SOP for Procedure for Evaluation and Approval of Vendors

1. Objective:
To ensure continuous consistent product quality, the quality of raw and packaging material from reliable vendors is essential. The purpose of this procedure is to describe the various activities and system for the approval of vendors for the active / inactive ingredients and packaging materials. The procedure also describes the evaluation procedure of vendors for other quality related items.

2. Scope:
This procedure is applicable for approval of all vendors (manufacturers) and suppliers of incoming Active Pharmaceuticals Ingredients (APIs), Inactive ingredients (Excipients) and packaging materials, which are required for manufacturing and packaging of finished products so as to control the purchasing of materials at (Company Name). This procedure is also applicable for the evaluation of vendors for other quality related items.

3. Associated Documents
3.1 SOP No. IONQC003 Handling of Test Specifications and Procedures
3.2 SOP No. IONQC022 Handling of Sourced Materials within QC Laboratory
3.3 SOP No. IONGE023 Vendor Audit
3.4 Form no. GE023-01 Vendor Questionnaire for Raw/Primary Packaging Material
3.5 Form no. GE023-02 Vendor Questionnaire for Secondary Packaging Material
3.6 Form no. GE023-03 Vendor Audit Report
3.7 Form No. QC022-01 Analytical Report of Specimen Secondary Packaging Material
3.8 Form No. QC022-02 Quality Control Report of Sourced Material

4. Accountability:
4.1 Head of Procurement shall be responsible for locating new vendor(s) of raw and packaging materials for existing product as well as new product.
4.2 All Heads of Department shall be responsible for purchasing other quality related items.
4.3 QA personnel shall be responsible for listing/delisting approved vendors.
4.4 P&IC personnel shall be responsible to ensure materials procured are from approved source.
4.5 Sr. Manager, Quality shall be responsible for evaluating vendors of raw and packaging materials.
4.6 Head of Procurement shall be accountable for the procedure.
4.7 Warehouse personnel shall be responsible to ensure that received materials are from approved manufacturers/vendors.

5. Abbreviations:
5.1 Raw Material
Active Pharmaceuticals Ingredients (APIs)
A substance or compound that is intended to be used in the manufacture of a pharmaceutical product as a pharmacologically active compound (ingredient).

Inactive ingredients (Excipients)
Any ingredient other than the active ingredient added to a pharmaceutical product to permit it to be formed into the proper shape and required consistency up to shelf life; the vehicle for the pharmaceutical product. Inactive ingredients are sourced either directly from manufacturer or through manufactures representative/ authorized dealers or from traders.

5.2 Packaging Material
Primary Packaging Material
Any packaging materials coming into direct contact with a drug product.

Secondary Packaging Material
Any packaging materials other than primary packaging materials. These could be either plain or printed.

5.3 Other Quality Related Items
Include items besides raw and packaging materials, which are directly or indirectly linked up with the quality of the product.
5.4 P&IC – Planning and Inventory Control

6. Precautions
6.1 All materials should be purchased only from approved vendors.
6.2 All materials should be received along with manufacturer Certificate of Analysis (COA). In case COA is not available, immediately inform to QA for his necessary advice.
6.3 No material is accepted from non approved vendor.

