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Purchasing Controls: Draft the Best Supplier Quality Agreement

Unacceptable purchased products account for about 17 percent of medical device recalls each year. Many of these products are considered unacceptable because the finished device manufacturer did not properly describe the product or agree to the terms of accretion and rejection with their suppliers.

I can’t complicate this. Some companies call their relationships with suppliers “partnerships” or “understandings”—it doesn’t matter what you call it; the manufacturer must define the type and extent of control exercised over products, services, suppliers, contractors and consultants based upon a documented process for evaluation and selection criteria. If the supplier doesn’t understand the directions, how can that supplier properly fulfill the requirements?

You’re right; they can’t.

Purchasing Controls is the only section of the QS Regulation and ISO Standard in which business and quality systems management overlap ever so blatantly, with the objective evidence realized from that association presented in terms of quality assurance and various levels of measured controls. When a medical device manufacturer chooses to employ suppliers, this manufacturer must ensure control over any product, process or service obtained from these suppliers. The controls may extend further if a supplier subcontracts work to sub-tier relationships that, based upon inherent risks, may have to define their specific scope of compliance.

The bones of this article, in part, came from a roundtable discussion during Breakfast with the Experts at OMTEC® 2015.

Quality Agreements and Objective Evidence
Quality agreements between manufacturers and suppliers had been in play way before the new 21 CFR, Part 820 was made effective in the late ‘90s. It’s gone from “just about the business” to “business and quality issues” to just a “quality assurance-aligned document”. For many years, the purchase order (PO) was considered to be an agreement, and it remains a popular legal document for conducting business between two companies, i.e., it can be great objective evidence as long as both parties sign the PO. Agreements can be advantageous for a solid foundation of mutual understanding and can set the stage for agreements between companies based upon risk management principles. This is where we have an opportunity to quantify our relationships in terms of defined deliverables, acceptance activities and clear objectives for business success.

The cGMP-QS Regulation indicates that purchasing documents shall include, where possible, an agreement that the suppliers, contractors and consultants agree to notify the manufacturer of changes in the product, process or service so that manufacturers may determine whether the changes may affect the quality of a finished device. The quality agreement is an effective management tool to prevent problems and reduce their impact should they occur. With the increased emphasis on purchasing controls, you can expect strong attention to this area during an FDA inspection.

Typical areas generating objective evidence for compliance that could be considered for finalizing this agreement between the manufacturer and its supplier will address these areas:

1) Acceptance and verification activities
2) Complaint handling
3) Responsibilities for root cause analysis and investigation
4) Corrective action and preventive action
5) Product and Process risk management
6) Design responsibilities
7) Labelling/traceability requirements
8) Technical documentation as supplied
9) Handling of non-conformities
10) Change control requirements
11) Creation and retention of documents and records
12) Supplier audits
13) Product recall
14) Periodic evaluation or re-evaluation of the supplier’s data and operation

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