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Why are supplier management and control important?
Effective supplier management ensures sustainability and resilience of your business, as wells as underpinning the quality of your products. Your components, and therefore your suppliers, impact the performance and safety risks associated with your products. Legal manufacturers depend on the reliability of their suppliers to manage their risks ensure regulatory compliance. Component and service providers depend on suppliers to build and maintain a successful supply chain. When the suppliers fail – either through being unable to deliver or delivering substandard products – the remedial actions are costly and can be devastating to brand and revenue.
Building strong relationships with suppliers is key to achieving efficient supplier management within the organisation. DQS recommends the following steps and tips for businesses to follow to create mutually beneficial supplier relationships that comply with ISO 13485 and underpin business assurance:
1. The Mindset
Developing long-term relationships with your suppliers is crucial for integrating products into your supply chain’s ecosystem that align with your quality objectives. Short-term benefits need to be balanced with long-term strategic goals to ensure a higher level of commitment to quality across both your supplier’s and your operations. It is important to remember that once you have implemented your design freeze, changes to suppliers become costly and, therefore, setting a long-term vision that involves every partner in the supply chain and creating a partnership culture that offers benefits to all stakeholders involved has significant benefits.
2. Quality Agreements
Legal manufacturers of medical devices hold the ultimate responsibility for their products. In turn, they rely on the consistent quality of the components and services delivered by their suppliers, and the suppliers rely on their own suppliers. Quality agreements with suppliers effectively demonstrates the level of control you maintain over each aspect of the supply chain. What is a supplier quality agreement? A supplier quality agreement establishes a framework to specify the expectations of both parties. The agreement may include:
- Responsibilities, duties and duration of the agreement.
- Clarifications and definitions of key terms used in the agreement.
- Documents that should be delivered to you by the suppliers, including records for each product batch, any form of certifications available, etc.
- Quality checks for the products and processes, including criteria for product validation, what and how should the final check be done, etc.
- Commitment from the supplier to inform you of any proposed changes to the product or processes in advance of implementation or the requirement for your written approval before changes are implemented.
- Clear instructions of how changes should be communicated to each party.
- Strategy for managing corrective action/preventive action (CAPA) investigations.
- Requirements for visits / audits by your organisation or any certification body or regulatory authorities.
- Termination guidelines including clear requirements and conditions.
The quality agreement can be an important tool to filter potential suppliers and ensure those selected are held accountable for quality.
3. Monitoring and Audits
A core-requirement of the ISO 13485 Chapter 7.4 is the need for on-going monitoring and evaluation of your suppliers' performance. Establishing clear metrics in advance will help suppliers to understand precisely how their performance will be assessed and whether performance data or supplier audits will be used. Performance data can include:
1. Delivery Dates & Quantities, for example:
- On-Time Delivery Rate**: % of orders delivered on time.
- Order Fulfillment Rate**: % of orders delivered in full.
2. Product Inspection Report as:
- Inspection Pass Rate: % of products passing first inspection.
- Defect Density: Defects per unit inspected.
3. Non-Conformances of Suppliers’ Products:
- Non-Conformance Rate: % of non-conforming products received.
- Cost of Poor Quality (COPQ): Total cost of non-conformance.
4. Suppliers’ Third-Party Audits, for exaplme:
- Audit Pass Rate**: % of audits passed without major findings.
- Number of Major/Minor Findings: Total major and minor findings.
5. Customer Ratings and Reviews:
- Customer Satisfaction Score (CSAT): Average customer rating.
- Complaint Rate: Number of customer complaints per unit sold.
The established metrics will help you to set priorities and frequencies for supplier monitoring. It can be helpful to set up an internal scoreboard or evaluation sheet to track each supplier’s performance and adjust the monitoring based on compliance history. Your suppliers may benefit from you providing them with the feedback of your assessments as evidence of a reliable, good performance, will help them to improve their internal processes and secure further contracts.
4. Recognise Supplier Achievements
Lastly, recognising and rewarding suppliers who consistently meet or exceed expectations is key to developing sustainable partnerships. This can include granting preferred supplier status, offering financial incentives, or providing public acknowledgment. Creating positive, human, and personal connections within the organisation fosters stronger bonds and leads to more robust partnerships!
ISO 13485 Certification
Don’t know where to start for your ISO 13485 compliance or certification? Contact us for more whitepapers and guidance documents to support your quality management system implementation or an obligation free quote for compliance assessment and certification services. We look forward to hearing from you