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Supplier Quality Management in FDA-regulated Industry

Supplier quality management has reached high levels of sophistication in general manufacturing industries like automobiles and computer hardware as input cost reduction and supply chain efficiency is a key profitability driver in these industries. Concepts like supplier scorecards, cost-of-poor-quality, charge-backs and cost-recovery, have matured to a great extent enabling manufacturers and suppliers to forge strong partnerships. But in the pharmaceutical and medical device industry, the constraint of complying with stringent product and process quality norms for regulatory compliance adds a unique dimension to supplier quality management. To successfully leverage the global supply base of device parts, active ingredients or inactive ingredients for staying competitive while maintaining product quality, pharmaceutical and medical device manufactures need to adopt a modern web-based quality management system that integrates the supplier quality with their internal quality process in a seamless manner. The level of collaboration should be as if supplier were a division of the manufacturer and not an outside entity.

With a robust supplier quality management system in place, manufacturers can have all supplier related information at their fingertips and can count on its accuracy and integrity. If a quality problem arises, they can determine if the affected products were produced from components purchased from a particular supplier.

Monitoring Component Quality at Source
Traditionally, manufactures get inspection records periodically or when the component lot physically arrives at the manufacturer’s premises. This severely restricts the ability to act on this data as the particular lot has already been shipped, if not already arrived. Moreover, this data then has to be manually processed for any statistical analysis for measuring quality indices making the entire process time consuming and incapable of taking any proactive action.

By instituting a web-based system that allows suppliers to enter inspection data and give manufactures' supplier quality team real-time visibility into this inspections data can allow them to focus on working with suppliers on improving process quality instead of doing data collection and reporting.

Such a system can generate quality and process capability indices and reports as the components are being inspected and are still at the supplier facility and if parameters fall outside thresholds, action can be taken in a timely manner.

Another advantage of such a system is that it can give manufacturer direct control over sampling plans and inspections methodology with the ability to make dynamic changes based on the current inspections data trends and patterns for optimal inspection. Moreover, internal sampling plans and inspection methodologies can be complementary to those adopted by the supplier for a more robust quality check. By building reliability into this system, internal testing of components can be drastically reduced saving time and cost for manufacturers while maintaining cGMP-compliance.

Managing Quality Issues and Corrective Actions
Measuring quality deviations and monitoring any deviations from the Standard Operating Procedures (SOP) is essential during the manufacturing and packaging process and has to be identified and documented on batch records or device history records for cGMP compliance.

Using a web-based supplier quality system, suppliers can record any component nonconformance or process OOS/Variance and information will be immediately available to the manufacturer where it can be reviewed and the course of action determined. It can ease trend analysis as incidents can be correlated with past data. A remedial action such as failure investigation to identify root cause or to contain the impact and prevent recurrence can be triggered and followed up for closure. When needed, a Supplier Corrective Action Request (SCAR) can be triggered to address significant quality problems and supplier will have a channel where they can respond with their action plan.

Closing the Loop with Audits
Supplier audits are in integral part of quality management as per cGMP guidelines. For example, FDA QSR Manual states that "manufacturers should audit suppliers where needed, to assure that they have adequate quality system controls for raw materials and components shipped to and received by the manufacturers under supplier certification or certificate of compliance with specifications."

Audits are seen as ends in themselves where as they should serve as a means for achieving continuous improvement. Special attention needs to be given to the post-audit activities. They should be carefully planned and discussed with the supplier to ensure that the audit leads to meaningful and tangible actions. Upon completion, the findings and analysis of the audits should be shared with the supplier as early as possible. Manufacturer should seek responses from the supplier on issues that arise in an audit and there should be a timetable set for follow up changes or corrective actions that result from the audit along with a mechanism to track them. Documentation and tracking corrective actions that result from supplier audits should also be recorded to demonstrate FDA compliance.

Measuring Supplier Performance
A supplier quality management system that provides performance metrics and reports can enable manufactures to identify top performing and underachieving suppliers based on an effective supplier scorecard or rating program. The system should capture metrics such as number of defects, quality of investigation, responsiveness to corrective action requests, on-time performance, batch rejections, quality deviations, etc. A charge-back system where a supplier is charged for the tangible and intangible costs incurred by a manufacturer due to non-conforming components, materials and late deliveries from suppliers is an effective way to introduce business discipline and accountability into the supply chain.