Quality Across the Supply Chain

As our product and service value chains expand globally, OEMs in various industries are outsourcing more of their products and services instead of keeping them in house. This has heightened the need for clear communication and managing supplier relationships to ensure that the quality of the product or service meets original specifications. More often than not, customer satisfaction has become a complicated, global process.

The Food and Drug Administration (FDA) has increased its focus on quality in the supply chain. The supplier quality issues that were exposed in the recent case of tainted Heparin, for example, is just one illustration of why regulatory bodies such as the FDA have turned their attention to the extended supply chain. Most industry verticals are currently focusing on identifying “potential supplier problems” that can harm brand reputation and drive up costs. No matter what industry you are in, there are certain processes that should be incorporated into a supplier management program to help you select and foster the appropriate supplier relationships and make certain that product quality and compliance are the focus across the entire value chain.

Quality, productivity, and delivery

It is the manufacturer’s responsibility to establish quality controls and provide documentation for obtaining products and services from suppliers. To do this properly, risk must be assessed throughout the supply chain. If a product is available from only a few suppliers, it is vitally important to keep risk low to avoid shortages. For example, verifying the supplier’s capacity and delivery system can sustain the upstream supply is part of risk analysis.

Suppliers and contract manufacturers are constantly evaluated in three major areas: quality, productivity, and delivery. Suppliers operating with a strong quality management system (QMS) can consistently lead in these areas. Elements of a solid QMS include standard operating procedures in which employees are trained; a documentation process for procedures and instructions that allows traceability and accessibility; the ability to monitor quality deviations, component nonconformance, or process variances; validated systems in place for root cause analysis and corrective and preventive action; and the ability to take a collaborative approach to change management.

Enterprisewide supplier quality management software enables manufacturers to have supplier-related information on which they can rely. The best software allows supplier data, such as inspection data, to be received or input directly from the supplier, giving the manufacturer real-time visibility rather than waiting for reports that arrive with the product—or worse yet, waiting for periodic inspection reports. Having this information up front allows manufacturers to work with suppliers on improving process quality rather than data collection. Real-time data mean that manufacturers can see when parameters fall outside established thresholds, and they can take action in a timely manner, many times even before the products leave the supplier facility. This real-time information helps in providing input on sampling plans and inspection methodologies.

Process validation fits in at all levels in the supply chain. Validation is the process of precisely documenting that a workflow or system meets its predetermined specifications and quality attributes. Validation helps define parameters and acceptable tolerances. Verification through various audit procedures ensure that processes and procedures are being executed as designed and agreed upon during the supplier selection process.

Cost of quality

Quality is often viewed as a “cost” to an organization. However, lack of quality can entail great loss and be detrimental to brand name. Rework, scrap, line shutdowns, freight expediting costs, recalls, and penalties are expensive consequences of poor quality. Manufacturers and contract suppliers, along with their downstream suppliers, must take these costs into consideration when collaborating to develop a true enterprisewise QMS.

Quality systems that improve the efficiency and productivity of personnel are cost-effective. An integrated software solution can automate many of the functions that typically eat up manpower, and electronic “paper trails” are generated for all functions, which saves time and money during audits.

There are many software solutions on the market, but keep in mind that a solid supplier management platform will provide a user-friendly interface and configuration tools in addition to best-practice templates based on years of experience. Ideally, supplier management software should be a fully integrated solution that provides users with a full range of quality tools for documentation, validation, training, auditing, inspections, nonconformance, corrective and preventive action, complaints, risk, and calibration. Such a solution provides users with metrics and key performance indicators, thereby improving decision making for the enterprise.

Minimizing risk by focusing resources on potential problems before they occur improves quality and saves the enterprise as much money as any other cost-cutting strategy that might be deployed.

About The Author

Kari Miller

Kari Miller is the senior director of industry solutions and product management at Pilgrim Software. In this role, she is responsible for creating a product strategy and solutions that will address the enterprise risk, compliance, and quality management market space. Additionally, she manages the industry team which demonstrates Pilgrim’s value proposition to its customers and prospects. With years of software experience in the life sciences, automotive, consumer packaged goods, and food and beverage space, building quality into products and processes is a way of life.