Outsourcing supplier audits: The keys to success

Supplier audits are essential to quality risk management and supply chain control. As a highly regulated sector, the pharmaceutical industry must ensure that its suppliers respect requirements regarding quality, safety and compliance. These audits are therefore essential to guarantee the quality of the medicines manufactured, protect patient safety, reduce supply chain risks and, of course, to maintain regulatory compliance.

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A successful, lasting collaboration between an external audit partner and a client organization is based particularly on trust and reliability. The services provided by a qualified audit partner considerably improve a company’s success in managing its suppliers.

 

1.Why outsource audits?

 

Outsourcing an audit has multiple advantages. Firstly, the customer can focus on its intrinsic tasks knowing that its auditing needs can be subcontracted to a specialist professional organization. Some aspects of audits are time-consuming and require resources and energy. Audit planning, in particular, can be tedious, sometimes coming up against a lack of response from sites or their unavailability. To that is added the difficulty in aligning the schedules of the parties involved, or the need to reschedule an audit due to unforeseen circumstances. Audit planning, as any event planning that involves several players, may encounter some difficulties that a specialist audit service provider is used to understanding and will know how to manage efficiently.

Secondly, the proliferation of critical suppliers and of their varied activities requires a range of skills which can only be covered by several auditors. If we add to this the often distant site locations, it is sometimes difficult for a company to carry out all its supplier audits with its internal resources only. A specialist audit service provider has a pool of auditors with varied skills, located around the world.

Thirdly, in some cases, client organizations may encounter difficulties in accessing customer sites (in the case of “small” clients, for example) or in obtaining an audit date. A recognized external audit partner can play a crucial role in overcoming these difficulties by facilitating audit organization and by implementing appropriate audit solutions. For example, while suppliers face an increasing number of audit requests, their preference is increasingly for the shared audit. Some suppliers opt exclusively for this approach rather than for individual audits. For suppliers, this solution represents a genuine optimization of audit days and of the associated resources. The challenge for the audit service provider is then to provide a high-quality audit service that meets the needs of all customers, even if this is shared.

 

2.Supplier audit optimization

 

The advantages of outsourcing audits are based on the need to have flexible audit solutions.

There are many audit solutions that can be deployed as effectively as possible according to the context, supplier criticality, results of their assessment and requirements of the client organization. Among the audit solutions are individual and private audits, shared audits, purchase of an audit report, remote audits and audits carried out via a quality questionnaire.

 

2.1 Private/individual audits

 

Private/individual audits could be considered the “conventional” audit solution, in which an audit is carried out on behalf of a client organization, with an audit program centered entirely on its specific needs. This type of audit is ideal when the customer has its own specific needs, associated with a particular project for example, or associated with certain supplier problems or in the context of a for-cause audit. These individual audits may also allow customers who wish it, to join the audit to gain a better understanding of their supplier.

 

2.2. Shared audits

 

A shared audit is an audit that is carried out by an external audit partner on a supplier on behalf of several sponsor companies. By grouping the various customer requests within a single audit, the common objectives are examined just once, which increases audit efficiency. These audits can be applied to a wide range of frames of reference according to the supplier and the product supplied, ranging from Good Manufacturing Practices (GMP), Good Distribution Practices (GDP) to ISO standards (Figure 1). According to the frame of reference and the scope of the audit, the shared parts of the audit may vary. As a minimum, the quality system audit can always be shared, as, except in particular cases, suppliers have a single quality system. A reliable external audit partner takes care that the specific interests and observations of each customer are taken into account in the personalized and confidential audit reports.

The choice of a shared audit with a third party offers several advantages which go beyond simple cost reduction, although they do automatically reduce expenditure in comparison with individual audits. Shared audits can facilitate the general audit process, particularly in the context of routine supplier monitoring. This saves time and economizes on resources both for suppliers and for the customers taking part in the shared audit, which makes it a mutually beneficial solution. The success of shared audits is only possible with a dedicated platform which allows customers to study the list of available audits, to take part in them alongside other customers, in complete confidentiality. Only the supplier, the audit service provider, and the auditor will have all the information relating to the customers represented in the shared audit.

