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Quality physician heal thyself: taking a quality approach to supplier audit programs.

Doctors can make the worst patients, and quality professionals can focus so closely on suppliers' quality that they miss opportunities for improvement in their own programs. By applying basic quality principles in the evaluation of suppliers, improved efficiency and effectiveness will have an impact well beyond the supplier quality function.

The number of U.S. Food and Drug Administration warning letters attributed to inadequate supplier evaluations Supplier evaluation is a term used in business and refers to the process of evaluating and approving potential suppliers by factual and measurable assesment. The purpose of supplier evaluation is to ensure a portfolio of best in class suppliers is available for use.  has remained high throughout 2009. In 2008, 45 percent of medical device manufacturers that received warning letters concerning supplier practices were shown to be inadequate in meeting their supplier evaluation commitments per 21 CFR CFR

See: Cost and Freight
 820.50. So far in 2009, this figure is approximately 40 percent. While many factors influence such a trend, one factor that easily and effectively can be controlled is the supplier audit process. Although it may seem painfully obvious, taking a quality approach to auditing your suppliers often can be overlooked. There are numerous considerations that need to be properly managed beyond a basic procedure, checklist and spreadsheet of vendors.

The following quality fundamentals should be incorporated in your supplier audit program to maximize the effectiveness of your audit team:

* Define your process. Supplier audits are the result of many events involving multiple stakeholders Stakeholders

All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government.
 inside and outside your organization. The act of having a quality auditor on site at a supplier is just the tip of the iceberg tip of the iceberg
n. pl. tips of the iceberg
A small evident part or aspect of something largely hidden: afraid that these few reported cases of the disease might only be the tip of the iceberg. 
, with a significant amount of supporting work required before and after. The steps involved in audit preparation can include audit justification/prioritization, supplier liaison, legal approval, supplier history review, auditor coordination and pre-audit briefings. Following the audit, there is immediate action (if required), report preparation, content review and corrective action A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or  management through to closure. By mapping this process, steps and roles may be optimized (e.g., reassigning administrative tasks from auditors), and supplier audit as a risk management tool can be made more effective (e.g. defining broader internal action based on poor supplier audit results).

* Add checkpoints along the way. Because the audit process is time sensitive, backtracking (algorithm) backtracking - A scheme for solving a series of sub-problems each of which may have multiple possible solutions and where the solution chosen for one sub-problem may affect the possible solutions of later sub-problems.  after an audit has been performed is time-consuming and not always effective--ask any busy auditor about a supplier audit two weeks ago. Even changes made prior to an audit can have a major impact on the availability and efficiency of your audit team. Therefore, the addition of checkpoints in the audit process will allow you to zero in on all of the prerequisites of a successful audit. Basic questions such as, "Has another division of our company already performed an audit we can use?" and "Are there any areas [such as special processes] that require added attention?" will help with auditor coordination, and produce audits with more "teeth."

* Put the audit process in context. It is important to look at the audit process flow in the context of overall supplier control--i.e., the big picture. Many companies have developed an overall risk management strategy that impacts and will be impacted by the supplier audit process. For example, a risk management strategy will help determine higher-priority supplier audits. Likewise, results of the audit process will have an impact outside the audit process, such as the action required from a major supplier finding that could result in a change in risk status, a stop in production or a product recall.

* Perform a FMEA FMEA Fehler-Möglichkeiten & -einfluss Analyse (German: Failure Mode & Effect Analysis)
FMEA Failure Modes & Effects Analysis
FMEA Florida Music Educators Association
FMEA Florida Municipal Electric Association
 on the process. With a well-defined supplier audit process, a failure mode and effects analysis Failure Mode and Effects Analysis (FMEA) is a risk assessment technique for systematically identifying potential failures in a system or a process. It is widely used in the manufacturing industries in various phases of the product life cycle.  (FMEA) is an excellent way to prepare for exceptions that invariably in·var·i·a·ble  
Not changing or subject to change; constant.

 occur. This disciplined approach to identifying and preventing possible failures can save an enormous amount of time spent in escalation, backtracking and rework re·work  
tr.v. re·worked, re·work·ing, re·works
1. To work over again; revise.

