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With a growing emphasis on improving practices in distribution, internal processes, quality management systems, transportation, risk management, and mitigation protocols, it is important to evaluate the plans adopted by your vendors during your selection and audit procedures.

There have been many articles and white papers written on: ‘Risk Management’ ‘Risk Assessment’ and ‘Risk Mitigation,’ which by now you would think would be part of the common practices that any company employs when they evaluate themselves and their common suppliers and vendors. However, many companies overlook this step as they do not know how to approach it or implement a plan of their own.

So, as a rough guideline, let me outline below some basic steps that should be easy to embrace:

Four common approaches to handling risk – after you have completed your risk assessment:

  1. Risk Avoidance: Changes made to your processes and players that ensures risks are no longer an issue.
  2. Risk Mitigation: Reduce the severity of the loss, or prevent the likelihood of the risk from occurring.
  3. Risk Acceptance: Avoidance of a potential risk area is not possible or economically feasible, so it is acceptable and will not impact your business.
  4. Risk Deflection: After the risk has been identified and quantified, transfer that risk to the control of another player or partner in the process – maybe add it as a clause to be addressed in a vendor contract.

What are the typical areas for review when you rate your vendors or supplier.

Quality Management System (QMS): Review this and see if it meets an approved standard like ISO 9001-2008, or 21 CFR Part 820 as common examples, kept up- to-date, and understood throughout the organization.

Manufacturing, Storage Facilities, Depots and Hubs: Make sure these are in line with GDP and GMP recommendations for the industry they serve.

Vehicles, Trucks and Transportation Standard Operating Procedures (SOP’s): Make sure their SOP’s reference and dictate cleaning and sanitizing of Vehicles and Trucks, (FSMA rules) and meet the cold chain temperature control requirements for the products they are transporting – i.e. recommended use of data loggers, RF monitoring systems, etc.

So, in a final analysis, you are not just going through these steps for the overall sake of regulatory compliance, you are using these processes and product reviews as an audit of quality (i.e., produce and drug quality). In addition to reducing risks, you are ensuring that your end clients get the best quality products possible and your company will save money due to less returns and less spoilage.

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Peter Norton is a senior logistics and supply chain manager who is a consultant hired by clients in both the life science industry, and the food supply industry. Peter has extensive experience in both the domestic US and global markets specifically in the areas of cold chain management and security as this relates to the pharmaceutical industry to insure drugs that are supplied to the patient are at the required stability levels and peak efficacy.

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