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8 Questions to Ask When Planning Supplier Audits for 2024
Managing a supplier audit program can be a challenge. Here are a few questions we see firms often miss during audit planning.
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Quality leaders often begin planning their annual supplier audit program in advance, often several months before the start of the new year. This allows sufficient time for comprehensive planning, coordination, and resource allocation.
Teams face a complex and critical task when planning annual supplier audit programs. While some questions are obvious, there are often non-obvious or overlooked questions that can significantly impact the effectiveness of the audit program.
Below are some questions, both obvious and especially non-obvious, that should be considered as you plan audits for 2024, along with some recommendations.
Need audit support in 2024? We can help.
FDA’s focus on vendor, supplier, and contract manufacturer compliance is tightening. The supply chain is only as strong as its weakest point. To protect yourself and your stakeholders from the consequences of recalls, seizures, injunctions, and other enforcement actions, it is critically important to identify and remediate all compliance issues present in your outsourced operations through comprehensive audits and corrective actions conducted by experienced quality professionals.
Our certified, experienced auditors plan, schedule, and execute vendor/supplier quality management audits to identify areas of conformance and nonconformance with applicable global regulations. Following assessment, our experts provide a detailed report including all observations, deficiencies, and a risk-based corrective action plan for improvement.
With an enhancement plan in place, our quality professionals will work closely with you to provide recommendations, resolve compliance issues, track corrective actions, and communicate the status of resolutions with company management. This comprehensive approach to vendor/supplier quality management strengthens your vendor/supplier relationships while ensuring your products are of the highest quality through a quality system that is compliant and efficient.
Our vendor/supplier auditing services include:
Vendor/supplier audit plan strategy and creation
Vendor/supplier audit execution and project management
Vendor/supplier audit plan maintenance and support
Learn more about our auditing services and read our auditing case studies:
1. Are you prioritizing supplier audits based on risk?
…and how are you assessing and categorizing the risk levels of different suppliers?
Prioritizing audits based on risk ensures that resources are allocated effectively, focusing on suppliers that pose the highest risk to product quality and compliance.
FDA and other regulatory bodies emphasize a risk-based approach in quality management systems. Audits should be prioritized based on factors like the criticality of supplied materials, supplier's compliance history, and potential impact on product safety.
We recommend developing a risk assessment matrix to categorize suppliers. Consider factors like supplier criticality, previous audit findings, and the complexity of supplied products. Regularly update the risk assessment to reflect changes in supplier performance or product portfolio year-to-year.
Here’s a simple template that could be versioned or tailored to fit:
Here’s how to use a risk matrix like this to organize suppliers by relative risk:
Assess Likelihood: Determine the likelihood of a problem occurring with each supplier. This could be based on historical performance, the complexity of the products or services they provide, their location, and other relevant factors.
Assess Impact: Determine the potential impact if a problem occurs with each supplier. Consider factors like the criticality of the supplied products/services to your operations, potential financial impact, impact on customer satisfaction, and regulatory implications.
Place Suppliers on the Matrix: Based on your assessment, place each supplier in the appropriate cell of the matrix.
Prioritize Audits and Resources: Suppliers in the 'High Risk' category should be prioritized for more frequent and thorough audits. Those in the 'Low Risk' category might require less frequent or less intensive audits.
Review and Update Regularly: The risk matrix should be a living document, reviewed and updated regularly based on new information, changes in supplier performance, changes in your business needs, or changes in the regulatory environment.
(Remember, the specific criteria for likelihood and impact should be tailored to your industry, the nature of the products or services you receive from suppliers and your company's risk tolerance. This matrix serves as a starting point and should be customized to fit your specific needs.)
Here’s a fictitious example to show what a finished matrix might look like:
Supplier A: Provides APIs for critical drugs. Past issues with quality control.
Supplier B: Supplies specialized packaging. Minor past issues with delivery delays.
Supplier C: Provides lab equipment. Essential for R&D but has multiple alternatives.
Supplier D: Offers office supplies. Low impact on operations.
Supplier E: Provides non-critical software for administrative tasks.
Supplier F: Offers cleaning services for manufacturing areas. Important but replaceable.
Supplier G: Supplies secondary packaging materials. Occasional quality issues.
Supplier H: Provides non-essential lab consumables.
….and so on.
2. Are you considering the historical performance and improvement trends of suppliers when setting your audit schedule?
…and are there any trends or recurring issues that need special attention?
Understanding historical performance helps in identifying patterns, recurring issues, and areas needing improvement, allowing for more targeted audits. Regulatory bodies expect continuous monitoring and improvement. Trends in supplier performance should directly inform your audit planning.
We recommend maintaining a supplier performance dashboard tracking key metrics over time. Use this data to identify trends and focus areas for audits. Regularly review and update the audit plan based on performance trends.
Many ERP systems like SAP, Oracle, and Microsoft Dynamics have modules or functionalities allowing supplier performance tracking and reporting. These systems can integrate data from various sources, providing a comprehensive view of supplier performance.
QMS systems like MasterControl, TrackWise, or Qualio also offer features for supplier management, including performance dashboards, trend analysis, and audit management. These tools are specifically designed to meet regulatory requirements and quality standards.
For smaller companies or those with limited budgets, spreadsheet software like Microsoft Excel or Google Sheets can be used to create basic performance dashboards. While not as sophisticated, they can still provide valuable insights when set up correctly.
