Pharmaceutical manufacturers encounter an ever-growing list of pressures in the face of an increasingly complex global supply chain. Chief among the challenges is managing the operational difficulties of working with any number of specialized suppliers contributing critical ingredients and components to drug production. Add to this the need to meet strict quality and compliance requirements set by various regulatory agencies throughout the world, and it’s clear that the supply chain creates an environment that is difficult for pharma manufacturers to manage and control.

Even when there are quality agreements between manufacturers and their suppliers, it’s the manufacturer that bears the responsibility of managing its supply chain adequately. As the supply chain grows longer and more complex, meticulous supplier quality management has become essential for manufacturers to ensure they are sourcing quality materials to create their products.

To that end, manufacturers must develop a deeper understanding of the quality and reliability of their suppliers, and quality excellence must extend to suppliers.

VISIBILITY: A KEY PAIN IN THE PHARMA SUPPLY CHAIN

Managing supplier quality in the pharmaceutical manufacturing industry can be difficult even for the most quality-centric organization. In a recent survey of more than 500 senior leaders across industries, when asked about their top quality-related challenges, respondents from all life sciences industries emphasized the inability to measure quality metrics effectively and problems posed by disparate systems and data sources. Pharmaceutical manufacturing companies, in particular, cited considerable challenges with visibility into supplier quality, according to LNS Research’s findings.

As the U.S. Food and Drug Administration (FDA) and other international regulatory bodies place more focus on upstream activities, pharmaceutical companies must gain greater visibility throughout their supply chain. Until a manufacturer can see the activity taking place among its suppliers and partners, it will struggle to know if a supplier’s quality system is failing.

In a field where precision is critical, even slight variations in equipment used, materials sourced or processes followed can quickly result in products out of specification, nonconforming materials and manufacturing/production downtime.
These risks highlight the need to establish a robust supplier audit program. Conducting supplier audits is essential to gaining visibility into whether a supplier’s products and processes adhere to a defined quality standard.

WHAT TO LOOK FOR DURING A SUPPLIER AUDIT
There is no one-size-fits-all way to conduct a supplier audit. That said, one of the most common supplier management issues facing manufacturers today is having vague quality requirements. Even as manufacturers expect suppliers to measure their own performance, manufacturers must also work with their suppliers to establish clear quality requirements for their suppliers, defining their own metrics and key performance indicators (KPIs) for the performance of their suppliers.

Every manufacturer must establish its own criteria for what requisite characteristics and capabilities its suppliers’ quality system must possess or demonstrate. Moreover, the breadth and depth of an audit may differ depending on the product or process. Among the endless possible criteria manufacturers can consider measuring are the following elements of a supplier’s quality performance and related activities:

• Deviations and non-conformances
• Regulatory certifications
• Corrective actions
• Change controls
• Complaint history
• Return rates
• Raw material chain of custody
• Batching process and production records

A criteria list can be long and comprehensive, which is why many manufacturers maintain an audit form or survey that outlines specific questions to help evaluate suppliers in an expansive scope.

Signs during an audit that a supplier’s quality performance is poor can include high scrap rates or nonconforming product rates; poor/incomplete batch record documentation; and below industry-standard KPIs. Manufacturers can use audit results to identify process, training or documentation issues that affect their supplier’s quality metrics, and then help steer the supplier to a higher state of quality.

HOW TO GUIDE A SUPPLIER TO AN IMPROVED STATE OF QUALITY
Once the issues hindering optimal supplier quality have been identified, the manufacturer and supplier can together identify corrective actions for the supplier to implement within a specific time frame. Supplier scorecards should be updated to reflect quality-related problems found during an audit, and because supplier quality management is a continuous process, it’s important to set up reoccurring supplier evaluations, or mini-audits, to identify, address and prevent quality problems.

To successfully implement supplier corrective actions, there needs to be a robust and well-managed process. The process should not be based on giving specific solutions to the supplier.

