Auditing a vendor is truly an essential part of QMS. This presentation describes the terminologies used in vendor Audit & the way of selection, routine audi7 & approval procedure as per authority or institutional rules. Thanks

1. Jony Mallik
Industrial Pharmacist
jonymallik@ymail.com
5/3/2021
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VENDOR AUDIT

2. VENDOR
A vendor, or a supplier, is a supply chain management term that
means anyone who provides goods or services of experience to
another entity.
ISO 9001:2015 A supplier is a person or an organization
that provides products or services. New ISO 9001 2015
standard no longer actually uses it. It prefers, instead, to use the term
external provider.
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3. AUDIT
An audit is a systematic evidence gathering process. Audits must be
independent and evidence must be evaluated objectively to determine
how well audit criteria are being met.
There are three types of audits: first-party, second-party, and third-
party. First-party audits are internal audits while second and third
party audits are external audits.
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4.  The primary areas that need to be evaluated in a vendor audit are
vendor viability, management responsibility and system accuracy.
 The main objectives for a vendor audit are to assess the quality
management of the whole organization, through its procedures and data
processes.
 It is an assessment of quality control measures taken by the vendor to
assure that their products and services are acceptable for business
transaction.
PRELIMINARY OBJECTIVES
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5. Need of Conducting a Vendor Audit
1.In order to reduce the cost.
2.Though it has drastically reduced the production cost for companies,
there is a heightened supplier risk and lack of visibility into supplier
processes.
3.To gain an insight into supplier processes and eliminate the risks, FDA
encourages companies to conduct GMP supplier audit at the
manufacturing premises of the supplier.
4.According to PIC/S GMP code, it is your sole responsibility to ensure that
the supplier’s manufacturing processes, analytical tests and examinations
are carried out reliably by the supplier and are in compliance with the
applicable standards and regulations.
5.After the audit, supplier must provide an appropriate corrective action
plan with measures that will be implemented by the supplier within a
defined timeframe to the manufacturer.
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6. AUDIT CHECKLIST
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The audit is performed by the representative of purchase department
i.e.,QA department.
Some of the important parameters taken into consideration while auditing:
Vendor Audit- Pharmaceuticals
 ISO Certifications
 USFDA
 Documented Quality Policy
 Training and Accountability
 Supply Access
 Packaging and Labelling Standards
 Premises and manufacturing facilities

7. STEPS-BY-STEP GUIDE TO VENDOR AUDIT
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• Supplier auditing is a necessary part of quality management system.
• Before signing a deal with a new supplier, a thorough supplier audit is
conducted to ensure that the supplier always delivers high quality and
standard products.
Following are the steps to successfully perform the supplier audit.
(1) Schedule a time for audit by contacting the supplier.
(2) Prepare the outline of the audit plan and review the vendor’s
performance history.

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(3 ). Conduct the audit as scheduled, at the same time keep the
supplier’s schedule in mind. Their activities shouldn’t be hindered. Take
a note of how the supplier’s team welcomes and greets you because this
reflects the ethics and principles of the vendor.
(4) . Take an inspection tour to the manufacturing premises, have a
close look at the equipments and safety issues.
(5) . Check the supplier’s invoices to know if they are charging you
accurately.
There should be no inconsistencies in unexplained miscellaneous
charges, shipping and transportation fees.
Keep taking notes throughout the process. It will help you when
writing evaluation report and addressing the issues.

9. The purpose of this step is to define a set of criteria that can be taken into
consideration in the selection process of a supplier. The supplier selection process
starts with the definition of the user requirements for the materials(s) within
scope.
The user requirement specifications provided to purchasing should contain as a
minimum the following information:
 Name of the product
 Material specifications
 Quantity required
The materials within scope of this guidance have been classified as follows:
 Non-critical raw materials,
 Critical raw materials
 Registered intermediates;
 APIs
SUPPLIER SELECTION
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10. Procedure for Qualification of Vendors for Raw Material and Packaging
Materials
A. Procedure for inclusion of vendor in approved vendor list
(raw materials):
New vendors must be qualified and approved by QA department before
regular supply of raw materials in following manner.
(1) Purchase department will locate the new vendor and find out the details
of products manufactured / supplied by them. in case of existing
materials, purchase department will provide our specification to the new
vendor.
(2) Purchase department will submit the samples to QA department or R&D
department for evaluation as per specifications.
(3) Samples from 3 consecutive batches of active ingredient should be
procured as pre-shipment sample along with certificate of analysis.
VENDOR QUALIFICATION
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11. (4). After complete analysis of the sample, the analytical report along
with the comments of QA department shall be sent to purchase
department. The vendor will be included in the temporary approved
vendor list if the samples are meeting the specifications.
(5). Purchase department after studying the comments of QA
department shall inform the supplier for the supply of the material
manufactured by them.
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(6). Based on the product compliance and assessment, further procurement
of active raw material should be continued.

