How to Address the Top 3 Supplier Management Issues

Medical device manufacturers rely on suppliers for many things. Choosing the right vendors and managing them effectively can increase a manufacturer's efficiency—in terms of time, cost, and quality. Unfortunately, suppliers can also sometimes put their clients in hot water when their quality standards are below par.

There are a lot of contract manufacturers that are shifting their focus to medical technology due to the stability of the marketplace as compared with the automotive or aerospace industry. While many of them have good intentions, they often don't understand the complexities of med tech manufacturing.

Under 21 CFR 820, the manufacturer of the finished device—not the supplier—is responsible for compliance. However, the regulation also specifies that device manufacturers should select only suppliers with the capability to provide quality products. As a CDRH official emphasized recently, “Quality cannot be inspected or tested into products and services. It must be built into the device.”

If you are a med tech manufacturer, it is important to identify suppliers that have a successful track record in the device industry. They should have the systems in place for satisfying your quality and regulatory needs.

Purchasing Controls

If your company is under the jurisdiction of the U.S. Food and Drug Administration, keep in mind that under 21 CFR Section 820.50 (Purchasing Controls), you must establish and maintain quality requirements for your suppliers, vendors, and contractors.

As a device manufacturer, you are required to “evaluate and select potential suppliers, contractors, and consultants on the basis of their ability to meet specified requirements, including quality requirements. The evaluation shall be documented.” You are also required to establish and maintain records of acceptable suppliers, contractors, and consultants.

Top 3 Supplier Issues

I worked in medical device new product development as an engineer for over 12 years. I understand how hard it is to find and keep compliant suppliers. I learned that a manufacturer should not depend solely on ISO certification as a means to gauge the competence, compliance, and reliability of a supplier.

Based on my observations working with suppliers in the med tech industry, I identified some of the major issues that impact a device manufacturer's compliance efforts:

1. Vague Quality Requirements: One of the top problems is not having clearly established quality requirements for suppliers. This can be especially true of visual inspection criteria, which can be rather subjective if the criteria are not well-defined. Be sure to work closely and collaboratively with your suppliers in creating and documenting the criteria. If you make your suppliers part of the quality process, it is much more likely that you will receive good parts. This can be facilitated by involving them in the design process up front. Concurrent engineering practices are an excellent way to ensure that your product can be produced at a high quality and reasonable cost.

2. Outdated Specifications: Make sure that your vendors are working according to the most current specifications. This is particularly critical during the early phase of a product's life when changes may happen frequently. Sending specs back and forth in the mail, whether physically or electronically, is fraught with problems. A good electronic document management system with collaboration and tracking capabilities can go a long way in alleviating this pain.

3. Lack of Participation in Validation: It is important to find suppliers who will participate in a meaningful validation program. The closer you can get to a dock-to-stock program with your contract manufacturers, the better your quality and margins will be. Validating the manufacturing process with your suppliers and then making sure that there is a strict change control program in place is critical.

Under 21 CFR 820.30 (Design Changes), you are required to establish and maintain procedures for the identification, documentation, validation or where appropriate, verification, review, and approval of design changes before their implementation.

Along this vein, make sure your suppliers are notifying you of any changes that are occurring in materials and/or process. Far too often recalls are a result of an unknown change somewhere in the supply chain. A solid process for conveying and approving these changes is absolutely critical. Establish a system and process that will make it easy for you and your suppliers to access and use. Your system should provide tools for collaborating on changes and reviewing and approving them.

Recommendations

Given the abovementioned issues, I recommend the following steps to help you manage your supply chain more efficiently and effectively.

1. Ask for References: During the selection process, ask potential suppliers if they would be willing to provide a reference to which you can speak. Make sure that the reference is another med tech company and ideally using the supplier for a process similar to your own.

2. Establish a Robust Audit Program: This is essential to finding and keeping good suppliers. Don't just rely on an ISO certification. While it can be a good indicator that the supplier has the necessary systems in place, it is not the end-all and be-all. There are many good software systems that can help you manage a good supplier quality and audit program and alleviate the administrative burden that often goes along with this task.

3. Incorporate Purchasing Controls in your QMS: Make sure that you have covered purchasing controls in your quality management system. There is so much that can go wrong the further you go down the supply chain, and without sufficient purchasing controls in place, Murphy's law will certainly raise its ugly head. For those who still use a paper-based QMS or a home-grown or hybrid system, consider switching to an electronic QMS. Leverage the latest technology to help you manage your suppliers.

4. Be Vigilant about Outsourcing: Make sure you are notified if your suppliers are outsourcing parts of their process. You must have a good understanding as to whether those sub-contractors are in harmony with your controls and that your primary contractor has controls in place to deal with their subs. With the proper controls in place, you won't have a situation in which a part or product that shouldn't have been accepted somehow finds its way through the process due to an inventory shortage for a forthcoming order.

Remember that your suppliers are your partners. Although you are ultimately responsible for complying with regulations and standards, your vendors should provide support by being compliant themselves. Make sure that your quality procedures and requirements, audits, purchasing controls, and quality system all work together to facilitate supplier compliance.

This article was originally published on Med Device Online. Reprinted with permission. View the original article at http://www.meddeviceonline.com/doc/how-to-address-the-top-supplier-management-issues-0001