Introduction to theSupply Chain Risk Management

Guide RPSGB, London 23rd February 2010

Jill Jenkins - Pharmaceutical Quality Group

Today…..

• You will:

– Hear about the development of the PQG Guide, its content, structure & benefits

– Learn from MHRA & key industry speakers who will share their experiences on Risk Management & Supply

– Gain a good understanding of why Supply Chain Risk Management is so important & take away key messages

• We hope that you will find the PQG Guide a useful resource that you will use & share widely

Wave of change….

The combination of:– Emerging low-cost suppliers– Global sourcing beyond traditional

boundaries– Variation in standards & control

has meant that Supply Chain Management is

an increasingly risky business!

Areas highlighted….• Supplier approval & ongoing compliance issues:

– Uncommunicated changes– Inconsistent QC or yield rates– Unknown impurities

• Continuity of Supply:– Single sourcing– Suppliers ceasing business

• Lack of full Supply Chain transparency:– Not knowing original source of materials– Shipper integrity & on time delivery

• Distribution & logistics concerns:– Security (counterfeiting/theft), cross-mixing, mislabelling, poor

storage, temperature issues, delays,

ISO 9001:2008 …..

• Reference (4.1) states:

– “where an organisation chooses to outsource any process that affects product conformity to requirements, the organisation shall ensure control over such processes

– The type and extent of control to be applied shall be defined within the Quality Management System

– Ensuring control over outsourced processes does not absolve the organisation of the responsibility of conformity to all customer, statutory & regulatory requirements.”

ICH Q10…..

• Defines the “accountable organisation” as being ultimately responsible for ensuring that processes are in place to assure control of outsourced activities and quality of purchased materials

• It requires:

– Assessment prior to outsourcing / selection

– Defined responsibilities & communication processes

– Monitoring & review of performance

– Confirmation of incoming materials against agreed supply chain

Regulatory expectations…..

• Expect manufacturers & authorisation holders to ‘‘do the right thing’’:

−Know where the Risks are

−Know how big the Risks are

−Be Proactive, Plan to Control and if possible, Reduce these Risks

−Communicate these Risks to stakeholders & groups who can act accordingly, and

−Stay in Control

The project team….

• Richard Smalley• David Cock• Justin Ahern• Sharon Shutler• Sharon Hooper• Jill Jenkins

What we set out to do……..

• Develop a freely available, downloadable Supply Chain Risk Management Guide (SCRM) based on the ICH Q9 quality risk management model

• Provide a resource of information to help organisations & their suppliers adopt a common approach to Risk Management across the Supply Chain.

Target audience…..

• Pharmaceutical & Medical Device

organisations

• Suppliers / contractors to the above

industries

Purpose of PQG Guide…..

• Encourage all organisations to apply the principles of Risk Management to minimise supply chain risks & assure quality & continuity of supply

• Emphasise to the pharmaceutical & medical device industries & their suppliers the need to:

– Apply Risk Management when making sourcing decisions or changes

– Involve the relevant people

– Communicate proactively

• Provide information that will help supply organisations understand the regulatory requirements & expectations of the pharma & medical device industries

Development…..

UPDATED

PLANNED

DEVELOPED

CONSULTEDREVIEWED FEEDBACK

October 2007

January 2010

Cycle reiterate

d 3 times

The Guide at a glance…..

Supply Chain focus…..• Consideration of

controls• Impact of complex

systems

• Supplier lifecycle approach

Understand your business!

Supplied materials / products

Manufacturing & Testing

PackagingWarehouse & Distribution

Internal Support Services (examples): Quality, EHS, Engineering, Facilities, IT

External Contracted ServicesE.g. manufacturing, testing, artwork & origination, packaging, warehousing & distribution, calibration etc

End user / customer

Product / service Design & Development

• Look internally as well as externally• Internal may involve different sites / locations

Supply Chain tiers

• Know your supply chain

• What activities are critical to the product?

• Identify potential hazards & associated risks

End customer / patient

Wholesale / retailer / pharmacy

Pharmaceutical and Medical Device Industry

Brokers / Distributors / Transport companies

Supplier A Supplier B

Supplier C Supplier D

Tier 1 suppliers

Tier 2 suppliers

Tier 3 suppliersBrokers /

Distributors / Transport companies

Transport / Distribution

Transport / Distribution

Tier 4 suppliers

• Communication• Understanding

requirements• Shared

agreement

17

See the “big picture”.…..

Focus too much on one source of information……

And you might just miss something important!

Using the PQG Guide…..

• Designed for use by organisations & their suppliers

• Quality Risk Management (QRM) is important to:

o Youo Your customers and o Your suppliers

• QRM is a business process that:

– Provides a common language for communication

– Assists in defining the scope and rationale for decisions within the supply chain

Getting started?

• Firstly, understand how Risk Management works

• Define the overall approach

• Focus on areas where it makes obvious sense & there will be a better chance of success

• Decide what specific goals you want to achieve

• Train /coach people in the relevant tools

• Don’t try to run before you can walk

Structured approach…..

Key messages:• Cover product

life-cycle • Should be:

– Pro-active– Re-iterative– Communicat

ed– Reviewed

ICH Q9

Supply Chain Risk Management

Sel

ecti

on

Mo

nit

ori

ng

Imp

rove

men

t

Risk Management

Eva

luat

ion

Foundations

• Supports continuous improvement:– Proactive not reactive– Ongoing cycle of risk

reduction• Enables more effective

prioritisation & efficient use of resources

• Reduces risk to business & lower overall cost

• Improve overall customer satisfaction (regulator / purchasing company)

SCRM

Final thought!

• Our customers include the:• Regulators• Healthcare professionals• Patient

• They expect our products to meet regulatory, Safety, Quality & Efficacy requirements!

• How secure is your supply chain?

Thank you for listening!• We hope that you will find the PQG Guide to SCRM

a useful resource that you will use & share widely