Global Supplier Performance and the Regulations Driving Change

Global Supplier Performance and the Regulations Driving Change

Kari Miller, Regulatory and Product Management Leader, Pilgrim Quality Solutions, an IQVIA company

Innovation within the Medical Device industry, and Life Sciences in general, continues to accelerate at an impressive clip with the introduction of groundbreaking new technologies, resulting in an increasing portfolio of medical devices. At the same time, the global healthcare industry is seeing explosive growth in the demand for those products almost as quickly as they hit the market.

This rapid pace of development and time-to-market expectations, combined with evolving regulatory requirements, however, is putting a great deal of pressure on manufacturers to ensure the quality and efficacy of their products. One of the major components of that pressure is the dependence on supply chain performance.

When companies implement business process automation that is managed in accordance with solid quality and evolving compliance standards, they can monitor the effectiveness of their suppliers’ performance, and at the same time, track their compliance management throughout the global organization.

The Case for Global Supplier Performance

Regulatory Drivers

  • ISO 9001: 2015 — Revised regulatory standards are becoming less prescriptive, and instead, are focusing increasingly on performance and risk-based thinking. In contrast to the 2008 version of the standard which focused primarily on the customer, ISO 9001:2015 directs organizations to address risks and opportunities, including supplier performance, that can affect product and service conformity. Additionally, it holds organizational leadership responsible for that. Global Supplier Management participation in, and support of, a global supplier performance process is critical.
  • ISO 13485:2016 — The new medical device standard also emphasizes risk management and risk-based decision-making, and it places additional regulatory requirements on organizations in the extended supply chain. The revised regulation aims to strengthen supplier control processes and increase the focus regarding feedback mechanisms. It also prescribes improved alignment of global regulatory environments.
  • cGMP — While cGMP hasn’t undergone significant changes in the area of Supplier Management, we must consider and compare it to ISO 13485:2016 Clause 7.4. Purchasing now is in closer alignment with 21 CFR Part 820.50 and directly requires the following:
    • Establishment of criteria for the evaluation and selection of suppliers
    • Monitoring and re-evaluation of suppliers
    • Actions required when purchasing requirements are not met
    • Supplier Notifications of Change
    • Verification activities of purchase product

The Cost of Non-compliance is High but Can’t be the Only Driver for Change

When compliance is a driver for change in an organization, it’s easy to fall into the mindset that a change is made only “because we have to.” The risk with that mindset is that potential benefits are overlooked. In reality, change presents opportunities for operational improvement, which in essence, can prevent future incidents of non-compliance, and therefore, brings overall costs down.

Today’s cost of noncompliance is staggering. Consent decrees can exceed $500 million in costs, and recovery can take three to five years. Fines, penalties, and remediation costs have been in the hundreds of millions of dollars in multiple cases. Those figures don’t even take into account the impact to an organization’s reputation, and with the speed at which information flows today, that impact is felt quickly and widespread.

Whether within a medical device, pharmaceutical, or other regulated consumer product organization, a global supplier performance process will reduce the risk of non-conforming materials being introduced into the final product, and therefore increases the probability of manufacturing safe and compliant products that will effectively meet customer requirements, and prevent those costs from impacting the balance sheet.

Automation for Supplier and Operational Improvement

Implementing an effective automated Supplier Quality Management solution is a first step toward operational improvement that enables a manufacturing organization to both meet regulatory requirements, and avoid the potentially massive costs of non-compliance. When looking for an effective solution, companies must consider whether that solution has the capabilities that, at a minimum, enable them to:

  • Minimize the time spent inspecting materials, and instead, dedicate more time to identifying which suppliers and materials require attention.
  • Correct and prevent supplier defects and recurrences by integrating with Corrective and Preventive Action (CAPA) and Nonconformance management solutions.
  • Stay on top of ongoing supplier quality performance by integrating with an Audit management program, as well as the aforementioned CAPA system, so that any supplier defects or non-compliances are managed in a single, harmonized process.
  • Continuously monitor supplier performance and share evaluations via scorecards with both the internal Quality team, the internal operations teams, and the suppliers themselves.

Focus on the Carrot, Not the Stick

Keeping up with advancements in product innovation and the growing demand for life-enhancing and life-saving products is challenging. Add to that the ever-evolving and increasingly stringent regulations that are designed, ultimately, to protect patients, and one might question how any Life Sciences manufacturer is able to stay on track – and in the black. Those that are flourishing are keeping a close watch on their entire manufacturing ecosystem, including their supplier network.

While it may seem a daunting task to manage the performance of that supplier network given the pressures inherent in the Life Sciences industry, the benefits of doing so are rewarding. The companies that successfully manage supplier performance throughout their product’s lifecycle realize:

  • Reduced organizational risk;
  • Operational excellence;
  • Reduced cost of quality and compliance;
  • Brand and corporate reputation protection;
  • (and most rewarding!) Improved patient safety.

 

Global Supplier Performance

Webinar

This webinar examines the key considerations for effectively integrating new value-chain partners into Life Sciences manufacturing systems.

Global Supplier Performance

 

Kari Miller

Regulatory & Product Management Leader, Pilgrim Quality Solutions

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