Finding the Balance in Managing the Quality and Efficiency of the Supply Chain

An enterprise-wide quality management initiative is required to maintain supplier quality without sacrificing bottom-line objectives.
Nov 01, 2009
Volume 22, Issue 11

Mike Jovanis
Biotech and pharmaceutical manufacturing has for years witnessed and experienced the struggle between two opposing forces—supply chain efficiency and supply quality. This is often characterized by the disconnect between C-level executives, concerned with boosting the bottom line by an efficient product lifecycle, and quality managers, responsible for enforcing strict procedures and ensuring product quality. This doesn't imply that the C-level has been collectively negligent of product quality, or that quality managers are in no way concerned with the companies' overall financial performance. It simply means that the responsibilities and perspectives of these parties are often not in complete alignment, and between these parties, quality can easily take a backseat to production needs and profit.

Ensuring that products are manufactured with the highest quality components and ingredients means keeping tabs on which suppliers offer the most consistent level of high-quality raw materials, and prioritizing future procurement from these suppliers accordingly. This requires tracking and management of supplier qualifications, audits, nonconformance, corrective actions, and other processes. As companies continue to rely both on outsourcing and internal manufacturing operations as crucial elements of the global supply chain, they also realize that incorporating processes for managing the supplier quality into their overall quality management systems is required to reduce risk and decrease costs.


To better understand the critical need for managing supply quality as part of a broader quality management system, it is necessary to examine where things stand currently. There are several challenges that companies face when implementing an effective process for managing supply quality.

Inefficient, Decentralized Reporting

Biotech and pharmaceutical companies must conduct intensive audits of myriad suppliers and write detailed reports of their suppliers' operations. Yet, even some of the largest organizations have failed to implement a centralized system for tracking these relationships; instead they rely on rudimentary methods such as Excel spreadsheets or paper-based documentation to track these issues. Only by implementing a centralized system for comprehensive tracking of supplier data can organizations streamline their reporting efforts and realize the benefits of a more efficient and compliant process.

Lack of C-Level Involvement in Managing Supply Quality

Executives at biotech and pharmaceutical organizations, both large and small, generally are responsible for overseeing multiple facets of their company's global operations. Supply quality, therefore, often is left to departments that lack data about the direct correlation between supply quality management and the company's ability to grow revenues. Executives must play a more active role in ensuring that supplier relationships are effectively maintained and that the correct procedures are in place for gauging supply quality and evaluating processes.

Lack of Risk-Based Analysis for Supplier Quality

Companies must deploy comprehensive tools for analyzing and grading suppliers based on the level of risk they pose for the greater manufacturing operation. Without a risk-based solution, too much valuable time and too many resources are allocated to assessing the risk of reliable suppliers that pose no threat to the larger operation, although the more suspicious suppliers are less scrutinized than they should realistically be.

Increased Global Pressures

Companies face extreme challenges managing increasingly global supply chains. In 2008, supply quality related problems reached a boiling point with multiple deaths resulting from tainted heparin, which stemmed from China-based supply quality problems. Between holding companies and distributors, determining the true material suppliers and managing global supply chains has never been more challenging.

Biotech and pharmaceutical organizations must establish practices for handling supplier audits, ensuring organizational efficiency, and supply quality, while driving profitability.

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