As a company’s supply chain grows, so too does its risk. With every new supplier comes the threat of poor performance. A supplier audit is an effective way to examine the quality of a particular supplier and the risk it presents to the organization before it becomes a problem. The widespread supply chain audit program can’t and mustn’t comprise of supplier quality engineers because their audit is a part-time job and this is not efficient in this case. The remote audits are ineffective because of language and cultural differences and travel time. It is highly recommended that local contact follows the foreign supplier auditors. Companies can improve their overall quality by ensuring their supplier’s product quality and delivery standards remain high, something a supplier audit seeks to establish.
Preparing the Right Audit
It seems sometimes that most of the auditor steps into the field without doing the required task or without completing their homework. You should always have a clear sketch in mind and also ask questions to yourself such as Why have you taken up this auditing? Whether the supplier is new to the company? Which process areas will you audit? What will the process audits cover? How will you take action when you find non-conformances? Proper planning and clear expectations will help minimize anxiety and frustration.
By keeping schedules and reconciliations up-to-date throughout the year, you can reduce the time it takes to prepare for the audit at the end of the year. Maintain an open line of communication between the organization and the independent auditors during the year rather than waiting until the audit starts to discuss new or unusual transactions. This will minimize surprises and allow the organization to make appropriate plans or necessary changes.
Know Your Technical Expertise and Limitations
Many auditors have spent their time in the laboratories in analyzing or in manufacturing the product. On the other hand, some of the auditors know the different equipment that is used. Always try to figure out your limitation and hire an expert consultant to guide you in the audit. A major problem that most of the supplier auditors face is the CDMO’s compliance with requirements for its GMP utilities. Sponsors are often drawn to contract development and manufacturing organizations’ (CDMOs) advertisements and websites by keywords and phrases such as speed, efficiency, state-of-the-art technology, partnering in the sponsor’s success, innovation, and solution provider.
A facility’s utilities are essential for GMP operations. Pharmaceutical-grade gases, electrical, solvent extraction and exhausting, heating, ventilation, and air conditioning (HVAC), purified and water for injection (WFI), clean steam generators, and cleaned compressed air (CCA) are critical for operating manufacturing equipment and ensuring high-quality filter air for cleanrooms, Consider GMP utility areas that are designed specifically with the sponsor in mind. The layout should adhere to the following guidelines.
If an item requested by the auditor is unclear, ask for clarification before the start of fieldwork to avoid potential delays and additional fees. Auditors are generally happy to answer accounting questions regarding unusual or infrequent transactions the organization may need assistance in accounting for. Also, ask questions of those within the organization to obtain information necessary to prepare the required footnote disclosures. Such discussions could include significant accounting estimates, pending or threatened litigation, related party transactions, commitments and contingencies, and other topics necessary to prepare required footnote disclosures.
What if you haven’t kept good records for the tax year in question? Go back to that year and try to recreate records as accurately as possible. If you’ve claimed expenses in certain areas, like medical expenses, your doctor or hospital may still have those medical records on file. Don’t hesitate to call them. Check with your mortgage company for interest expenses for that year; or with your county for personal property taxes paid. Put everything in a neat format, summarized but with supporting documentation, to take to the audit with you.
The managers and directors who have many years of experience write the quality systems of the CMO’s. The staff members execute these systems and ensure that the company’s product will be made, tested, stored, and distributed in a compliant manner. Sometimes you should speak with the manufacturing staff who work on the production floor and are likely to work on your product. You must also compare the information they provide.
On the whole, it boils down to the fact that there is a requirement to impress buyers to win more supply chain contracts. In some communities, buyers have minimum scores or levels of compliance that they want supplier auditors to have achieved when selecting contractors for their opportunities or projects. Regularly auditing your suppliers and establishing corrective action plans is invaluable for encouraging continuous improvement at your supplier’s facilities.