Outsourcing non-core functions helps biopharma companies and device manufacturers become more agile and adaptive to market demands — but it also leaves them vulnerable to shortfalls in the partners’ quality systems. That creates the potential for patient health risks that can have serious financial and brand repercussions if companies aren’t vigilant in the way they choose and manage these relationships.
To mitigate quality risks while continuing to benefit from the cost and infrastructure savings that come from an outsourcing model, biopharma and medical device companies need to put a robust process in place for assessing their suppliers’ quality systems that focuses on eight key components: process, people, tools, technology, training, communication/change management, continuous improvement and governance. At the recent Society of Quality Assurance (SQA) conference in April, we presented what these eight components involve, and why they are critical to an effective assessment program. Here are the highlights.
- Process. Prior to going on-site, the outsourcing company should conduct a pre-assessment of the supplier’s culture, quality system, and products to ensure minimum standards are being met. That assessment should be followed by a virtual meeting between the two teams to review the overall assessment objectives, expectations, dates and materials. Next, it is important to conduct a kick-off meeting to review objectives, and create an alignment strategy to identify observations and outline any necessary corrective actions. After the assessment is conducted, the assessment team should generate a final Assessment Report for the supplier, and establish ongoing status meetings to track identified observations.
- People. Assessment programs flourish when they include cross functional teams with strong representation and expertise from both the supplier and the outsourcing organizations. These should include a steering committee, with leaders from the supplier’s quality, technical operations, and supplier relationship management (SRM) groups, and the outsourcer’s compliance team; and a program management office to oversee day to day activities, including supplier selection, assessment schedules and scorecard reviews.
- Tools. A successful supplier assessment program relies on five unique tools: An assessment workbook that contains all the questions needed to uncover risks; kick-off documents to set the tone and secure buy-in; an alignment plan that lays out observations and corrective action plans; executive summary and assessment reports to communicate findings to leadership; and scorecards to track systemic issues and opportunities across the supply chain. Together, these tools provide the infrastructure that teams need to conduct successful assessments, and to drive to valuable insights for both the sponsor and the supplier.
- Technology. Technology is key to automating the above tools and enabling the assessment teams to more efficiently complete program deliverables. The best assessment teams will have a database in place to track observations, a knowledge management system for all stakeholders to access and share files, and an observation tracking database that can be utilized to track open observations identified during supplier assessments.
- Training. Outsourcing assessment programs involve multiple experts, all of whom require training on how to ensure consistency and clear insights into systemic, global supply chain risks and opportunities.
- Communication/change management. Most traditional audits are one-sided exercises in which observations are assigned to the organization being audited. An effective supplier assessment program is different in that it is meant to be a collaborative exercise in which both organizations proactively uncover issues risks and work together to mediate them. Such a collaborative approach takes constant communication and a willingness to embrace the change necessary to enhance the operation for everyone’s benefit. This willingness to change is the only way a program like this can be successful.
- Continuous improvement. Throughout the assessment process, managers and steering committee members should seek out opportunities for improvement. Sponsors should hold partners accountable for continuous improvement efforts, and use a scorecard to define and measure quality success metrics. Though it is important to note that adding new improvements should not happen too frequently in order to maintain output consistency. Updating the assessment tools twice a year is a reasonable expectation.
- Governance. Governance of the assessment process can be provided through a variety of leadership efforts, including steering committee meetings to reinforce the goals and objectives of the assessment, stakeholder engagement meetings to confirm the program is on track, and meetings between the program manager and compliance team to review findings from recent assessments.
By adhering to the eight components of a supplier assessment program, outsourcing companies can uncover the supply chain risks that might derail their projects, and improve the relationships with their suppliers. This benefits the business, their supplier, and the customers who they serve.
This article was co-authored by Michael Phinney, Consultant, Quintiles Advisory Services.