A shared audit carried out by an experienced external partner allows a complete assessment of the supplier while guaranteeing an audit report that is appropriate for the customer. In addition, shared audits promote environmental sustainability by minimizing travel and reducing CO2 emissions.

While the shared audit is a first-choice solution for routine assessments or the selection of potential suppliers, a combination of individual and shared audits may prove appropriate in accordance with specific needs.

 

2.3 Purchasing an audit report

 

The purchase of an audit report of a supplier can appear the best audit solution in some circumstances. Tight resources, planning, and deadlines play a role in this decision. This option is particularly advantageous for a customer when they need information on one of their suppliers that they have not been able to audit recently.  In this way it is possible to obtain information on the supplier’s current status with regard to compliance or on its performance, more quickly than carrying out a new audit.

This may also be the case when a customer is envisaging collaborating with a new supplier. In this case, obtaining an audit report provides an idea of its quality level and allows a possible partnership to be considered.

If the company needs a quick assessment, purchase of an existing audit report may represent a practical solution, possibly followed by a private audit adapted specifically to its needs, for example in the case of a particular concern.

 

2.4. Remote audits

 

Coordination of an in-person audit may pose problems, in particular when the stakeholders are spread over different time zones. Complications may also arise because of travel restrictions, such as those imposed during the COVID-19 pandemic. Moreover, some suppliers are also located in at-risk zones such as countries at war, for example.

In response to global events such as the COVID-19 pandemic, audit professionals had to adapt their approach rapidly. Confronted with sudden closures and travel restrictions, audit service providers had to innovate and find alternative solutions to support their customers’ audit programs.

One of these solutions is here to stay: the remote audit. Remote audits represent a viable option when it is not possible or safe for auditors to get to some places. Although remote audits provide valuable information on supplier performance, they nevertheless display certain limitations.

For example, a remote visit of the facilities using cameras or images does not offer the same level of detail as an in-person visit. However, remote audits remain an alternative that is preferable to no audit at all.

In some cases, remote audits are particularly suitable, for example for pharmacovigilance audits which do not require a physical inspection of the facilities. They can therefore be conducted effectively remotely, guaranteeing compliance with compliance and quality standards throughout the lifetime of the medicine.

 

2.5. Questionnaire audit

 

An audit by questionnaire can appear a favorable option, particularly for non-critical suppliers, whose activities are often straightforward and whose requirements are less strict. In opting for a questionnaire-based approach, organizations can simplify the audit process, save time and resources while guaranteeing compliance with essential standards. This method allows efficient data collection and assessment, providing a glimpse of supplier practices without the necessity of carrying out an on-site audit.

 

2.6 Internal audits

 

In addition to supplier audits, internal audits can also represent a challenge, particularly if the company’s quality team is limited and does not have sufficient resources to conduct audits internally. It is essential to question the quality system periodically to ensure continuous improvement. An audit partner can provide the necessary support allowing the successful completion of an internal audit program.

External audit companies provide an impartial view of the internal audit process. Their independence allows them to provide an objective assessment of the manufacturer’s performance in terms of internal quality. This objectivity can make it possible to discover blind spots or areas for improvement which could be overlooked by internal teams that are more closely involved in day-to-day operations.

 

Alignment of the audit frame of reference with the scope of the audit

 

Among other things, the success of an audit requires alignment of the audit frame of reference with the scope of the audit. This alignment is not always simple, and an external audit partner can provide support and added value through its expertise. In fact, pharmaceutical supply chains are sometimes complex, bringing together a diverse group of suppliers, service providers and subcontractors.

They particularly involve manufacturers under contract, raw material suppliers (active principles or excipients), packaging suppliers, analytics service providers under contract, transport/logistics subcontractors, computer services providers and much more.

As all cannot be audited using the same frame of reference, it is essential to align the frame of reference and the scope of the audit for improved audit efficiency, including the acceptance by the suppliers of any deviations and the consequent implementation of corrective action. Today, some sites do not hesitate to refuse to be audited in accordance with a quality frame of reference that is not their own and use of a signed quality contract between both parties as an audit frame of reference can prove to be the best choice in some cases.

