Vendor ,types , selection of vendor, categories of vendor, certification of vendors

1. VENDOR
QUALIFICATION
Presented by:Anusha.S
1st sem M.pharmacy
QUALITYASSURANCE DEPT

2. CONTENT:
1. Definition
2. Types of Vendor Qualification.
3. Classification.
4. Category of Vendor.
5. Vendor selection steps.
6. Procedure for vendor approval.
7. Evaluation of vendor.
8. Vendor certification.

3. DEFINITION :
VENDOR :
• A vendor is a general term used to describe any supplier of goods or
services.
• A vendor sells products or services to another company or individual.
• which has been identified as a potential source of supply for a specific
material.
• The non-manufacturing vendor can only purchase material from the
approved manufacturer as directed by the Buyer.
QUALIFICATION : Qualify the appropriate vendor.

4. VENDOR QUALIFICATION:
• Vendor qualification is the process by which a vendor is assessed to determine, if
it can provide the required goods or services to the standards that the purchasing
company requires.
• This article explains about the detailed procedure for qualifying raw material
vendors, packaging vendors and service providers.
MANUFACTURER:
• is the company that synthesizes or produces the product.
• is responsible for all aspects of manufacture and quality control of the material.
• in the case of active manufacturers the manufacturer is responsible for the
provision and maintenance of a Master Files.

5. SUPPLY CHAIN :
• If a company makes a product from parts purchased from suppliers, and those
products are sold to customers, then it is a SUPPLY CHAIN.
• Some supply chains are simple, while others are rather complicated.
• The complexity of the supply chain will vary with the size of the business ,
and numbers of items that are manufactured.
• To ensure that the supply chain is operating as efficient as possible and generating
the highest level of customer satisfaction at the lowest cost, companies have
adopted SUPPLY CHAIN MANAGEMENT processes and associated technology.

6. Supply Chain Management has three levels of activities that
different parts of the company will focus on:
• STRATEGIC
• TACTICAL
• OPERATIONAL

7. Types of vendors/suppliers:
There are many different types of vendors that all have slightly different
roles in supplying goods and services. These are few common examples:
• Service and maintenance providers perform services.
• Manufacturers make goods from raw materials.
• Wholesalers sell goods to other businesses.
• Retailers sell goods to individual consumers.

8. CLASSIFICATION OF VENDORS:
1) Business to costumer:
• The B2C type of vendor sells directly to the consumer.
• They sell generally completed products to the end-user or even product
components.
• It can be a retail store, such as the pharmacy store or it can also be a retailer,
acting as a specialty vendor for the end consumer.
• A vendor can be an online retailer or even someone selling medicine on app.
Some vendors even specialize in providing consumer services.
• Vendors provide a wide-ranging volume of products to the end consumer.

9. 2) BUSSINESS TO BUSSINESS:
• A B2B vendor is one that sells primarily to other vendors.
• An example of a B2B vendor is RAW MATERIAL, which sell raw
material to manufacturing units, or manufacturers, such as cipla which sell
components to other units.
• The items are being sold to businesses and will, in turn, generally be stored
in inventory either for a short or long period of time (depending on the
product).
• Example: Paracetamol is API transferred by on vendor to other for
manufacturing of other drug product such as combiflame which is
combination of paracetamol + Ibuprofen.

10. VENDOR CATEGORIES:
CATEGORY 1:
• Generally regarded as EXPERT
• Short lived in development cycle.
• Contracted to perform limited scope of work.
• Minimal monitoring.
• Example: Supplier customises the formulation tank. Sponsor reviews and
approves the blueprint prior to manufacturing. Then IQ and OQ is planned
upon receipt to verify acceptability.

11. Category 2:
• Well known supplier of standard container, closures, raw material and
excipient.
• Certified to an ISO9000 Quality Management System.
• Enhance monitoring is suggested.
• Example: Well known supplier of standard container/closure supplies
multiple lots of vials per year to sponsor. The sponsor has no historical
concern with the supplier testing will be conducted upon receipt to
verify acceptability of material.

12. Category 3:
• Category 3 vendor may be category 2 vendor who are experiencing
quality issues with current incoming inventory or have shown a trend of
non-conformance over the last 12 month.
• Can be contract laboratory operation that provide routine analysis,
sometimes in large quantities.
• The risk of non-conformance of this vendor is greater than with
category 2 vendors.
• Advance monitoring and annual audit schedule are recommended.

13. Category 4:
• They are sole-source API manufactures.
• Intense monitoring is suggested in this category.
• 100% of lot will be visually inspected for release upon receipt of
sponsor.
• Examples: The contract manufacturer is supplying clinical trial
supplies. For the first time product is being manufactured at larger
scale, the sponsor is being elected on site for each event being
monitored and consultation.

