Topical Article

How to optimize your supplier management

Posted on by Congenius

As the medical device and diagnostics industry continues to grow, supplier management is becoming increasingly multifaceted. The ever-mounting effort required to deal with supply backlogs, high market demand, fluctuating commercial forecasts, as well as time and cost pressures, means that a legal manufacturer’s search for suppliers now spans the globe. Whilst global sourcing provides medical device manufacturers with choice and cost efficiencies, the more complex a supplier network, the more opportunity there is for error.

In this topical article, our Operations team identifies the key issues regarding supplier management, outlines the challenges faced and opportunities available, before finally sharing some recommendations for achieving consistent and coordinated supplier management.

The key issues with supplier management

The pressure to meet high market demand can often compromise quality. Losing focus of quality improvement can lead to less stable manufacturing processes, more scrap, delays in delivery, and extra effort to manage non-conformance.

Processes and documentation can also be a sticking point. Processes that are intertwined or lack structure, and documentation that lacks clarity and consistency can make the manufacturing journey more complex than necessary.

Lack of process standardization can cause waste. A lack of standardization within manufacturing and company processes can lead to a higher level of required effort as well as resource waste.

Weak communication can lead to inefficiency. Communication strategies that are confusing, convoluted, or even in some cases non-existent can lead to unnecessary conflict.

Stringent regulations concerning the customer-supplier relationship can add extra complexity. Increasingly stringent regulatory requirements, such as included in the MDR, stipulate that customers and suppliers should share a deeper partnership. This means that suppliers must now share more in-depth information with their legal manufacturer to meet regulatory needs. This can become problematic should any issues around intellectual property and confidentiality arise.

The challenges & opportunities

The COVID-19 pandemic has presented a challenge in terms of supplier management, causing operational hustle and bustle due to supply chain issues, and changing priorities and requirements. That said, high pressure situations often prompt innovation, and the pandemic to some degree has been a chance to embrace new ways of thinking.

Pandemic or not, in the medical device and diagnostics industry there is constant pressure regarding cost optimization which can compromise quality and sustainability. However, cost optimization can also lead to process optimization which can help to reduce wastage.

With global market demand for medical devices constantly growing, the requirement to produce high volumes can cause issues. Furthermore, operating in a highly competitive industry means that fluctuation in commercial forecasts presents an ongoing production challenge. On the positive side, attempting to deliver a high production rate is likely to reveal existing bottlenecks and production issues which may have otherwise remained undetected.

The culture of a supplier’s organisation can also affect efficiency. Those companies who lack the readiness and mindset for change can sometimes create obstacles along the production journey. Although, if a supplier is required to upscale to deliver a high production rate, the increased number of necessary employees may offer new ideas and different perspectives. Similarly, cultural differences and language barriers present an opportunity for companies to undergo intercultural strengthening and work ethic optimization.

Achieving effective supplier management

Step 1 | Communicate requirements

Clearly establish and communicate requirements and deliverables, taking into consideration technical, financial, quality, and legal aspects and their possible interrelationships (for example, within a vendor handbook, Quality Assurance Agreement (QAA) or in your customer – supplier contract).

Step 2 | Utilize standardization methods from other industries

Take inspiration from well-established methods from other industries, adapting and implementing them into your own method. For example:

Production Part Approval Process (PPAP)

  • PPAP is a well-established method in the automotive industry that has been successfully adopted by the medical device world
  • It can be used to standardize processes and standards between customers and their suppliers

Lean Six Sigma approach using DMAIC (Define-Measure-Analyze-Improve-Control)

  • Lean Six Sigma helps to clearly define a structure and procedure. It is applicable both in the office and in production and allows for clear communication throughout the escalation chain
  • It can be used to effectively standardize problem solving

Testing System Analysis

  • VDA 5 and ISO 22514-7 can be used to help standardize your testing methods and their verification and validation

Step 3 | Establish a training strategy

As the legal manufacturer, you should create and implement a clear supplier training strategy that encompasses the desired ways of working.

Step 4 | Align your risk management

Align your risk management across the entire production chain, with a focus on interfaces between manufacturer: supplier: sub-supplier.

Step 5 | Generate risk-based control and sampling plans

Be sure to produce control and sampling plans that are based on statistical evaluations/ assessments and aligned between supplier and manufacturer.

Step 6 | Utilize digitalisation

Utilizing digitalisation can help you to sustainably implement data acquisition, data evaluation, and process monitoring, which leads to reduced reaction times and higher transparency.

Step 7 | Use alternative project management methods

And finally, using project management methods which are not traditionally used in the medical device industry can help with efficiency – for example, SCRUM and Agile Project Management.

Should you have an Operations-related challenge, our team is ready and happy to help. Simply get in touch to start the conversation.

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