Contract Service Providers: Forward Thinking in Supplier Management

Virtual manufacturing is common among startups and entrepreneurs building a new company or project with a prudent fiscal approach. Intellectual property and an experienced contract manufacturer can make it a reality. Harnessing a contract manufacturer’s resources and experience—whether for components or finished devices—is a cost-effective way to bring a medical device to market. Similarly, outsourcing quality or regulatory activities to qualified suppliers may allow a company’s quality management system (QMS) to incorporate best practices and its regulatory submissions to thereby be effective. Contract manufacturers and regulatory and quality service providers with extensive and eclectic backgrounds can augment an organization’s cumulative skillset. However, there are numerous considerations in identifying and managing suppliers to provide these benefits.

Supplier Controls
When considering service providers, companies should verify the supplier controls in their QMS are appropriate for managing suppliers responsible for the services provided. For example, the level of manufacturing (component vs. finished device) or service (ad hoc consultation vs. ongoing quality management) must be considered when scoping supplier management processes. Consider the criticality of the service or product and gauge whether the QMS supplier controls are appropriately developed and include the necessary tools.

Companies should also consider how their existing procedures assign roles between suppliers and their internal functional areas. In what way(s), for example, is design approval and product release criteria managed between the organization, a contract manufacturer, and/or any contract quality organizations? Suppliers may manage all quality release processes and issue all product with certificates of conformance to a company’s specifications. Or manufacturers may conduct final quality release inspections that can vary in their level of involvement—ranging from a review of records to on-site source inspections of actual product prior to release. These options can impact various QMS procedures, so companies should carefully examine their current systems when considering different options. A risk-based supplier management program and adequate quality control tools will allow organizations to tailor their requirements to ensure product quality with varying external variables.

Scope of Services
Medtech firms must decide the tasks they want their suppliers to perform. While it is tempting to outsource all manufacturing, regulatory strategy and submissions, and QMS activities, companies should keep some activities under their immediate control or at least with proactive management.

By completely outsourcing a role to a supplier, companies are in danger of being wed to that supplier for better or worse. For example, an organization that completely outsources its QMS enmeshes the service provider with the firm, creating a potentially costly and inefficient relationship. Other possible drawbacks to outsourcing this particular service include:

• Limited visibility between the company and contract QMS could trigger errors and miscommunication between the organizations.
• There can be a lack of engagement from contract quality personnel compared to employees who are vested members of the contracting organization.
• An outsourced QMS distances executive management further from the quality system for which they are ultimately responsible.
• Companies will have limited control over personnel qualifications, resources, and confidentiality compared to in-house employees.

For any outsourced processes, assume the role of informal auditor on an ongoing basis. Suppliers should be happy to help their contracted partners understand processes or practices. As a company grows and assumes more responsibilities from its suppliers, they should leverage what they’ve learned to realize cost savings, in-house expertise, and nimble decision-making. Supplier or internal audits are a good opportunity to begin this transition, as it allows an organization’s internal resources to learn these processes.

From the beginning, companies should determine a path that allows them to leverage their suppliers’ capabilities while looking toward the future as the organization succeeds.

Identifying and Evaluating Suppliers
When beginning a project, it can be tempting to rely on a single recommendation; often the criteria for suppliers is not readily apparent in this initial stage. Companies should ask for recommendations but also do their own homework when searching for suppliers. The following recommendations may be helpful in establishing a secure supplier relationship.

