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How to Perform a Supplier Qualification Audit
Companies selling medical devices or pharmaceuticals are required by applicable regulations and standards to monitor the quality of the raw materials, components, and services that go into their products. For this reason, it is crucial that manufacturers have systems in place to ensure that purchases meet acceptable quality requirements. One essential and prevailing tool for this is the supplier quality audit.
What is a supplier quality audit?
Execution of planned, thorough, and timely supplier quality audits is how businesses and organizations verify that their suppliers adhere to standards set by industry regulators, supplier agreements, and internal processes and procedures. A supplier quality audit is an assessment performed to evaluate the compliance of supplier’s quality system versus regulatory requirements, and that the system is executed fully and consistently by the supplier’s employees. These audits are vital for continual improvement – identifying gaps and addressing issues that require corrective actions and preventive actions (CAPA).
What is the need for a supplier audit?
Audits are widely recognized in the medical device and pharmaceutical supply chains as an essential and effective element of doing business. While there are many benefits of performing supplier quality audits, here are 4 of the biggest:
Minimization of Risk
Supply chains, outsourcing, and globalization expose the medical device and pharmaceutical industry to a significant amount of risk. The risks can range from poor quality, injured reputation, non-compliance fines, supply disruption, patient safety incidents, and failures in business continuity. To mitigate these risks, companies need to audit their supply chains effectively. Ideally, an integrated supplier qualification process helps to identify and mitigate the associated risk of materials, components, and services.
Supplier qualification and monitoring through auditing can be a robust risk assessment tool that ensures that suppliers comply with industry standards. There are multiple directives and regulations for products used for human and veterinary needs.
For example, the revised Chapter 7 of the EU-GMP Guidelines defines the Contract Giver's specific responsibilities that guide contract manufacturing and testing procedures. It is each manufacturer’s duty to monitor and ensure the quality of outsourced activities while incorporating quality risk management principles, including regular reviews of the quality of the Contract Acceptor's performance. Audits are a helpful tool to assess the legality, suitability, and competence of the Contract Acceptor.
Likewise, FDA regulations place the maintenance of regulatory burden squarely on the company receiving a supplier's products or service. Manufacturers must monitor and manage quality when outsourcing anything that can impact product. FDA further states that:
"....each manufacturer shall establish and maintain the requirements, including quality requirements, that must be met by suppliers, contractors, and consultants."
Maximize Return on Investment
Your business will benefit when costs from errors are reduced/eliminated, brand reputation is protected, and long-term profitability is realized. Supplier auditing also helps to identify problems early, often before they happen so that robust contingency and preventive plans can be put in place. The audits can also prevent manufacturers from engaging suppliers with noncompliant or dangerous practices.
How to Conduct a Supplier Quality Audit
An ideal audit should be both efficient and cost-effective, and should be designed to identify existing and potential risks. Importantly, a good audit should be well structured, systematically performed, and well documented. It should also guarantee remedial actions are performed to achieve timely and satisfactory conclusions.
The following are the essential steps to perform a supplier quality audit:
Step 1: Pre-audit data collection
Successful planning of quality audits starts with the pre-audit data preparations. This process involves collecting, collating, and analyzing all relevant data to help develop the audit type, duration, scope, and specific objectives. Well-structured and comprehensive pre-audit questionnaires can be a valuable tool to source pre-audit information. For instance, questionnaires can ask about the size of the organization, products they manufacture, and their QMS certification status.
Step 2: Preparation
This step is where scheduling and logistics are arranged, the audit plan is defined, and audit teams are identified. For audits that require special expertise, consider expanding the team to include one or more specialists or subject matter experts. If working with multiple auditors, it is considered a good practice to identify the lead auditor, who is assigned responsibilities to achieve a seamless working environment.
During the preparation phase it is also essential to notify the supplier (well in advance) to allow them time to make necessary arrangements to host the audit. In most cases, the right person to contact is the Quality Assurance department of the supplier. The lead auditor should establish a direct communication channel with the Quality Assurance department to make the necessary arrangements and agree on the agenda in advance of the audit.
Step 3: Performing the audit
The auditing process generally follows the procedure outlined below:
Hold an opening meeting.
Every audit should start with an opening meeting to introduce auditors to relevant auditee staff and senior management representatives. The meeting should also review the audit rationale/scope, agree on communication channels, clarify the audit plan, and interpret any ambiguous replies in the pre-audit questionnaire. The auditee can also use this meeting to explain the company policies on safety, taking photographs, the maintaining confidentiality of the information, collection of samples, making recordings, and talking with operators and other staff.
Take a tour
During the audit, it is a standard to take a tour of all the relevant parts of the facility to observe operations firsthand. The tour will also give the auditor opportunities to gather information, assess the cleanliness and condition of the facilities, and evaluate the risk of potential contamination. Additionally, this tour of the facility will also provide auditors with an opportunity to familiarize themselves with the operation's scale and capacity.
Obtain relevant evidence
Auditors obtain critical evidence of compliance through observation, questioning, examining documentation and records, and challenging issues of concern. All relevant observations should be recorded clearly and concisely together and supported by objective evidence. Observations should be discussed with the supplier at this stage to avoid surprises in the closing meeting.
The closing meeting provides the audit team with a chance to communicate audit findings and conclusions to the auditee's management. A best practice is to offer a simple agenda and a short, written summary of observations. It is also important to emphasize strengths while highlighting the areas that need improvement.
Deficiencies should be classified in a manner that highlights the risk levels and priority actions to the auditee and senior management. It is also important that you provide the auditee with an opportunity to clarify and understand the cited gaps and the corresponding evidence.
Step 4: Generation of an audit report
An audit report is a critical part of the auditing processes. Audit reports serve as documented evidence that the audit occurred and that any deficiencies are recorded. The audit reports should be drafted within a maximum of 3 weeks after the audit and be signed by the auditor when completed. The report should provide a record that identifies areas of weaknesses that need improvement. Drafts of the report should be provided to the auditee for comment and to check the accuracy so that there are no issues and misunderstandings over observations and recommendations.
Step 5: Follow up
Auditors should plan for follow up to ensure timely implementation of corrective actions and verification of their effectiveness. Ideally, progress against significant issues should be reported within a specific timeframe. Also, re-audits should be scheduled to confirm that crucial remedial actions are completed for all major deficiencies.
Supplier quality audits offer an excellent opportunity to engage directly with supply chain elements in a meaningful way. They allow manufacturers to gain crucial insights that focus on the reduction of risk exposure and improvement of quality levels.
Many manufacturers don’t have adequate resources to perform supplier qualification and monitoring audits. Some don’t have qualified auditors with enough experience to avoid mistakes, or they don’t have them in the optimal locations. One very practical and cost-effective way to execute successful supplier audits is to contract with external auditors. Let these experts that have the combination of credentials, experience, and location conduct these supplier audits on behalf of your organization. Learn more about how to locate and contract with supplier auditing experts across the globe when you contact Medpoint.