14. SELECTION OF VENDOR:
• The vendor selection process can be a very complicated if you don't know
how to approach it from the very start.
• Here are six steps for the selection of the right vendor:
Analyze the business
requirements
Contract negotiation
mistakes
Vendor search
Request for proposal (RFP) &
request for quotation(RFQ)
Contract negotiation
strategies
Proposal evaluation
and vendor selection
Six
steps

15. Vendor selection:
Step 1: Define and Analyze Business Requirements
• What is the organization asking a third party to provide? A good start would be
to assemble an evaluation team that is knowledgeable in the vendor selection
process and has a clear understanding of what the business is all about. The
evaluation team should be able to:
• Define the product, material or service that is needed;
• Define the Technical and Business Requirements;
• Define the Vendor Requirements (i.e. the features the organization is looking
for in a vendor)
• Publish a Requirements Document.

16. Step 2: Identify Third Party Vendor Candidates
• After the evaluation team has published a requirements document it must now compile
a list of possible vendors.
• The team should send each one a Request for Information (RFI) and conduct a team
evaluation process. A short list of vendors is then created.
Step 3: Develop Evaluation Criteria (with weighting)
• In this third step, the team would construct an evaluation model that weighs a
requirement against its value and priority.
Step 4: Conduct Vendor Briefings
• Once the team has developed evaluation criteria with weighting and further narrowed
down possible vendor candidates, it’s time to set up an initial meeting with each
potential vendor to discuss stated requirements and ensure a common understand.

17. Step 5: Evaluate Vendors and Schedule Demos
• After completion of vendor briefings, the team should be better equipped to
evaluate potential vendors. Selected vendors should provide a solution
overview to the organization’s current business and technological requirements,
fees, benefits derived from using a particular vendor, etc.
• In addition, vendors are requested to provide a “demo” to showcase the
capabilities of their solution. Demos are a valuable way to get more information
and also evaluate intangible aspects of a vendor.
• It is critical to check the vendor’s references as a part of the evaluation process.

18. Step 6: Complete Vendor Selection
• Primary and Secondary Options
• At the conclusion of the evaluation process, the team will identify a primary option
(the winner) and a secondary alternative.
Step 7: Complete Contracting with Vendor
• This step includes identifying a clear set of objectives, deliverables, timeframes, and
budgets for the project with the vendor.
• These should be clearly written in the terms of the contract. One of the most important
factors in the vendor selection process is to develop a contract negotiation strategy.
• A successful contract negotiation simply means that both parties will search for
positives that will benefit the two parties in every aspect while they achieve a fair and
equitable deal.

19. Procedure for Qualification of Vendor for ‘Raw material and
Packaging material’ in Pharmaceutical Industry:
The new Vendor must be qualified and approved by QA department
before regular supply of raw material in following manner given below:
• Purchased department will locate the new vendor and find out detail of
manufacturing/ supplying of new product carried out by them.
• Purchase dept. will submit the sample to R&D or QA dept. for
evaluation.
• Sample from 3 consecutive batch of active ingredient should be
procured as preshipment sample along with crt. Of analysis.

20. • Quality Assurance / R&D department should analyse the sample.
• After complete analysis of the sample, the analytical report along with comment
from QA department shall be sent to purchase department.
• The vendor will be included in temporary approved vendor list if sample
meeting all the specification.
• The purchase department after studying the comment of QA department shall
inform the supplier for supply of material manufactured by them.
• An audit is performed by representative of purchase department and QA
department.
• Purchased department shall carefully study the quality aspect and financial
aspect of vendor.

21. • Based on the product compliance and assessment further procurement of
raw active material should be continued.
• All suppliers evaluated by R&D dept. on the basis of process development
parameter shall be considered as temporary vendor and will be included in
temporary vendor list.
• Based on commercial production supply they will be transferred to
approved vendor list and shall be considered as permanent.
• Vendor approved by the product license holder or contract giver will be
listed separately as approved for product license holder

22. Procedure for inclusion of vendor in approved vendor list :
New vendor must be approved and qualified by QA department before
regular supply of packaging material in following manner:
• Purchased dept. will locate the new vendor and find out detail of
manufacturing/ supplying of new product carried out by them.
• For printed and primary packaging material vendor audit is performed
by representative of purchase department and QA department.
• Sample of printed material packaging material if necessary will be
submitted to QA dept. for evaluation.

