This document provides information about vendor qualification procedures in the pharmaceutical industry. It begins with definitions of key terms like vendor and qualification. It then describes the types of vendors, including business-to-business and business-to-customer. It outlines a classification system for vendors from Category 1 to 4 based on risk. The document details the seven steps for vendor selection and qualification procedures for raw material and packaging material vendors. It provides guidance on inclusion of vendors in the approved vendor list and reasons for exclusion from the list, along with corrective actions.

1. VENDOR
QUALIFICATION
PREPARED BY: khushboo kunkulol.
Department: QAT (M-Pharmacy)
SUB: Quality Management system.
Guided by : Prof. Dr.Ganesh andhale sir.
Alard college of pharmacy, marunje. Pune.

2. REFERENCE:
 https://en.wikipedia.org/wiki/Vendor
 https://www.investopedia.com/terms/b/btob.asp
 https://www.pharmaguideline.com/2011/05/procedure-for-
qualification-of-vendors.html
 https://www.pharmaguideline.com/2011/05/procedure-for-
qualification-of-vendors.html
 https://www.litcom.ca/7-steps-for-successful-vendor-selection/

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

4. DEFINITATION :
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.
QUALIFICATION :
 Qualify the appropriate vendor.
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.

5. Types of vendors/suppliers:
There are many different types of vendors that all have slightly different
roles in supplying goods and services. These are just a 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.
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.

16. 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 pre-
shipment sample along with crt. Of analysis.
 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.

17.  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.
 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 .

18. 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.
 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.

19.  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.

20. 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. 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 .

21. 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.

22. THANK YOU