Regulated industry (i.e. medical products, drugs and devices) is one that relies heavily on suppliers for the provision of materials (e.g. APIs, packaging components, excipients, etc.) and/or services (e.g. sterilization, testing, warehousing/distribution, etc.) to support their core business.
Well Defined Process
Failures to meet the regulatory and compliance regulations requirements would potentially have a serious impact on the reputation and financials of an organization. The extent of the impact associated with supplier non-compliance varies and will depend on how critical the supplier is to the organization.
Having a well-defined process for identifying and monitoring critical vendors is key to mitigating such risk. The following provides a summary of criteria to distinguish a critical supplier, recognizing that the distinction should be applied specifically and customers should be wary of identifying broad categories of suppliers as critical (e.g. although certain API suppliers may be critical vendors, not all API suppliers should automatically be considered critical.)
Supplier Selection
Over the years, supplier selection criteria have evolved and will continue to change as a result of increased competition, globalization of markets and changes to the regulatory landscape.
Identifying critical vendors should be an integral part of the supplier qualification process. Factors that can be used to identify critical vendors may include, but are not limited to, the following:
- Criticality of the materials and/or services to the business. Materials and/or services associated with the production of drug product and/or medical device that are i) medically necessary (lifesaving) and ii) have limited alternatives, should be considered critical.
- Availability of the material and/or service. Material and /or services that are provided by limited number of suppliers or by a sole supplier pose a higher risk to business.
- Number of products/material supplied. The higher the number and/or volumes of material sourced from a supplier, the greater the risk to the supply chain.
- Financial impact. This factor can be measured by how significant the disruption of supply of critical material and/or services by a supplier would be.
Considering the above listed factors, a critical vendor can be defined as:
A vendor that is deemed to be the major or sole provider of a critical materials and/or services, whose failure to supply goods/and or services would have the most significant impact on the organization/business.
A vendor’s criticality should be reevaluated on a regular basis as the criteria under which they are being evaluated are not static.
For instance, a supplier deemed not critical during the initial assessment may be re-classified as a critical if they begin to supply new and more critical products and/or services.
Identification of Critical vendors will ensure that:
- the critical vendors are subjected to the appropriate control and monitoring levels
- improve the utilization of available control and monitoring resources by assuring they are assigned where they are most needed.