• Evaluate more than one organization. A comparative assessment of suppliers often highlights information that may have never otherwise been noticed. Don’t settle for a supplier after just one interaction.
• Consider an evaluation that rates each supplier on experience, capability, customer service, price, transparency, and perhaps even location. While cost is a consideration, consider the downstream cost reductions realized from working with an experienced and capable supplier. By selecting a supplier with no relevant experience, companies will be paying for their partners to learn and subsidizing (in time and money) for any mistakes made along the way.
• Engage a qualified consultant to assist with the quality and regulatory aspects of supplier selection. Ideally, hire an expert who can also create a supplier quality system or improve an existing system.
• Map out the supplier network including the primary contract manufacturer and all other suppliers—sterilization, material, component, etc. This process can help companies visualize the product realization process and determine how they will manage all suppliers in the process. Although medtech organizations may choose to let their contact manufacturers manage all suppliers, they are ultimately responsible for their own finished products, regardless of their supplier management arrangements.
• Learn about any business partners potential suppliers have that can be leveraged as needed.

The critical quality document in working with a contract manufacturer is a quality agreement. The quality agreement outlines the responsibilities of each party under the agreement. It is critical to establish this document as early as possible, preferably prior to product development. Consider aligning this document with the supplier mapping described previously. A quality agreement often has a responsibility matrix to define roles; consider using a draft quality agreement matrix to define and arrange the roles before finalizing the business agreement. Then, the quality agreement will be in a state for rapid approval by both organizations. Companies can always update the quality agreement but an early framework will ensure all activities are identified and assigned from the start.

Supplier relationships that are not vertical should be monitored closely because they present opportunities for error that may not otherwise be detected. Examples include:

• A regulatory consultant describing a production process in a regulatory submission must fully understand technical production information managed by a contract manufacturer.
• Contract quality personnel must understand product specifications and the various manufacturing supplier relationships.
• To efficiently develop or change product design or manufacturing processes, a contract manufacturer must understand any regulatory limitations (of course, multiple stakeholders must review and approve such changes after design freeze and approval).
• Product verification and validation testing (e.g. biocompatibility, sterilization, and process validation) may require representation from numerous functional areas. Establishing a lead party is essential.

Product Development
If design activities are also outsourced, it is critical to bring contact manufacturers into the development process as early as possible. Manufacturability is a key product development criterion that can significantly impact the development timeline if it is not considered early enough in the process. Bring design and manufacturing representatives together early and foster continued communication between these parties. Often, contract manufacturers who also offer design services have abundant experience and can expertly coordinate design and manufacturing.

Quality and regulatory resources must also be engaged early in the product development process. QMS processes provide compliance guidelines for design controls and development is influenced by regulatory strategy. As product development nears completion, quality and regulatory leverage what is learned about sustaining functions.

Verification and validation—a critical portion of medical device development—can be dependent on manufacturing methods and tools. During supplier evaluation, development, and manufacturing, ensure all functional areas gain an understanding of the activities performed and the equipment used. Any changes to manufacturing (contract manufacturer, material, process, or equipment) will require an assessment for new testing, regulatory approval, and/or new supplier qualification. A baseline understanding may be established during development with further understanding from quality personnel during supplier and internal audits.

By implementing robust supplier management and quality control practices, medtech organizations can be confident in evaluating, approving, and working with suppliers during product development planning, an uncertain time during the medical device lifecycle.

Conclusion
Companies should approach supplier controls with a concrete strategy and evaluate all supplier options early. They should consider supplier capability, transparency, experience, and communication when developing their supplier network—either in general or for a specific project. Organizations should not hesitate to enlist the help of an independent expert when doing so. While it may seem redundant, establishing this network correctly the first time will save considerable time and resources. 

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Bryan Brosseau’s experience has been forged in almost 20 years in the medical device and biologics industries. With a varied and in-depth knowledge of quality and regulatory requirements, he hones in on the necessary requirements of a project to ensure quality and compliance without impeding progress. Prior to operating Brosseau Consulting LLC on a dedicated basis, Brosseau managed quality management systems for numerous companies and has obtained regulatory approvals for products across a wide range of therapy areas. He received his bachelor’s degree in biology from the University of Georgia, maintains a Regulatory Affairs Certification (U.S.) from the Regulatory Affairs Professionals Society, and is a certified ISO 13485:2016 Lead Auditor.