Kari Miller, Regulatory and Product Management Leader, Pilgrim Quality Solutions, an IQVIA company
In recent weeks, the Pilgrim Blog has addressed the fact that supply chain complexity in the Life Sciences has grown from simple domestic sourcing, manufacturing and distribution, to a complex ecosystem of global sourcing, manufacturing, and distribution centers around the world. As such, companies need to develop, implement, and maintain a Supplier Management program that integrates compliance, oversight, and strong supplier relationships into business practices and quality systems.
Yet, in many cases today, not all suppliers are selected, evaluated, or maintained according to the type of product or service provided.
Mishandling the Keys Drives Risk Up
Supplier questionnaires or audits are not always consistent with the selected supplier. Trending and data is not always analyzed and/or visible to the appropriate level in the organization. Employees at both the manufacturer and/or the supplier don’t always know or understand their responsibility or authority.
The industry spends a high proportion of revenues on Research and Development, and relatively less on raw materials and manufacturing. These numbers strongly influence the way supply chains are managed and subsequent risks that can emerge. And risk to supply chains can have devastating quality and financial consequences well beyond.
Install Gates to Keep Risk Out, Keep Quality In
Using your Supplier Management program can help improve profitability by decreasing the cost of quality. Additional emphasis should be placed on the control/oversight of suppliers as global outsourcing activities increase. Remember, poor cost of quality results in rework, waste, delays in product approval, resource inefficiencies, corrections and removals, enforcement actions, etc., which impacts the bottom line.
How, then, can you strengthen your quality management in the supply chain to ensure your organization’s success in today’s highly complex supplier ecosystem?
- Make the Supplier Management system flexible, simple, risk-based, and easily integrated throughout the organization.
- Assure that sufficient mechanisms are in place so that all suppliers are managed according to the type of product, materials, or service provided — this includes ‘consultant’ services.
- Have a selection, maintenance, and reporting process that includes materials, products, and services throughout the product lifecycle.
- Make sure the appropriate functional partnerships are established – Engineering, Manufacturing, Purchasing, Quality, and the supplier’s representative functions.
- Invest in resources to support the internal partnerships between Quality, Purchasing, Engineering, and Manufacturing to drive for successful oversight and management of suppliers.
- Build supplier relationships.
Remember the Combination to Staying Secure
Integrate risk management throughout the supplier selection, maintenance, and data reporting processes. Implement measurement, data analysis tools, and processes for different levels of the organization. Configure data such that problems related to product, process, or quality systems can be identified. Results of the analysis and/or any further decision to take action are identified and communicated to the supplier. Drive for the development and ownership of supplier relationships (accountability).
A good Supply Chain Management Program with effective Quality Processes will help companies:
- Reduce cost of goods purchased
- Improved market access
- More effective price negotiations (company leverage)
- Reduce risk due to increased compliance
- More thorough specs and better communication to supplier
- More rigorous testing and reporting
- Improve supplier performance
- ON-TIME, ON-QUALITY, “NO SURPRISES”
- Standardized contracts that are easier to monitor
- Gain sustainable competitive advantage
- Consolidation and visibility into entire supply chain
So now what?
- Be Concerned? Yes!
- Get Better Contracts & Qualifications? Yes!
- Be Diligent? Yes!
- Be Compliant? Absolutely!
Don’t let increasing supply chain complexity intrude on your organization’s reputation. Fortify the walls of your Enterprise Quality Management System. HOW? By putting (or re-assessing) supply chain controls and programs in place NOW!
Practical Tips in Managing Life Sciences Supplier Risks
View this webinar to discover key attributes of supplier risk management and best practices for maintaining a high-performance supplier base.