A manufacturer’s ability to maintain high-quality products and regulatory compliance depends largely on its suppliers’ own quality-related activities. Supplier audits can be an important tool for manufacturing organizations to ensure their suppliers are consistently delivering high-quality parts, materials, components or ingredients for their finished products.
Leveraged correctly, supplier audits can identify, address and prevent problems in a supplier’s product quality or processes before the problems spread.
The audit process and timing varies depending on its purpose and who’s conducting it, but for life sciences manufacturers, there are generally three instances when a supplier audit is called for, no matter the company or industry:
If a critical supplier is exhibiting issues with product quality or delivery, Quality Support Group (QSG) recommends conducting audits on a six-month interval and keeping in constant communication. If a critical supplier is performing well, we recommend an audit once a year.
A supplier audit plan should be risk-based and address three overarching areas.
#1: Business System Aspects Most Important to Your Business and/or Supply
Audits should look at the business systems that are affecting the performance shortfalls of the supplier and ensure action is being taken to address the gaps in the business. They should take into consideration the root cause issues you’ve identified through the corrective action system. Other matters to assess during an audit are:
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#2: Compliance Where It Is Critical for Business Reliability
During a supplier audit, it is also important to assess compliance where it is critical for business reliability. For instance, has the supplier clearly identified the complete list of regulatory requirements that must be met? What are the supplier’s internal processes to ensure those regulatory requirements are being addressed, maintained and improved on? Critical audit activities include:
International Organization for Standardization (ISO)-related standards incorporate requirements that, if implemented properly, your organization can benefit greatly. But do not assume certifications by ISO or other regulatory bodies always correlate to performance. Just because a supplier is certified to a certain ISO standard, it doesn’t mean the supplier’s performance will be satisfactory, even in product quality.
#3: Performance – But of What?
During any supplier audit, always focus on process improvement and ensure processes are monitored and evaluated. Performance evaluation is tied to the risks within the organization. For instance, if you are looking at performance in terms of regulatory compliance, you are looking for:
While product quality and compliance are important in supplier performance, performance can also involve safety or cost or be environmental. If you are looking for a supplier to have high reliability in providing a product/service, they also need to have other things in place, such as financial stability.
To make sure you’re auditing the right suppliers, it’s important to map out the supply chain, especially for critical suppliers, and find where in the chain a supplier should be audited. In searching for weak points in the link, you may find that the source of the problem is an immediate supplier, or it may be a supplier’s supplier or another subcontractor further down the chain.
One of the most common failures in conducting a supplier audit is turning it into a paperwork exercise, listing all sorts of documentation and exercises in an audit report without solid recommendations for improvement. Every supplier audit should generate opportunities to improve. When conducting any kind of audit, supplier audits included, manufacturers must take a risk-based approach.
Angelo Scangas is president and CEO of Quality Support Group (QSG), an international consulting and training firm delivering organizational continuous improvement. He has more than 35 years of experience in engineering, quality systems, operations and process improvement (Lean Six Sigma) in the medical device, health care and other industries. His background includes product development, design/process engineering, supply chain management, supplier quality, quality system design and implementation and regulatory compliance. Scangas received a M.S. degree in Manufacturing Engineering from the University of Massachusetts and a B.S. degree in Chemical Engineering from Worcester Polytechnic Institute.