The choice of audit frame of reference is essential to the running of an efficient audit and to obtaining satisfactory results. If corrective actions are not perceived as relevant to the supplier organization, it is unlikely that they will be implemented. The use of an inappropriate frame of reference may result in misleading conclusions. For example, if an audit draws a conclusion of unsatisfactory compliance on the basis of an irrelevant frame of reference, the assessment will not represent the supplier’s quality level accurately. This may potentially lead to a breakdown in the customer/supplier relationship, indeed pose economic and regulatory risks for the company’s activities. For a successful audit, it is imperative to define the field of application clearly and the audit frame of reference and, in this way, optimize audit results.

 

3.Choosing the right external audit partner

 

A true partnership between the external audit service provider and the customer is based on a relationship of trust and communication which allows an in-depth understanding of the specific needs of each company. It is obvious that the external audit partner must be efficient and that it must demonstrate that it has a robust quality system.

Several factors must be taken into account when choosing an external audit partner: does the service provider have the required international reach, in relation to the location of supplier sites?

Does the audit service provider have a clearly defined methodology, as part of a robust quality system? Does the service provider have the necessary skills with regard to audit planning and coordination? Not to forget, does the service provider have a pool of experienced and qualified auditors?

 

Is there a clearly defined audit methodology?

 

A well-defined audit methodology constitutes the basis of an efficient audit process, by providing a structured framework for audit preparation and performance and for post-audit activities. Before the audit, key information is communicated to the supplier and to the partner, particularly the aim of the audit, its scope, its frame of reference, the number of auditors and audit duration. During the preparation phase, discussions with the audit partner allow the identification of any specific questions and points requiring attention, if there are any. This will lead to the drawing up of an audit program, which is sent in the first instance to the customer for approval before being sent to the supplier. At the same time, a questionnaire is sent to the supplier to facilitate audit preparation by the auditor.

After the audit and while awaiting the formalized audit report, an initial, written, summary report is given to the customer. In the event that a critical deviation was identified during the audit, the customer is alerted very quickly. An audit report is then prepared by the auditor, reviewed by the audit partner, then sent to the customer for approval. The latter of course can ask questions or request clarification if necessary. In some cases, a telephone discussion with the auditor can prove useful. Once approved, the audit report is sent to the audited party and an action plan is requested in response to the deviations. These deviations are not a surprise for the supplier, as these have been notified, explained and accepted beforehand in an audit closing meeting.

The action plan is evaluated on receipt by the auditor who takes account of the appropriateness of the proposed actions and of the deadlines set for their implementation. If necessary additional responses may be requested by the auditor. Acceptance of the action plan leads to audit closure. Following the audit result and the action plan proposed by the supplier, the progress of the action plan will be monitored to ensure it is deployed correctly.

A clearly defined audit methodology is the cornerstone of an efficient audit process. It defines the framework of audit preparation and performance, and post-audit activities. The external audit partner must provide proof of a solid methodology that will rationalize the audit process and guarantee complete assessments. This audit methodology must be part of a robust quality system that guarantees that the services carried out are high-quality.

 

What are the skills of the audit service provider’s back-office team?

 

It is essential to check that the audit partner has a qualified internal team. Continuous training in addition to basic training guarantees that team members keep up to date with regulations and that they can engage in discussions and answer questions effectively. It is also essential to establish a key contact person, as this simplifies the channels of communication. This key contact person may be a sales representative or designated representatives of different teams, depending on the audit partner’s structure. For a successful collaboration, it is essential to know to whom each request should be sent.

In addition, the internal team must possess the qualifications necessary for the technical verification of all deliverables, including of course the audit reports. This particularly involves ensuring accuracy and correct alignment with the field of application and the audit frame of reference. The possibility of providing feedback on the audit reports and of engaging in discussions, either with the auditor, or with the internal technical team, builds trust and guarantees that any concern or clarification can be dealt with rapidly and efficiently.

 

Does the partner’s qualified auditor network have a global reach?

 

The global reach of pharmaceutical supply chains necessitates a network of auditors in different regions of the world. An audit partner that has a network of qualified auditors strategically distributed around the world guarantees accessibility and expertise appropriate for the different supplier sites.

