Case Study in Problem Solving-The Red Cross

http://www.fda.gov/ora/frequent/letters/ARC_20060727_ADLetter.pdf

As the previous post detailed, the Red Cross has been repeatedly fined for a faulty quality system.

A comment to my inital post referred me to the FDA's website. The link above is a summary of another issue raised by the FDA and addressed by the Red Cross.

As you read it (as a Quality professional), what is being done wrong (and right) in the problem solving?