2. To subject to a repeated or new process.

. It can address situations such as what happens if a supplier refuses an audit, what happens if inadequate evidence is obtained during the audit, and what happens if a supplier is unresponsive unresponsive Neurology adjective Referring to a total lack of response to neurologic stimuli . In performing a FMEA, you will map the entire process, showing every step, listing every critical feature. You will determine possible failure modes for each critical feature, as well as their effects (like having to revisit re·vis·it  
tr.v. re·vis·it·ed, re·vis·it·ing, re·vis·its
To visit again.

A second or repeated visit.

 a supplier). Then you will rate the severity, occurrence and detection of the failure and take appropriate preventative action.


* Add measurements and targets. Another quality fundamental is the use of data to improve decisions and identify sources of variation. There are many aspects of an audit program that may be monitored for control and improvement. These include team optimization (e.g., no dead time, grouping audits for reduced travel), on-target audit dates, audit report turnaround and corrective action closure. Note that the tracking of such parameters should allow for exceptions, such as an unusually large or complex supplier requiring more onsite audit time.

* Don't inspect quality in. If supplier audits are viewed in isolation, there can be a tendency to focus on the finished product, as opposed to the process that created it. If an audit report is incomplete or poorly written, there is a natural tendency to opt for greater screening, or inspection. By looking further upstream in the process, you are more likely to determine the source of variation, for example, inadequate auditor preparation, or lack of supplier guidance. This may lead to the addition of a checkpoint (programming) checkpoint - Saving the current state of a program and its data, including intermediate results, to disk or other non-volatile storage, so that if interrupted the program could be restarted at the point at which the last checkpoint occurred.  (see above) that will save backtracking, rework, and reoccurrence.

* Think CAPA CAPA California Alternate Performance Assessment
CAPA Captaris, Inc (stock symbol)
CAPA Confederation of Asian and Pacific Accountants
CAPA Creative and Performing Arts (school) 
. For an audit team, the urgency of the next audit creates pressure to quickly fix any problems that arise and move on. This approach covers the need for containment, but does not address the broader aspects of corrective action/preventative action (CAPA). With a well-defined process and suitable measurements in place, it becomes easier to identify and address the real problem source (not just the symptom). It also provides opportunities to spot potential problems and take action to prevent them from happening. The process owner The process owner is the person who co-ordinates the various functions and work activities at all levels of a process. This person might have the authority or ability to make changes in the process as required, and manages the entire process cycle to ensure performance  must "think CAPA" when addressing problems and evaluating the process for effectiveness.

By applying all of these fundamentals, your supplier audit process will be well placed to meet the increasing demands of the supplier quality function. Like other parts of your quality organization, the process should be subject to regular review and performance against goals. A more effective process will deliver better performance of your audit team, better visibility of supply chain risks to your entire operation and improved value from the supplier quality function.

Gerard Pearce is executive vice president of SQA SQA Scottish Qualifications Authority
SQA Software Quality Assurance
SQA Supplier Quality Assurance
SQA Society of Quality Assurance
SQA Singapore Airlines
SQA Sperm Quality Analyzer
SQA System Quality Assurance
SQA Statistical Quality Analysis
 Services Inc., a Rolling Hills Rolling hills are like a mountain chain, only a "hill chain" of hills that roll on and on continually. You will often find them in between plains and mountains, near major rivers, or randomly anywhere. The only places without rolling hills are deserts and flood plains. , Calif.-based company specializing in global supplier quality management. Gerard has more than 20 years' experience in combining the fields of quality, supplier management and technology. He published "The Purchasing Revolution" in 1999 and served on the committee of the World Congress of the International Federation of Purchasing and Supply Purchasing and Supply can have several different definitions. According to the Institute for Supply Management (ISM) [1], purchasing is defined as a major function of an organization that is responsible for acquisition of required materials, services, and equipment.  Management. He is heavily involved in shaping and implementing the global outsourcing quality strategy for SQA's Fortune 500 clients in a variety of industries, including medical device, pharmaceutical, aerospace and high-tech. He can be reached at or through
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Title Annotation:The Supply Chain
Author:Pearce, Gerard
Publication:Medical Product Outsourcing
Date:Oct 1, 2009
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