12. (7). All the suppliers evaluated by R&D department on the basis of process /
product development parameters shall be considered as temporary vendors
and will be included in temporary approved vendor list.
(8). vendors recommended by R&D having drug master file number shall be
included as temporary vendors and based on the performance on commercial
supply for production batches, will be transferred to approved vendor list.
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13. B. Procedure for inclusion of vendor in approved vendor list
(Packaging material)
New vendors must be qualified and approved by QA department before
regular supply of packaging materials in following manner.
(1) Purchase department will locate the new vendor and find out the details
of products manufactured / supplied by them. In case of existing materials,
Purchase department will provide our specification to the new vendor.
(2) For printed and primary packaging materials, vendor audit is performed
by representative of Purchase department, QA department.
(3) Samples of printed packaging materials if necessary will be submitted to
QA department for evaluation.
(4) Purchase department after studying the comments of QA department
shall inform the supplier for the supply of the material manufactured by
them.
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14. (5) Purchase department shall carefully study the quality aspect and also
the quantity and financial aspects of the vendor, they are as follows;
• Capability of the vendor to supply the required material within the
specified period.
• Delivery schedule in order not to affect the production cycle.
(6) Based on the product compliance and assessment, further
procurement of packaging material should be continued.
(7) All the suppliers evaluated by R&D department on the basis of process
/ product development parameters shall be considered as temporary
vendors and will be included in temporary approved vendor list. Based
on the commercial production supply, they will be transferred to
approved vendor list and shall be considered as permanent approved
vendors.
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15. Procedure for exclusion of vendor from approved vendor list:
(1) The vendor shall be disqualified and removed from the approved
vendor’s list for the following reasons :
 If a lot does not comply to the specification with respect to critical
tests,then the vendor shall be disqualified.
 (The vendor shall be qualified again on further evaluation and
investigation.)
 3 out of 10 lots fail to comply the specification in a specified period
under review.
 The delivery schedule is not met for 40% supplies
(2) The rates mentioned in Purchase Order, differs than the rates
mentioned in delivery challan.
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16. Corrective Action and Preventive Action:
The vendor, who has been excluded from the approved vendor’s list,
may be included again by taking following corrective and preventive
actions:
(1) The vendor shall be made aware of the reasons for his exclusion
and shall be asked to explain.
(2) Head Purchase and Head QA&QC shall conduct a audit of the
vendor in order to ensure that quality system exists in the
organization.
(3) Carry out the discussion on other non-quality issues like delivery
schedule and rate, etc.
After satisfactory compliance of all above points, the vendor shall be
included in Temporary Vendor List.
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17. Supplier Evaluation and audits can be considered as an integral part of assessment in
any kind of industry or organization.
As the entire industry chore depends on the type of materials supplied for the
production as these raw materials will only shape up into the actual end product or
the final product.
So, it becomes very essential to ensure that the persons that supply the raw materials
in an industry are of good quality and standard and the materials they supply comply
with all the industry set standards and policies.
The evaluation is a term used in a business scenario which refers to the process of
evaluating and approving potential suppliers by accurate and measurable
assessments.
The purpose of this evaluation is to ensure that an industry has tied up with a first
class company that are both reliable and efficient and offer 100% genuine and quality
products.
Vendor Evaluation
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18. The quality system evaluation may be less or more elaborate in function of the
identified material classes and follows a documented process.
The following information from the supplier should be requested as part of the
Suppliers Questionnaire.
- Specifications
- Manufacturing/packaging/labelling details
- MSDS
- Logistic information (lead time to produce, delivery time, etc)
-Analytical test method
It is a pre-requisite to demonstrate that the material provided by the
potential supplier meets the specification as defined and compliance to
the specifications should be verified by analytical testing of a sample.
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19. Hence, checking and evaluating the quality of the providers can take
much of strength and time as they may reside at the far end.
So a proper solution for this can be through Supplier Audits.
Supplier Audits are one of the best ways to ensure that supplier is
following the processes and procedures that you first agreed upon
during the initial selection process.
The audit helps in identifying all the non conformances associated with
the manufacturing process, shipment process and quality process of
Evaluation.
Once the audit is completed, the provider and the manufacturer identify
all the needed actions that have to be implemented in order to bring
about a corrective change within a scheduled time.
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20. REFERENCE
1.Pharmaceutical guidelines web portal.( WWW.PHARMAGUIDELINES.COM )
2.PIC/S, ISO & WHO web portal.
3. Wikipedia.
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21. .
Thank you For Your Presence
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