More often than not, the supplier is more familiar with its own quality system and has a better understanding of it than the manufacturer that is auditing it. Mandating specific solutions can actually cause more damage than benefit — overcomplicating an already-complicated quality system, adding more steps the supplier can’t follow and leading to more problems in the future.

Instead, the best way to help a supplier reach a better state of quality is to be its partner. Manufacturers should work closely with suppliers to create and document the criteria for quality performance, and they should proactively collaborate to identify significant quality problems and corrective actions.

Consider one global pharmaceutical company as an example. The company was using a contract manufacturer, and the quality agreement stated that any change in the manufacturing process required a change control that could lead to re-validation. The manufacturer moved equipment and wrote in the transfer operational qualification (TOQ) that the equipment move was not considered a change, and it was not fully validated. The pharmaceutical company’s product was made out of specification and shipped based on standard agreements for “shipping at risk.” When the failed batches returned, they caused a nightmare. The product hadn’t failed a batch in more than five years, so the company’s supply chain was not prepared to handle the three-week delay caused by the failure.

In this recent example, a normal audit and partnership structure could have avoided the costly failure, as the pharmaceutical company clearly within its quality system required revalidation for equipment moves where the manufacturer did not. Ensuring that the quality subsystems match is critical.

Ultimately, a strategic manufacturer/supplier partnership is at its best when establishing open communication, allowing visibility into the source of materials and ensuring high quality. By making suppliers part of the quality process, manufacturers are more likely to gain greater visibility into supplier quality, facilitate better quality processes and receive higher-quality parts. Maintaining a strong, mutually beneficial relationship with suppliers should be a key part of a manufacturer’s business plan.

AUTOMATION’S ROLE IN SUPPLIER QUALITY
To make informed, risk-based quality decisions, manufacturers must have greater access to quality-related data. Today, market-leading manufacturers are leveraging integrated software to streamline quality data throughout the entire value chain and tackle the most persistent supplier quality challenges. They are adopting next-generation solutions that not only harness their suppliers’ quality-related data, but also enable improved communication and collaboration between the two groups.

For example, enterprise audit management solutions are enabling manufacturers to optimize their entire audit process — from planning audits and capturing findings to implementing corrective actions and creating final audit reports — and connect it with the rest of the quality system. A best-in-class audit solution will provide all of the tools necessary to monitor and manage supplier qualifications, audits, corrective actions, nonconformance issues and other supplier-related processes in a single place.

Additionally, supplier quality management solutions are giving manufacturers the ability to automatically track and store all supplier-related information and documentation, like nonconformance reports and corrective actions, including information derived from the supplier quality audits. A robust supplier solution will include tools and functionality that automate all tasks related to supplier corrective action requests (SCARs) and connect the SCAR process with other quality processes.

By adopting software solutions with an eye toward supplier quality — often delivered as an extension of existing enterprise solutions, including EQMS — manufacturers are able to automate many paper-based and manual processes and to efficiently manage them in a single system rather than in various disconnected information sources. By implementing supplier audits collaboratively and applying robust quality management tools, market leaders are taking steps to create a complete, integrated supply quality view, transforming not just their quality management, but also that of their strategic partners.

This article cites LNS Research survey findings published in an e-book titled, “A Road Map for Addressing Quality and Manufacturing Challenges in Life Sciences.” The joint LNS Research-MasterControl e-book, published in 2015, can be downloaded via the Analyst Report section of MasterControl’s Research Center, and highlights of the research can be found on MasterControl’s GxP Lifeline blog.

ABOUT THE AUTHOR
Terrance Holbrook is a senior technical product manager at MasterControl, where his responsibilities include product design and development and market research for software features and functionality. He has more than 18 years of industry experience in manufacturing fields and six years in product development of medical devices. A certified Six Sigma Black Belt and ISO 9001:2008 lead auditor, Holbrook is also certified in lean manufacturing and total quality management.