Without visibility into a supplier’s processes and quality management system (QMS), manufacturers risk receiving unreliable, low-quality products from their suppliers. According to surveys by LNS Research, manufacturers with poor visibility into supplier performance have a median supplier defect rate more than double the rest of the population.
For manufacturers, supplier auditing is essential to gaining visibility into whether a supplier’s products and processes are adhering to a defined quality standard.
When Should a Supplier Audit Be Conducted?
The timing of an audit varies depending on its purpose. For example, the QMS may require it or the supplier isn’t performing well. Supplier audits are also called for if the supplier is new and there isn’t enough performance information available, or if the supplier is critical to supply chain reliability and the organization.
5 Considerations During a Supplier Audit
There is no one-size-fits-all approach for how to do a supplier audit, and the breadth and depth of an audit can vary depending on the product or process. However, according to Terrance Holbrook, MasterControl’s director of product with more than 25 years of experience in manufacturing, there are five often-overlooked actions that manufacturers can take to improve how they conduct supplier audits.
In an article for Pharmaceutical Manufacturing, Holbrook offered the following tips on how to audit suppliers:
- Conduct pre-audit research. Before setting foot on the audit site, review both parties’ expectations and responsibilities as laid out in the quality agreement, and prepare a prioritized checklist of items to review based on the material, component or service supplied. Additional areas of pre-audit research should include: past audit reports; company history using the supplier’s product; current product specification; importance of the product to the company; whether the product has ever failed; alternative manufacturers qualified; and interviews with in-house personnel about the supplier and the product.
- Review the supplier's reputation online. In addition to the traditional audit-preparation tasks, probe the supplier’s online presence. Examine the supplier’s own website and social media profiles, and look at review sites like Consumer Reports and the Better Business Bureau. What do other customers and users say about the company and its offerings? Also, search the U.S. Food and Drug Administration (FDA) website for information relevant to suppliers’ compliance with Current Good Manufacturing Practice (CGMP) regulations, including whether the supplier is the subject of an FDA warning letter, import alert or recall.
- Don’t take customer complaints for granted. Customer complaints should not be underestimated. They are a crucial source of information about the performance and quality of products under actual usage, which is why capturing and investigating issues received via this channel is important. Look for repetitiveness to determine whether other clients have had similar complaints about the product you currently purchase as well as the supplier’s product line outside your current purchases. If evidence in customer complaints reveals that the supplier has an issue, that evidence will be found through paperwork.
- Know if a supplier is outsourcing. If a supplier is outsourcing parts of its process, it’s important that you are notified of that fact and that you ensure the supplier has quality agreements with its own suppliers. Ask to review the supplier’s audit findings of its own suppliers; if the supplier doesn’t allow that, then ask to see the supplier’s incoming inspection of subcontracted materials, as well as any other documentation that will prove the supplier is holding its vendors to quality standards and receiving quality items.
- Keep the audit on track. If it seems like a supplier is being evasive during an inspection, or isn’t providing certain quality-related documents, it may be a deliberate attempt to hide quality issues. If the supplier is aggressively leading the audit team down certain paths during a tour, it may be to distract from process problems like nonconformances, deviations or failed lots. While it’s important to review processes and documents during an audit, it’s also important to actively listen to the supplier, read and understand situations, and stay focused on achieving objectives.
Conducted successfully, a supplier audit will identify, address and prevent problems in a supplier’s product quality or processes before the problems spread, ensuring the supplier consistently meets quality expectations.
To learn more about how to audit suppliers to ensure supplier quality, check out Terrance Holbrook’s “5 Tips for Conducting a Supplier Audit” published in Pharmaceutical Manufacturing magazine.