round number
Packing or producing 2 codes products at the same time 2.33 2
Losing control in placing orders with multiple suppliers 1.44 1
Appendix C: Summary table of the impact detectability (D) score from each risk assessment member (Source: From study of the author)
SUMMARY TABLE OF THE IMPACT DETECTABILITY (D) SCORE
Risk assessment member Scores Current control Total average scores Round number
Risk assessment member Scores Current control Total average scores Round number
Find other vendors or mitigate the supply chain errors 9.56 10
Find other vendors can negotiate good prices 8.89 9
Find vendors can issue an invoice 7.78 8
Double-check the delivery schedule 7.11 7
Deshpande 8 Check the package before handing it over to the carrier 6.00 6
Risk assessment member Scores Current control Total average scores Round number
Write the product code on the carton before stamping 4.78 5
Orders arise before 2pm every day, BuyMed confirmed 24 hours in advance of the same day
Double-check the code when proceeding next steps 4.44 4
Double check the code when entering the system 4.11 4
Risk assessment member Scores Current control Total average scores Round number
Check which vendors have the required order quantity 4.22 4
Put in Product Backlog list and wait for the next orders 3.00 3
Check that employees must issue POs before issuing invoices 1.78 2
Risk assessment member Scores Current control Total average scores Round number
Process control so as not to be late delivery or ask to find other vendors 2.33 2
Ask vendors to check the products before paying 2.33 2
Appendix D: Summary table of average weighted score of 4 criteria (Source: From study of the author)
SUMMARY TABLE OF AVERAGE WEIGHTED SCORE OF 4 CRITERIA
Appendix E: Summary table of Average scores of Causes of Volatility in price (Source: From study of the author)
AVERAGE SCORES OF CAUSES OF VOLATILITY IN PRICE
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Pharmacist orders low quantity from various supplier
The % margin of profit will fluctuate and the low % margin due to changes in price very frequently
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Increase in product demand/ no enough quanity requested
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
App ordering for checking price
Online working leading unobvious retail suppliers
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Using temporary method with no permanent planning
Appendix F: Summary table of Average scores of Medicinal products broken and degraded due to poor packaging (Source: From study of the author)
SUMMARY TABLE OF AVERAGE SCORES OF MEDICINAL PRODUCTS BROKEN AND DEGRADED DUE TO POOR
Causes of medicinal products broken and degraded due to poor packaging
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Returns due to insecured package delivery box
Poor documentation/ instruction in packaging
Causes of medicinal products broken and degraded due to poor packaging
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
"Price fluctuation management" rushing in packaging
There is no training regulation for pharmacists in
Causes of medicinal products broken and degraded due to poor packaging
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
"Price fluctuation management" packaging Thy Tran 1 2 5 2
Appendix G: Summary table of Average scores of Shortages in inventory (Source: From study of the author)
AVERAGE SCORES OF SHORTAGES IN INVENTORY
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
High orders at difference time which can not anticipate
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Expired stock/ stock take/ multiple orders
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Online working leading medicine shortages
There is no specific plans set out
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Using temporary method with no permanent planning/ report
Appendix H: Summary table of Average scores of Delay in delivery (Source: From study of the author)
AVERAGE SCORES OF DELAY IN DELIVERY
Level of impact on "Delivery time"
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Delay in the process of classifying medicines from
BuyMed's general warehouse before handing over to the shipping unit
Level of impact on "Delivery time"
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
There is a problem with the shipping route
Delay in medicine delivery packed
Level of impact on "Delivery time"
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Level of impact on "Delivery time"
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Average score of cause impacts on
Managerial conflics in terms of medicines between logistic and pharmacy
Appendix I: Summary table result of re-evaluate Severity after solution recommendation (Source: From the study of the author)
RE-EVALUATE SEVERITY AFTER SOLUTION RECOMMENDATION
Scores Potential risks Severity Total average scores
Medicinal products broken and degraded due to poor packaging
Products are jolted and broken 3.11 3
Low profit margin due to higher cost of goods sold 3.89 4
Affect the quality of the medicinal products due to delay in delivery
Scores Potential risks Severity Total average scores
Shortages of speciality pharmaceuticals and prescription medicine
Appendix J Summary table results of re-evaluate Occurrence after solution recommendation (Source: From the study of the author)
RE-EVALUATE OCCURRENCE AFTER SOLUTION RECOMMENDATION
Scor es Potential risks Occurrence Total average scores
Medicinal products broken and degraded due to poor packaging
Utilize packaging that is inappropriate
Scor es Potential risks Occurrence Total average scores
Without long-term cooperation with suppliers, it is difficult to negotiate good prices
There is a wrong schedule for the delivery
Some speciality pharmaceutic als is informed that no longer available due
Scor es Potential risks Occurrence Total average scores
Diem 4 to lacking of appropriate tracking equipment
Appendix K Summary table result of re-evaluate Detection after solution recommendation (Source: From the study of the author)
RE-EVALUATE DETECTION AFTER SOLUTION RECOMMENDATION
Scores Potential risks Detection Total average scores
Medicinal products broken and degraded due to poor packaging
- Use delivery box for all customers in all locations within Ho Chi Minh City
% margin within the allowed increase range for each SKUs
- Increase prices and include special
Scores Potential risks Detection Total average scores
- No quick supply with incurred orders which can cause backorders
- Cooperate with other suppliers to stock BuyMed warehouse
Appendix L Answer questions from thesis committee (Source: From the study of the author)
1 Why do you choose the DFMEA for reducing risk in your business? Apply it in new process or current process?
Answer: DFMEA focuses on identifying the potential risks in the product or process at the development stage, so in order to determine the potential risks that existed in the
117 new design process, DFMEA tool is used to help identify the risks before the real application
2 Is your process the same previous process?
Answer: This thesis researches new process which is different from the previous one and before applying this new design one to new business model which is retail pharmacies, DFMEA tool is used for identifying the potential risks that are expected to occurred in this process.