Risk Management within the Global Supply Chain - Pharmaceutical Technology

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PharmTech Europe

Risk Management within the Global Supply Chain
The authors describe a program to identify, prioritize, mitigate, and communicate risks in manufacturer–supplier relationships.


Pharmaceutical Technology


Risk communication

After the supplier risks have been identified, reduced to acceptable levels, and communicated, it is important to establish a formal agreement to ensure that the supplier maintains a state of control and the manufacturer is an active participant in the supplier's quality- and risk-management programs. An effective way to establish this relationship is through a quality agreement. The quality agreement is a contract between the pharmaceutical manufacturer and its supplier of critical components or materials used during the development and manufacturing processes. The purpose of a quality agreement is to clearly define supplier qualification requirements, product and process specifications, regulatory-compliance requirements, management responsibility, a risk-management plan and a comprehensive communication plan.

The quality agreement should also specify the manufacturer's expectations for processing changes that the supplier considers. The supplier should inform the pharmaceutical manufacturer of proposed changes to their manufacturing process in a "Notification of Change." The pharmaceutical manufacturer can thus evaluate the impact of the change on its final product. The manufacturer's previously identified management team should approve the change before the supplier implements it. Even the smallest change to a supplier's process can have an immense effect on a manufacturer's product or process. Establishing and maintaining a quality agreement is essential to controlling this potential risk.

Once established, the quality agreement should be periodically reviewed and monitored for effectiveness. Predetermined quality criteria such as the number of products out of specification, CAPA, and the number of product complaints should be measured, and trends should be investigated. The quality agreement must be evaluated regularly to ensure that required updates are implemented and communicated to each party in a timely manner.

Risk review

In addition to monitoring quality criteria, it is recommended that the manufacturer conduct periodic supplier audits to ensure and verify that the supplier is maintaining a state of control, meeting the pharmaceutical manufacturer's requirements, and employing a quality-management review system. The manufacturer should evaluate its suppliers according to defined criteria and procedures. Results should be documented. Each supplier that a manufacturer selects should have a demonstrated capability of providing products or services that meet the established requirements specified in the quality agreement. Once a supplier is selected, its performance must be monitored periodically. The frequency of monitoring should be commensurate with the significance of the product or service the supplier provides. The complexity of the service and its potential effect on the finished product's performance also should be considered.

Planning for a supplier audit is critical. Supplier audits should be scheduled according to the product and process risk assessments. The interval between audits should be established according to the significance of the material for final-product performance and the supplier's demonstrated ability to manufacture to the specified requirements consistently. An evaluation of the supplier's past history in providing similar products or services should be included in the assessment when possible. Written mail surveys or questionnaires frequently are used to assess the supplier's quality plan, test and inspection procedures, validation history and references, and the results of previous regulatory inspections or registration audits. Often, one set of questions will not fit all suppliers. Also, the focus of supplier audits can evolve as the relationship between the manufacturer and supplier matures. Though previous relationships with a supplier and registration to a specific industry standard such as ISO 9001 are important to manufacturers, they should not rely solely on previous audits and certifications as evidence that a supplier can provide acceptable products. Instead, manufacturers should conduct on-site supplier audits to assess supplier risk and establish conformance.

The supplier audit helps identify nonconformances that occur in many processes throughout the product life cycle—from the design process to the manufacturing process to the distribution process. Supplier audits can build both parties' confidence and provide a system for high-quality technology transfer.

In addition, an audit helps the supplier understand the pharmaceutical manufacturer's expectations. Supplier audits generally provide objective analyses of the vendors and can be fact gathering tools to ensure that the supplier meets the manufacturer's expectations, thus enabling control over the quality of the product.


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FDASIA was signed into law two years ago. Where has the most progress been made in implementation?
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