3. Are you aligning the frequency and depth of audits with the risk level and past performance of each supplier?
…and are high-risk suppliers receiving more thorough and frequent audits?
Aligning audit frequency and depth with risk and past performance ensures that high-risk suppliers are monitored more closely, enhancing product quality and compliance.
We recommend developing a tiered audit approach where high-risk suppliers are audited more frequently and in greater depth. Teams can use the risk-based matrix to determine the appropriate cadence and level of scrutiny for each supplier.
Document the risk assessment process and the rationale behind the categorization of each supplier. Regularly review and update the risk matrix to reflect changes in supplier performance, changes in supplied materials, or changes in regulatory requirements.
Integrate the risk-based matrix approach into your QMS. Ensure that it aligns with other quality processes and that relevant stakeholders are trained on the approach.
4. Do you have an auditor resourcing partner who can supply the auditors you need—where and when you need them?
…and have you considered the specific requirements of the products or services provided by each supplier?
Having a reliable auditor resourcing partner ensures access to qualified auditors with the necessary expertise, especially in specialized areas. Auditors must have appropriate qualifications and knowledge. FDA and other bodies expect auditors to be competent in the specific areas they are auditing.
We recommend partnering with a reputable firm specializing in auditor resourcing. Ensure they understand your industry and can provide auditors with relevant expertise. Evaluate the firm's track record and auditor qualification processes.
Here at The FDA Group, we conduct thousands of audits each year. We pair you with former FDA and industry professionals who have extensive knowledge of the FDA's current inspection techniques and expectations that go beyond the words of regulation. Through mock FDA audits, remediation support, and resourcing for your quality system, you can make the appropriate adjustments to meet all FDA regulations.
In 2020, we sat down with one of our top former FDA consultants to discuss preparedness for PAI audits. Watch our conversation below.
5. How are you engaging with your suppliers in the auditing process?
…and are you communicating expectations clearly and providing feedback post-audit?
Engaging suppliers in the audit process promotes transparency, collaboration, and a mutual understanding of quality expectations. While not explicitly mandated, regulatory bodies encourage collaborative approaches to quality management.
We recommend communicating audit schedules and expectations clearly to suppliers. Involve them in pre-audit discussions and encourage open communication. Provide constructive feedback and support for improvement post-audit.
6. Are you leveraging a consulting firm that can both supply auditors and manage those audits?
…and can that firm work directly in our audit management system for even more efficiency?
The right firm can provide expertise, manage audits, and offer insights for improvement, leading to more efficient and effective audits.
We recommend choosing a consulting firm with experience in your industry and a track record of successful audits. Ensure they can integrate with your audit management system and understand your specific needs.
We boast a few differentiators here:
Right resource, first time (95% client success rate)
97% client satisfaction rating
Dedicated account management with each audit
Auditors in 47 countries and 46 states
Is your team using Veeva as your eQMS? In addition to conducting audits, we can complete your data entry directly within your Veeva system, saving you significant time and attention.
Our dedicated project support team works directly with our auditors to streamline the process of inputting audit reports into the Veeva platform. We’ll guide your Veeva Administrator through the steps to confer the necessary user permissions in the platform and take care of the audit input on your behalf.
Contact us to learn more about our auditing services.
7. Do you have mechanisms in place for providing constructive feedback to suppliers post-audit?
…and how do we ensure that feedback leads to actionable improvements?
Constructive feedback helps suppliers understand deficiencies and encourages continuous improvement.
We recommend developing a structured feedback process. Use clear, specific, and actionable language. Follow up on feedback to ensure implementation of improvements.
Here’s a simple model you can implement:
Preparation and Communication: Develop a standardized feedback template with clear, specific, and actionable language. Communicate audit objectives and feedback expectations to the supplier before the audit.
Immediate Debrief and Written Feedback: Conduct a post-audit debriefing session to discuss preliminary findings. Provide formal written feedback within a set timeframe, categorizing findings based on severity and including recommended actions and deadlines for corrective measures.
Corrective Action Plan Request and Review: Request a detailed CAPA from the supplier, addressing each finding with specific actions, responsible individuals, and timelines. Review and approve the CAPA, ensuring it adequately addresses the issues.
Follow-Up and Monitoring: Schedule follow-up interactions to monitor the implementation of the CAPA. Document progress and ensure corrective actions are completed within the agreed timelines.
8. Do you have a clear and structured remediation plan to address issues discovered during audits?
…and how detailed and actionable is this plan?
A clear remediation plan ensures that issues identified during audits are addressed promptly and effectively, mitigating risks. Regulatory bodies expect prompt and effective corrective actions in response to audit findings.
We recommend developing a detailed remediation plan with specific actions, responsible parties, and timelines. Ensure the plan is actionable and tailored to the severity of the findings. Monitor the implementation of the plan and verify its effectiveness.
Our active remediation model goes beyond consulting to solve a variety of compliance problems while offering ongoing project management and training services each step of the way. Once remediation is complete, we plan, implement, and audit your quality system to ensure regulatory compliance is maintained well into the future.
Our 4-Step Approach to Remediation:
Analyze observations and choose the quality investigation model best suited to thoroughly understand the compliance issues at hand.
Launch an internal investigation with the assistance of key stakeholders to assess all affected processes and reveal the root causes of noncompliance.
Draft a comprehensive remediation plan and assure agreement by all stakeholders.
Implement agreed-upon corrective and preventive actions with the appropriate amount of supervision and monitoring.
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