Practical Tips for Managing Supplier Risks in the Life Sciences Industry

Practical Tips for Managing Supplier Risks in the Life Sciences Industry

Florian Czaszewicz, Industry Solutions Consultant, Pilgrim Quality Solutions, an IQVIA company

It is critical today that risk-based thinking be embedded across respective quality and compliance activities throughout the Life Sciences. ISO13485:2016 regulations are driving the industry to this paradigm. I recently explored practical tips for managing life sciences supplier risks together with a team of consultants, including Dr. Carmine Jabri of E.M.M.A. International Consulting Group, Aida Markham of QACV Consulting, and Kenneth Christie of VTS Consultants, Inc. This post is the first in a two-part series that examines our findings, which you also can uncover on-demand here.

Supplier Risks – Get Ready to Jump In!

When examining practical tips for supplier risk, a sports theme may be helpful in developing the full picture. As an introduction, and to visualize what Risk Management is, imagine the parallel between the action of a man jumping out of a plane and all the means used to ensure drugs or medical devices are safe. For a successful outcome, and more importantly, to survive, the skydiver must rely on many elements that have been purchased or contracted such as the equipment, material, and services. The skydiver must also trust that other aspects are under control, such as the overall condition of the plane, certifications, experience, and capabilities.

Similarly, in the Life Sciences industry, organizations may not always understand or control the supplier-related risk picture. It is critical to be able to recognize the source, cause, forms, and criticality of supplier risks in order to avoid, reduce, contain, or mitigate them.

The supplier arena contains numerous disciplines and hundreds of players. For many Life Sciences organizations, the breadth of the Supply Chain encompasses all functional areas and specialties. If not well thought out, planned, carefully prepared, and formally managed, uncontrolled Supply Chain risks, combined with each supplier’s scale and complexity, could result in a “hard stop” to the sponsor’s usual business, requiring tremendous efforts to restart or recover from generated problems.

The responsibility of managing these risks efficiently is held by Marketing Authorization Holders, who must find ways to identify, prevent, control, and react to contain their negative effects. For this to happen, processes, systems, and resources must be aligned to mitigate risks throughout the value chain.


Practical Tips in Managing Life Sciences Supplier Risks

On-demand Webinar

View this webinar to discover key attributes of supplier risk management and best practices for maintaining a high-performance supplier base.

Supplier Risks

Know the Rules

The “rules” of the supplier risk game are the Regulations, Guidance, Directives, Standards, and Best Practices applicable to specific environments, market segments, or product types. A cooking analogy should make us envision these sets of rules as the nutritional guidelines to be followed to reduce risk and to maintain the organization’s general well-being. They are crucial, as they provide all the fundamental elements a Quality-Risk Program should contain to manage suppliers and contractors effectively. Adequate management decisions and actions should then derive from the application of this risk-management “recipe.”

To get to a state of compliance showing a total control of outsourced activities, it is essential that ongoing monitoring of changing requirements and evolving regulations take place. This not only maintains compliance, but also improves efficiencies, delivers safe, high-quality drugs, and prevents adverse events and recalls.

Preparation is Critical

Preparation is a key phase that paves the way for a good vendor risk management from the start. Adequate preparation enables your organization to take the lead in critical elements of supplier qualification and control.

  • The first move is to clearly define business user or system requirements. These essential requirements will be used to evaluate many aspects of the vendor’s capabilities to satisfy and conform to what is required and to explain how it will be achieved. Investing time and effort in defining clear requirements will pay off as it will create an opportunity to find the best suitable supplier candidates and to leverage suppliers’ strengths into competitive edge for your organization. Expectations such as success criteria must be explicit and unambiguous so that concerns or problems can be discussed, addressed, and resolved quickly.
  • This phase of supplier qualification is the perfect time to gauge the vendor’s understanding of your requirements, as well as their commitment, openness, availability, and responsiveness. It’s also the time to plan for contingencies when gaps have been identified.
  • Additional means such as onsite meetings, facility tours, demonstrations, workshops, and (of course) audits, are at the disposal of Life Sciences firms that are trying to understand supplier risk. These means should be deployed to check, examine, and test vendor capabilities and identify risks. In addition, contractual terms and legal agreements must be established to cover duties and responsibilities, services, pricing, liabilities, Intellectual Property (IP), Service Level Agreements (SLAs), and/or termination terms and conditions.
  • Finally, periodic review of supplier capabilities must be a part of Quality Audit planning. This enables your team to perform effectiveness checks and examine supplier issues to evaluate whether each vendor remains in a state of compliance with your requirements.

Stay Tuned for the Second Half

Resource planning, understanding the rules, preparation, and planning lay the foundation for a successful supplier-risk management program. Stay tuned for the second part of this post where we’ll provide practical tips for setting goals, coaching recommendations, and best practices for supplier performance and risk monitoring.

Pilgrim Quality Solutions

Pilgrim pioneered quality management software more than 25 years ago for regulated enterprises that needed a better way to deliver, track and oversee quality-related activities.