Reducing risk with supplier audits

Aug 25, 2014 | News

“Each manufacturer shall establish and maintain procedures to ensure that all purchased or otherwise received product and services conform to specified requirements.”

Part 820, Subpart E

Section 820.50

Code of Federal Regulations

This one, short sentence in the Federal Code can cost you big in time and money if you’re a medical device or diagnostics manufacturer. Its meaning is clear – you are not only responsible for the quality, efficacy, and safety of the products you make, but for the contract manufacturer's raw materials, components, and services that go into them as well.

According to the FDA, suppliers providing materials or services that fail to conform to regulations are a direct cause for increases in medical device recalls. As a result, the agency has been stepping up its vigilance of medical manufacturers and holding them accountable for supplier nonconformance. The FDA now requires subcontractors to be registered, and in a couple cases, subcontractors have been audited not because they are making mistakes, but because their customers experienced problems directly linked to the supplier.

Part 820 Subpart E Purchasing Controls tasks medical device manufacturers with establishing and maintaining procedures that ensure all products and services purchased from third party suppliers conform to FDA regulations. In short, Section 820.50 requires you to:

  • Select, Evaluate, Qualify, and document your suppliers, contractors, and consultants based on their ability to meet FDA requirements
  • Define and exert the proper control needed for materials and suppliers based on evaluations
  • Produce and maintain records of all relationships, transactions, and materials

Improve supplier performance with an audit program

Every medical manufacturer should consider developing and implementing a supplier performance audit program to help them reduce risk as well as monitor and maintain supplier compliance. A supplier audit program can go a long way to minimizing cost of poor quality (COPQ) risks that can delay or derail a new product launch and cripple current product sales. A properly designed and managed supplier performance audit process will enable you to establish:

  • A risk-based supplier quality program to meet FDA regulations
  • The level of auditing and qualification documentation you’ll need for your suppliers
  • Your regulatory responsibilities regarding your suppliers
  • The values and quality requirements your suppliers will need to meet if they want to do business with you

MEDIcept auditors perform well over 100 audits per year for their clients. Many companies do not have the internal resources to perform all the supplier quality audits their procedures require. Commonly these companies either change their procedures to reduce the frequency of audits required or simply become noncompliant; both options open the company up to FDA scrutiny and unacceptable product. MEDIcept can supplement your staff. For some companies we perform all their supplier audits because it is more beneficial than taking their staff out of the office. At other clients we helped streamline the supplier qualification and monitoring process, reducing the number of on-site audits by increasing the amount of statistical trending.

The current FDA emphasis on supplier performance and compliance, coupled with the benefits associated with reducing COPQ and supplier risk, make a compelling case for implementing a supplier performance audit program. If you’d like more information or want to get started on supplier auditing, visit our website or call us at 508-231-8842.