Building a Vendor Qualification Program for FDA-Regulated Industries

While being conscious of the products and services purchased is good practice for consumers and most businesses, it is a regulatory requirement for U.S. Food and Drug Administration (FDA) regulated industries. For these organizations, the decisions where to purchase components, raw materials, manufacturing and testing equipment and consulting services, need to be well-informed (and documented). The results of making poor purchasing decisions can lead to situations that impact product quality, regulatory compliance, company profits and even the reputation of the company itself. This article presents a practical and compliant methodology for firms in FDA-regulated industries to qualify vendors and hence make well informed purchasing-related decisions.

Vendor qualification is the process where a vendor is evaluated to determine if it can provide the necessary goods or services to the standards that the purchasing company requires. This article employs the theme that vendor qualification is not solely an auditing process but rather a quality system in itself. Similar to a professional football draftee, a potential vendor should be thoroughly assessed against a company’s requirements, compared to other candidate vendors, “physically evaluated” once selected (and before a contract is signed) and reevaluated as required and as defined on a regularly basis. This article presents the “QUEST Approach” (Figure 1) as a simple, effective, and compliant approach to vendor qualification.

Q = Question Phase – What a Potential Vendor Needs to Supply

The first step in qualifying a vendor is for the company to document the needs from a vendor of this type. For example, does the vendor need to sell to medical device firms already? Does the vendor have the current ability to supply the required units, resources, etc.? Of course, one of the most important questions is, “What is our budget for this vendor’s products or services?” Often, a company’s change control system is a good place to document/capture this information.

U = Understanding Phase – How Vendors Meet the Requirements

Once the Question phase is complete, vendors that appear to meet the company’s requirements are contacted directly to gauge interest in being a new vendor for the company. The company’s requirements (as defined in the Question phase) are then supplied to those interested vendor organizations. It should be requested that the vendor supply all its administrative information, applicable sales and marketing materials, and most importantly, documentation that supports its ability to the specified company requirements. At this time, it should also be requested that the vendor send a “sample” of the product or service that they will potentially providing. At least three vendors should provide the information requested in its entirety before moving to the next phase in the vendor qualification process. At this point, it is imperative that each vendor package be thoroughly assessed for adequacy and completeness.

E = Evaluation Phase – Identification of the Best Potential Vendor

Now that at least three vendors have been identified to meet the company’s requirements, it is time for vendor evaluation. First, each vendor is assessed against the company requirements as specified in the Question phase. Remember, potential vendors that could not meet the requirements have already been weeded out. This evaluation pertains to how well each vendor meets each requirement when compared to the other short-listed vendors. The format of this evaluation can be as simple as a table with columns for the vendor and the requirements, where a simple rating system is applied to each requirement for each vendor. An example of such a table for the evaluation of a tubing supplier is in Figure 2. Once the ratings are assigned, a simple average can be used to identify and document the best potential vendor.

The next to last phase in the vendor qualification process involves a site audit of the potential vendor’s facility. As the cost of an audit is a potentially pricey activity, the site audit may be performed onsite or offsite depending on the criticality of the potential vendor type and is limited to the best potential vendor identified in the Evaluation phase. As the interpretation of the definitions of critical and non-critical suppliers varies among companies, it is imperative that an approved and controlled company document clearly defines the classification. If the best potential vendor is a potential critical vendor, it is highly recommended that this vendor be subjected to an onsite audit with predetermined items requiring onsite verification. An example portion of a form to be completed during the onsite verification for a contract packager is in Figure 3.

If the best potential vendor is a potential non-critical vendor, the vendor should be subjected to an offsite audit with its own predetermined audit checklist.

Based upon the overall score for both onsite and offsite audits, a potential vendor is either accepted or rejected. If accepted, the vendor is considered qualified. If rejected, the company can either:

1. Work with the vendor to address the deficiencies and perform a verification audit at a later date, or;

1. Select another evaluated potential vendor to subject to the Site Audit phase.

T = Track Phase – Monitor and Requalify

Once a vendor is qualified, the vendor’s performance must be monitored on a continuous basis to review of any problems associated with the good or service supplied by the vendor. A schedule is determined so that each qualified vendor is re-qualified on a periodic basis similar to regulatory authority audits (e.g., FDA audits), the company should not only run through the preapproved audit verification steps, but should also revisit items that were found to be deficient during previous audits.

Just as an individual consumer has the responsibility for verifying the quality of goods and services he or she plans to purchase, companies in FDA-regulated industries are responsible by regulation as well as through moral obligation to ensure that their vendors will consistently provide raw materials and components, compliance consulting services, manufacturing equipment, etc., that yield safe and effective products.