23. • The purchase department after studying the comment of QA department shall
inform the supplier for supply of material manufactured by them.
• Purchased department shall carefully study the quality aspect and financial
aspect of vendor.
• Based on the product compliance and assessment further procurement of raw
active material should be continued.
• All suppliers evaluated by R&D dept. on the basis of process development
parameter shall be considered as temporary vendor and will be included in
temporary vendor list.
• Based on commercial production supply they will be transferred to approved
vendor list and shall be considered as permanent.

24. Procedure for exclusion of vendor from approved vendor list:
Vendor shall be disqualified and removed from approved vendors list for
following reason:
1. If lot does not comply with specification with respect to critical test then
vendor shall be disqualified. The vendor shall be qualified again for further
evaluation and investigation.
2. If lot does not comply with specification with respect to minor test then
vendor shall be disqualified if observed for 3 consecutive lots .
3. out of 10 lots fails to comply with specification in specified period under
review.
4. The delivery schedule is not met for 40% supplies .

25. Corrective and preventive action:
The vendor who has been excluded from approved vendor list may be
included again by taking following CAPA:
• The vendor shall be made aware of reasons for his exclusion and shall be
asked to explain.
• Head purchase and head QA & QC shall conduct facility audit of vendor in
order to ensure that quality of system exist in organization.
• Carry out the discussion on other non-quality issues like delivery schedule
and rate etc.

26. EVALUATION OF VENDOR:
1. As a consumer, when you want to purchase an item, whether it is a
raw material you will most likely do some research on the prices of
your local stores or from vendors on the internet.
2. When you have narrowed your search you then look at other criteria
that may be important to you, like warranty or availability.
3. Lastly you will look at other less tangible criteria such as your
previous experiences with the vendor and how their customer service
was.
4. This behavior is exactly the same for companies when they want to
evaluate the vendors in their supply chain.

27. Vendor certification:
Objective:
• To ensure that the materials purchased are of consistent quality.
• To minimize the inspections of incoming goods( based on the
supplier’s certificates) to a certain level.
• Vendor certification leads to reduction of costs and release
times

28. RESPONSIBILITY:
• It is the responsibility of the quality assurance manager to develop the
vendor approval system and maintain SOP compliance.

29. VENDOR CERTIFICATION PROCEDURE
The vendor certification procedure may include:
a list of selected vendors
historical review of test results of previous suppliers
Formal inspection on site
decision making

30. 1. Selection of Vendors to be Certified
• The selection of vendors to be certified should be jointly made by the
heads of purchasing and production and the quality assurance manager.
2. Review of Historical Data and Test Results
• The quality data of batches delivered during the last 3 years is
summarised and a trend analysis is prepared.
• Deviations with regard to normal failure levels, out-of specification
situations, and corrective actions is reported.
• The quality control and quality assurance managers shall review the
trend.

31. 3. Site Audit:
The quality assurance manager or the system in charge may perform an
on-site audit. The audit should specifically:
• Determine the accuracy, precision, and reliability of test and inspection
data of the vendor.
• Review the process reproducibility and the batch records for process
variations.
• Perform general GMP compliance inspection.
• Review the potential for contamination and mix-ups thoroughly.

32. • Ensure that vendors’ in-process controls include the use of statistical
process control, critical product parameters that are significant and may
affect the final product quality
• Ensure the absence of significant online problems.
4. Recommendations
• It is not essential to perform on-site inspections. As an alternative,
evaluation questionnaires can be used.
• Vendors can also be certified based on an extensive review of historical
analytical inspection data and their performance over the last 3 years.
• Alternatively, third-party audits may be conducted for a predefined period.

33. 5. Decision on Certification:
• The data obtained as a result of these reviews and audits shall be
reviewed by the QA manager and sent for approval to quality control,
production, and purchasing.
• Final release must be authorized by quality control.
6. Steps after Certification:
• Reducing the number of tests and inspections of incoming goods as
agreed in the certification report, e.g., one out of ten batches.
• For packaging materials certification, it is sufficient to review the results
of three suppliers.
• If during this process of verification no discrepancies appear, the
verification may be discontinued.

34. • For incomplete certification, a provisional classification report shall be
published by the QA manager for components.
• Materials to be used in production without complete testing must be
supported with acceptable certificates of analysis by manufacturers.
• All deviations regarding purchased materials encountered by
production must be reported to the quality assurance manager for
referral to the manufacturer or supplier.

35. 7. Recertification:
• Recertification of an active and excipient manufacturer may be
performed on request.
• Recertification can be requested by quality control and production.
• The certification is valid for a period determined by the QA manager.
• Certification of packaging materials is valid for 5 years.

36. THANK YOU