Justin L. Smith, Product Management Director, Pilgrim Quality Solutions, an IQVIA company
Knowing your suppliers is as important as knowing the resources themselves. If you have a product defect, it doesn’t matter if it was a supplier’s fault or your own – the only thing the public will see and react to is your product and brand. And the latest regulations are putting more emphasis on the fact that you are responsible for the quality of your overall supply chain. It pays to keep a tight control on supplier management.
The first step in understanding suppliers is through an evaluation and acceptance process. What are their business systems? Are they financially stable? What does Dunn & Bradstreet have to say about them? What percent of their sales is the product or resource you need? If it’s not substantial, will that affect the quality?
What is the capacity of the supplier’s operations? What technology do they use? Do they have a good reputation in the industry? Are their product costs and distribution costs in line with competition and your budget? Physically, where are they located, and who are your points of contact?
Suppliers come in many flavors, such as:
- OEM (original equipment manufacturer) – design control
- Contract manufacturer – process control
- Critical service provider – data control
- Critical material supplier – material control
- Catalog/off the shelf material supplier
- Routine or low-risk service provider
- Sister plant – depends on patient safety impact of service or material
You need a process to determine your risk with this supplier and determine a rating value based on this process. For example, is this supplier “adequate, deficient, or unsatisfactory,” or does their numerical score meet your criteria? Your evaluation process should include questions about the market and classification of the device, and should take into consideration regulatory requirements and any past or risk of exposure due to product recalls. As far as the manufacturing capability and supply chain impact, consider how many suppliers, the number of sources, and supplier manufacturing location. What is their technical capability and how does that match with yours? Finally, for quality purposes, are they certified to ISO 9001, ISO 13485, etc.?
Assigning a risk criticality level to your suppliers will help determine how to control and monitor the supplier relationship: high risk or level 3, medium risk or level 2, or low risk or level 1. Based on this ranking, you can then determine the frequency and type of supplier audits commensurate with risk (bi-annual, annual, third-party, etc.). You can determine the frequency and type of inspections, from dock to stock, sampling, and first article, to 100% inspection.
Most importantly, you should track key quality metrics, such as:
- Complaint Parts Per Million (PPMs)
- Nonconformance failure mode and root cause trends
- Supplier corrective actions (SCARs)
- On-time delivery, inventory turns, COPQ, and rejection rates
- Quality, cost, services, delivery, compliance scorecards
- Overall supplier risk rating
- Technical data trends
Find the metrics that are right for your product or process, and for your supplier relationship, from scorecards and global supplier ratings, to approved supplier list (ASL) and SCARS feedback, and more. Update your supplier risk profile and analyze it to monitor the “health” of the supplier in real time. Supplier performance monitoring throughout the product lifecycle can help you identify problems and rectify them before they become a potential brand disaster.
SmartSolve® Supplier Management
SmartSolve Supplier Management simplifies the complex task of managing your suppliers and minimizing organizational risk.