7. Procedure
7.1 Approval of New Vendors-Raw (active and inactive ingredients) and Packaging Material
7.1.1 The Head of Procurement shall locate new vendor(s) of material for existing product as well as new product. Based on material specification from Sr. Manager, Quality according to SOP No. IONQC003, Head of Procurement shall start locating sources from manufacturers or through manufactures representative/ authorized dealers or from traders. The secondary packaging materials shall be procured locally or from external vendors.
7.1.2 In case the raw material is supplied by the trader/agent, shall disclose the manufacturer identity and an undertaking shall be obtained from the supplier that the material shall be supplied from the same manufacturer.
7.1.3 To evaluate a manufacturer, following points are to be considered:
In case of raw and packaging materials (imported), preference is given to the manufacturer of international repute.
Manufacturer’s product specifications, brochures meet our specified requirements.
Local vendors (secondary packaging materials) are evaluated to be a potential supplier having manufacturing facility of their own.
Reference like, where they supply their products, are sought.
7.1.4 The Head of Procurement shall short-list vendors.
7.1.5 He shall collect as follows:
7.1.5.1 Raw Material (Local Market)
Raw material sample from a batch/lot with Certificate of Analysis (COA), Method of Analysis (in case of non compendia), Material Safety Data Sheet (MSDS), Stability Data (active ingredients) and Working Standard and Impurity Standard (if required) from the vendors. In case of non compendia material samples from three different batches/lots is preferred.
7.1.5.2 Active Ingredients (Regulated Market)
Raw material sample from a batch/lot with Certificate of Analysis (COA), DMF (Drug Master File), Material Safety Data Sheet (MSDS), Working Standard and Impurity Standard (if required) GMP Certificate of the Manufacturer, Letter of access from the manufacturer for (Company Name) and BSE/TSE statement from the vendors. In case of non compendia material samples from three different batches/lots is preferred.
7.1.5.3 Inactive Ingredients (Regulated Market)
Raw material sample from a batch/lot with Certificate of Analysis (COA), Method of Analysis (in case of non compendia), Material Safety Data Sheet (MSDS), Working Standard and Impurity Standard (if required) and the BSE/TSE statement from the vendors.
7.1.5.4 Primary Packaging Material (Local Market)
One lot/batch of primary packaging material with Certificate of Analysis (COA), Method of Analysis (in case of non compendia) and Material Safety Data Sheet (MSDS) from the vendors.
7.1.5.5 Primary Packaging Material (Regulated Market)
One lot/batch of primary packaging material with Certificate of Analysis (COA), DMF (Drug Master File) approved, drawing of the primary packaging materials, description of the type of material used, description of the sterilization of the primary packaging materials (if required), validation document of the sterilization of primary packaging materials (if required) from the vendors.
7.1.5.6 Secondary Packaging Material (Local Market)
One lot/batch of secondary packaging material with Certificate of Analysis (COA) – where applicable from the vendors.
7.1.5.7 Secondary Packaging Material (Regulated Market)
One lot/batch of secondary packaging material with Certificate of Analysis (COA) and technical documents (if required) from the vendors.
7.1.6 He shall then forward to Sr. Manager, Quality or designee the aforesaid for evaluation.
7.1.7 QA shall arrange in-house analysis of the sample of raw or packaging material at QC as per current approved specifications and obtain the analysis report as per SOP No. IONQC022. The sample of raw or primary packaging material required for test purpose is 250 gm (approx.).
7.1.8 In case of imported packaging material, the supplier shall be requested to supply an additional quantity of bulk sample with relevant documents for a test run (If required).

Quantity Requirement for Test Run :
Items Requested Quantity of Sample
Polyethylene Granules 200 kg
Rubber Disc 1000 pcs
Eye Drop Containers/Caps/Nozzle Tips 2000 pcs (each item)
Ampoules 2000 pcs
Labels A complete roll of 2000 pcs
Blister Foil A complete roll of 20 Kg
PVC Film A complete roll of 20 Kg

7.1.9 Procurement Department shall also provide Vendor Questionnaire (Form nos. GE023-01or GE023-02) to the vendor to evaluate the vendor Quality Management System (QMS). The response from the vendors shall be followed up by Procurement Department and on receipt shall be sent to QA.
7.1.10 If supplier questionnaire is not received even after repeated requests to the supplier, then the assessment of the materials can be done by the evaluating the finished product result where the material from that supplier was used.
Product analytical results of at least 5 batches to be evaluated to provide approval to the supplier. The material will be tested up to full pharmacopeia tests.
7.1.11 If the sample is in conformance with the specifications, QC In-charge shall send the vendor selection form with his or her comment (Form no. GE004-02) along with analytical report to Sr. Manager, Quality or designee. In case there is failure of the sample Sr. Manager, Quality or designee shall inform Procurement Department to collect further three lots/batches of samples for test purpose. In case of packaging material, the vendor selection form shall be sent to Production Department for their feedback on machine trial. If required the vendor selection form shall be send to R&D for further testing or comment.
7.1.12 QA shall review and compile the report of QC, Production (packaging material) and Research and Development (if required).
7.1.13 QA shall forward the compiled report along with vendor selection form to Head of Quality for final decision.
7.1.14 After receiving approval from Head of Quality, QA shall inform the compliance results with a provisional approval (Form no. GE004-02) of the vendor for the particular raw /primary packaging material to Procurement Department. In case of secondary packaging material, final approval shall be provided to Procurement Department (Form no. QC022-01). This information shall also be intimated to Production and Warehouse Department.
7.1.15 In case of rejection of material or failure of machine trial, QA shall inform to Procurement Department with all relevant details for them to communicate concerned vendor.
7.1.16 Procurement Department after studying the comments of Quality Assurance Department shall inform the vendor for the supply of the material (for production trials) in consultation with P&IC/Production Departments.
7.1.17 The trial order material shall be analyzed by QC and on full successful analytical test, the material shall be approved for use in production.
7.1.18 With the trial supply of the material, production department shall manufacture up to three batches depending on quantity available and requirement. Production and QA shall study the performance of the material and quality of the product manufactured using the material supplied by new vendor.
7.1.19 After complete assessment of the quality and questionnaire, the new vendor shall be included in the approved vendor list and the same shall be informed to the Procurement, Production and Warehouse Departments (Form no. QC022-02) by QA.
7.1.20 Preferably all overseas vendors for active ingredients and primary packaging material shall be audited as per SOP No. IONGE023. Secondary packaging material shall be audited as per SOP No. IONGE023.
7.1.20.1 In case it is not possible to audit the overseas vendors then following steps shall be carried out for approval of such vendors.
7.1.20.2 The Procurement Department shall provide pre-shipment sample of active ingredients and primary packaging material with COA to R&D for formulation trial batch.
7.1.20.3 Simultaneously, a vendor audit questionnaire (Form nos. GE023-03) shall be sent to vendor to gather information on facility and GMP system.
7.1.20.4 Audit questionnaire response shall be reviewed by QA.
7.1.20.5 QC test results and 3(three) trial batches results shall be reviewed.
7.1.20.6 After satisfactory review vendor can be approved and included in the approved vendor list.
7.1.21 If no consignment is received in two years, then a memo is sent by Procurement Department to the vendor for updating information.
In case of no response, the vendor will be de-listed. Procurement Department shall inform Quality Assurance Department for de-listing of the vendor. QA shall delist the vendor from the approved vendors list. In case of enlistment of this supplier, procedure for approval of new vendors shall be followed (section 7.1).
In case of response, the Procurement Department shall provide pre-shipment sample of active ingredients and primary packaging material with COA to QC for test. The vendor shall be enlisted after approval of the sample.

