Understanding Supplier Audits in the Pharmaceutical Industry
The life sciences industry always strives for the highest quality control standards possible. When a company’s products and services can impact the health and well-being of the general public, it’s essential to avoid making mistakes in the manufacturing process.
In the pharmaceutical industry, supplier audits play an important role in ensuring the quality of raw materials being provided by suppliers.
Supplier quality audits are regular inspections that improve the raw materials, equipment, and supplies a company receives from third parties. Not only can they cut down on the chance of defective finished products entering the market, but they also help achieve legal compliance with the health industry’s strict regulatory requirements.
The Need For Precision
In drug production, for instance, even small variations in active pharmaceutical ingredients or the equipment used to manufacture the drugs can have significant impacts on the safety and efficacy of the final product.
The U.S. Food and Drug Administration knows how much upstream activity influences drug production and subsequently requires manufacturers to gain awareness of what their vendors are doing.
Pharmaceutical companies themselves are ultimately responsible for the quality of their output, and grasping the increasingly complex supply chain requires supplier quality management training. It is the responsibility of the pharmaceutical manufacturing companies to conduct external cGMP audits (Current Good Manufacturing Practices) to ensure vendors are following proper manufacturing practices and that the raw materials used in production are safe for the consumer using the product.
What Pharmaceutical Audits Cover
Medical audits can vary in their requirements, and one major challenge facing auditors today is what exactly they should be looking for. Pharmaceutical manufacturers must be clear in their expectations of supplier quality and the key performance indicators that must be met. Some of those KPIs may include:
- Legal certifications
- Batching process
- Deviations in product output
- History of client complaints and how they responded
- Corrective actions to previous infractions
- Rates of return
A high rate of return, a poorly managed batching process, or too large of a deviation from the requested quality are all signs of a supplier not following the necessary manufacturing practices. Manufacturers will usually suggest their own training resources or new processes that can address any of these issues.
The scope of the audit also changes depending on the risk level and importance of the supplier in question. A critical supplier would naturally receive an audit with a broader scope and deeper depth than a low-priority one.
Steps To Conducting a Healthcare Supply Chain Audit
When it comes to identifying potential problems in supplier operations and making better decisions to improve patient outcomes, a supplier audit is the key to improving vendor compliance. Some steps you can take to improve auditing capabilities are as follows:
Deciding on the Scope of the Audit
We’ve mentioned before that scope can vary depending on the company and the nature of the vendor. However, all audits must have specific goals in mind beyond just “do better.” They must be able to use real-world metrics to justify specific steps and corrective action to improve future outcomes.
Set goals on what an audit is meant to accomplish. Should it target a supplier’s sustainability policies? Does the compliance record need to be fixed? Or are there specific risks to address?
Know the Steps Involved in Manufacturing
It’s important to visualize the production process of individual products. Build a road map to holistically evaluate where each supplier pitches into the process. Some of the steps to include are:
- Sourcing and procurement
- Inventory
- Manufacturing
- Distribution Practices
- Administrative tasks like invoicing
Audits will ensure that every step is accounted for and acknowledged as part of quality assurance.
Find Out the Cost of Individual Components
Audits are also an opportunity to discover new savings opportunities. If multiple different products have a low variation among them, you could consolidate or standardize their purchase without cutting down on quality control.
Strategic partnerships in general help you open up about cost information and share ways to boost revenue and eliminate waste. You also have a chance to identify potential shortages and other risks before they happen, as
the impact of the pandemic on medical supply chains has been duly noted.
Know All the People Involved Too
It’s also worth noting who the decision-makers are throughout the supply chain. These professionals have control over essential aspects of the supplier’s road map:
- The board of directors
- Clinical management
- Supply chain operators
- System performance administrators
- Accounts payable department
Communicating with these touchpoints is the key to building stable relationships with the supplier in question.
Implementing Corrective Actions Afterwards
Once an audit report has pinpointed problematic areas, it’s time for the vendor and manufacturer to work out appropriate solutions. Input from both sides matters in this step, as the vendor itself is more aware of its own shortcomings and operations than the auditor.
A strong manufacturer-supplier relationship is then a major goal of the auditing process. Only then can you ensure a steady, consistent source of high-quality materials and operating procedures for sensitive medical supplies and equipment.
Supplier Audit Training
Did you know that you can receive vendor management certifications online from certified instructors? CfPIE’s Auditing and Qualifying Suppliers and Vendors provide vendor management training for individuals working in the pharmaceutical industry.
Register for the next virtual course and learn everything you need to know about supplier quality audits.
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