It is essential to know the number and location of the partner’s auditors. For example, if a large proportion of suppliers are located in Asia, but the partner’s auditors are based solely in Europe, it is obvious that logistical problems will arise. Moreover, language barriers may prevent effective communication, as auditors may encounter difficulties in making use of documents written in the local language or in conducting discussions with suppliers in their native language. It is therefore imperative as far as possible to use local auditors.

Audit effectiveness relies on the fact that auditors possess the qualifications, independence and linguistic skills required to guarantee complete, accurate and impartial assessments. It is essential to see an auditor’s qualifications, generally supplied by their CV, to check both their technical and auditing skills. In addition, auditor independence is vital, which requires that they have no affiliation with the suppliers examined. An ethics code signed by the auditors reaffirms their commitment to impartiality and independence, guaranteeing that the audit results are based solely on the observations made.

An audit partner’s experience with different types of suppliers is advantageous, as it inspires confidence in its capacity to manage the complexities of different supply chain environments effectively. This vast experience increases the audit partner’s ability to align the scope of the audit with the most appropriate frame of reference, to adapt methodologies and approaches to take account of the specific environment of different suppliers, which in the end leads to audit results that are more reliable and more relevant.

 

Is there a well-established network of supplier sites?

 

An extensive network of supplier sites can only improve accessibility to audit dates and scheduling flexibility. Having an established contact with a vast network of supplier sites allows good channels of communication to be established between the audited party and the audit service provider, which increases alignment on customer requirements while helping to overcome the obstacles associated with audit planning. Moreover, effective communication with supplier sites is vital in the context of shared audits, where good coordination plays an essential role in the smooth running of the audit, both for the sites, the customers and the auditor.

 

Is the audit partner looking to the long term?

 

It is important to work with an audit partner that has a future-focused approach. A competent audit partner must actively help its customers to close their audit program. It will thus invite the customer to take part in shared audits linked to its program and ask the customer to anticipate its audit needs in accordance with the history that the partner has. A competent partner must help to overcome all potential obstacles that prevent a customer from completing its audit program successfully.

It is imperative that the audit partner has a solid team of qualified auditors, facilitating travel to supplier sites for audits. In addition, it must contribute to the customer’s quality assurance efforts and support its continuous improvement initiatives, to guarantee the continuous strengthening of quality standards year after year.

Regular discussions between the audit partner and its customer are essential, their frequency being dictated by the scale of the audits carried out and by the specific needs of the latter. Continuous communication is essential, facilitating smooth follow-up and discussions to address emerging issues or opportunities for improvement.

Environmental sustainability is a concern that is taking an increasingly large place in the minds of everyone, as well as in the industry and must be taken into consideration in the different processes.

The environmental impact of travel for audit purposes cannot be underestimated. This impact can be reduced by the use of local auditors located as close as possible to sites and by shared audit solutions. The latter offer an excellent opportunity to reduce the carbon emissions associated with travel, which allows sustainability objectives to be achieved without impacting audit results. When selecting an audit service provider, it is essential also to take account of its commitment to practices that respect the environment and its willingness to adopt innovative audit approaches which prioritize sustainability. By integrating environmental considerations into audit strategies, organizations can contribute to a more sustainable future while guaranteeing compliance and operational excellence.

 

4.Conclusion

 

Each client organization will have its own requirements and considerations to be taken into account in determining the most appropriate approach for its supplier audits. However, outsourcing supplier audits undeniably offers numerous advantages, particularly the possibility of focusing on its core activities, accessing specialist expertise and overcoming the difficulties associated with access to supplier sites and audit coordination.

By taking advantage of a diverse range of audit solutions, including remote audits, questionnaire audits, individual audits and shared audits, organizations can adapt their approach to respond efficiently to changes in regulatory requirements and operational needs. There is not one single audit solution, each project must be tackled with a multifaceted strategy, which optimally meets customer needs.

In conclusion, partnership with a recognized external audit service provider, that is future-focused, and offers the most appropriate audit solutions, is essential to allow customer organizations to improve supplier management, promote continuous improvement and reduce supply chain risks in an increasingly complex regulatory environment.

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