7.2 Vendor Evaluation
7.2.1 Procurement Department shall carefully study the delivery schedule, supplying condition, after sales service, timely compensation for damage compliance and the capability of the vendor to supply the required material within the period, with the right quality.
7.2.2 The vendor performance shall be evaluated once in a year for the active ingredients and primary packaging material and at least once in two years for key inactive ingredients (excipients) & secondary packaging materials on the basis of parameters like quality and service and vendor approval rate shall be given (Form no. GE004-03). Additionally, a review of the audit report issued (if any) and vendor questionnaire report and complaints/ non-conformity of supplied material shall be done.

7.3 Vendor Rating
7.3.1 QA and Procurement Department shall jointly do the vendor rating.
7.3.2 Rating of vendor shall be done on the basis of quality of supplies and service as described below.
7.4 De-listing of Approved Vendors-Raw (active and inactive ingredients) and Packaging Material
7.4.1 The vendor shall be disqualified and removed from the approved vendor’s list for following reasons during regular assessment.
7.4.1.1 If consecutive 3 consignment of material fail to comply the specifications or if the quality approval score is below 70%.
7.4.1.2 Three out of ten consignments fail to comply with the specification.
7.4.1.3 The service score is not met for 40% of supplies.
7.5 Corrective and Preventive Action
7.5.1 The vendor shall be made aware of the reasons for his exclusion and shall agree improvement action plans.
7.5.2 The vendor, who has been excluded from the approved vendor’s list, may be included again by taking following corrective action and preventive actions.
7.5.2.1 Head of Quality or auditor designee shall conduct facility audit of the vendor in order to ensure that quality system exists in the organization.
7.5.2.2 Discussion on other non – quality issues like service and rate etc. shall be carried out. After satisfactory outcome of all above points the vendor shall be approved as per the new vendor approval procedure (section 7.1).

7.6 Procedure for Approval of New Material from Existing Approved Vendor
7.6.1 The system shall be as per section 7.1 except there is no need to sent vendor and audit questionnaire for new material approval.
7.7 Procedure for Approval of New Vendor for Existing Material
7.7.1 The system shall be as per section 7.1.
7.8 Procedure for Preparation and Review of Approved Vendor List
7.8.1 Separate approved vendor list shall be prepared for raw materials and packaging materials (Form no. GE004-01).
7.8.2 The material shall be arranged alphabetically in the list.
7.8.3 The master list of approved vendors shall be approved by Sr. Manager, Quality or Designee.
7.8.4 In case of addition of new vendor, QA shall issue addendum list time to time to all the concerned departments.
7.8.5 QA shall review and update approved vendor list on yearly basis.
7.8.6 A list of all approved vendors shall be maintained by QA, QC, Production, Warehouse, Procurement and P&IC Departments etc.
7.9 Evaluation of Other Quality Related Item
7.9.1 In case of imported or locally procured item, the Head of Department shall locate new vendor(s) from different catalogues, brochures or other technical documents and collect quotation(s) from manufacturers or through local agents.
7.9.2 To evaluate a manufacturer, following points shall be considered:
Preference is given to the manufacturer of international repute.
Manufacturer’s product specifications, brochures meet our specified requirements.
References like, where they supply their products, are sought.
7.9.3 The Head of Department then checks the quotation(s) for approval or rejection and sends to Head of Procurement.
7.9.4 After procurement, the performance shall be assessed by the Head of Department. If it is satisfactory, then other quality related item shall be procured from the same vendor. If not, new vendor shall be sourced and evaluated.

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