Optimizing supplier quality management

June 27, 2022
Adopting a risk-based model for inspections will flag suppliers who aren’t up to par

Today’s pharma companies rely on an ever-growing list of suppliers to produce the therapies they bring to market. Through the supplier quality management process, companies ensure that each supplier is helping meet quality and regulatory compliance goals — and is informed in a timely manner if performance is not up to par.

Optimizing this process provides pharma manufacturers with a critical competitive differentiator, as it results in fewer product recalls or delays in releasing products. Optimization also offers protection from fines or other regulatory actions.

However, fully optimizing supplier quality management requires taking a hard look at the many risks that present themselves in today’s complex global supply chains.

Adopting a risk-based model for incoming supplier inspections allows organizations to identify and mitigate potentially adverse circumstances before they pose a problem, while also streamlining inspections for high-quality materials.

The value of risk-based

If ingredients and packaging materials that fail to meet the standards set by government, industry and individual manufacturers make their way into production, pharma companies risk releasing unsafe products to the market, with significant consequences — recalls, fines, product shortages and a loss of consumer confidence.

Incoming supplier product inspections are undoubtedly necessary, but they can be time-consuming. A risk-based approach helps pharma to understand which materials are most (and least) likely to require inspection, and to better compare suppliers.

With this information in hand, organizations can devote less time and money to inspecting products and suppliers that regularly meet or exceed quality standards. Meanwhile, they can use supplier comparison sheets to identify low-performing materials, notify suppliers of the issues encountered, and take necessary measures.

Sampling systems

Since no manufacturer can inspect every material that comes from every supplier, sampling systems are at the heart of a risk-based supplier inspection program. The typical system has three components: A sampling plan, a skip lot schedule and switching rules.

The sampling plan sets a baseline level for the percentage of defects a manufacturer is willing to tolerate for a given characteristic. Many companies use plans set by the American National Standards Institute and the American Society of Quality, such as the ANSI/ASQ Z1.4 standard. This level is referred to as the Acceptance Quality Level (AQL). For the most critical materials, this level may be 0% — meaning that no defects will be tolerated. For less critical characteristics, a level between 2.5% and 4% is more common.

The skip lot schedule determines the percentage of lots out of the total number of lots received that need to be inspected. This schedule can be based on multiple factors, including a material’s criticality as well as a supplier’s past performance. Here, the benefit of the risk-based model begins to come into focus, as not every material is inspected at the same level. High-risk materials can be inspected more frequently, while low-risk materials (such as outer packaging) may need no inspection at all. This lets companies prioritize their supplier inspections and improve the overall efficiency of the quality management process.

Finally, switching rules input the results of ongoing inspections and offer feedback about needed changes to both sample size and skip lot schedule. Since switching rules are based on predetermined statistical plans, it’s important for manufacturers to use industry standards rather than create their own.

Switching rules propose changes based on three states: ‘Normal’ is the baseline for sample size and number of lots inspected. If previous supplier inspections consistently produce good results, then inspections can proceed in a ‘reduced’ state, in which fewer lots are inspected and fewer samples are taken from each lot. If previous inspections generated poor results, then inspections proceed in a ‘tightened’ state, which involves inspecting more lots and taking more samples.

Pharma manufacturers recognize the importance of supplier quality management but often struggle to streamline the process, and workarounds can cause delays or allow subpar materials to be used for production. A risk-based system can enable pharma to prioritize which materials and suppliers require the most thorough inspections, helping to fully optimize supplier quality management. 

About the Author

Kari Miller | QMS Regulatory and Product Management Leader