1. November 6, 2013 Purchasing Controls & Supplier Quality Best Practices Beyond Compliance for the Medical Device Industry AdvaMed 2013 Bernie Liebler Technology and Regulatory Affairs

2. Background There is increased concern over supplier quality due to:  Increased number of recalls & enforcement actions  Purchasing controls (21CFR 820.50) is number 7 of top 10 cited FDA 483 observations for quality system violations  Increasing dependence on global outsourcing  Increased need for collaboration and sharing best practices to improve supplier quality within medical device industry Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

3. Value Proposition & Approach  This document highlights a set of successful practices in supplier quality and purchasing controls  These practices represent the collective consolidated peer-reviewed inputs of AdvaMed’s membership  Our approach is to publish these via a Library of “Successful Practices” for medical device OEMs and suppliers  The Implementation of these practices is expected to:  Improve Quality from suppliers (reduce escaping defects)  Reduce costly supplier-caused recalls  Reduce risk to patient safety from purchased components Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

4.  The regulatory framework for these good practices is:  21 CFR Part 820.50 (Purchasing Controls),  21 CFR Part 820.80 (Acceptance Activities),  21 CFR 820.30 (Design Controls)  Preamble to 21 CFR 820 (Purchasing Controls relevant sections), and  ISO 13485 (Sec 7.4)  The guidance framework for these good practices is: GHTF N17 (now under the auspices of IMDRF) Framework Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

5. Purchased Part Planning (GHTF 3.1) Rank risk associated with the Purchased Part  Part Classification/criticality is obtained from Design Outputs (820.30)  Identify design aspects of Critical parts that are Critical to Quality (CtQs) (820.30)  Identify CtQs for manufacturing parameters of critical processes  Receiving Inspection/Acceptance Requirements  Establish Mechanism for CTQ Cascade to Suppliers (for part and process CTQs)  Establish process to ensure that specifications provided a supplier are complete, accurate and correct. Identify Criticality of Service (820.50)  Identify aspects of the service that are Critical to Quality  E.g., Sterilization, calibration, etc. Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

6. Evaluate and Classify Supplier Risk (820.50)  Supplier Risk Classification of prospective suppliers based on  Purchased Part Classification, Supply Risk, Business Risk  Instructions on a form lead systematically to supplier classification/risk ranking (820.50) Establish a process for Supplier Relationship Management  Supplier Relationship Management  Focus on contract manufacturers & specified component suppliers  Establish formal and informal Supplier feedback mechanisms Supplier Planning (GHTF 3.1)

7. Documented Supplier Selection Requirements (GHTF 3.2)  Evaluate supplier capability to meet requirements  Conduct x-functional documented capability assessments  E.g., include financial, technical, operational capabilities Supplier Evaluation & Acceptance (GHTF 3.3)  Documented policies, e.g., Establishing an Approved Supplier List (ASL)  Supplier audits (including critical manufacturing process quality)  Provisions for evaluating 3 rd party suppliers, Distributors, Brokers Supplier Selection, Evaluation & Acceptance (GHTF 3.2 & GHTF 3.3) Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

8. Finalization of Supplier Controls (GHTF 3.4)  Supplier Minimum Quality Requirements  Supplier Quality Agreements (with critical/key suppliers)  Ensure procedures and Quality Agreements address sub-tiers  Prints and specifications control/define expectations  Established Supplier Change Management process  Purchased Part Approval & New Product Introduction process  Established risk-based process for Outsourcing  Established process for quality of Service/spare parts  Supplier Performance Monitoring (monthly)  Ensure supplier process validations for custom critical components  Established supplier standards for data security  Establish methodology for software supplier qualification  Established process for qualifying Brokers & counterfeit risk management  Establish process to ensure that specifications provided a supplier are complete, accurate and correct. Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

9. Supplier Performance Monitoring  Routine Performance Monitoring (e.g., monthly or based on volume/frequency)  Established Acceptance activities  Track and trend Incoming & In-process non-conformances  Use a statistical approach for sampling (not automatic "dock to stock")  Establish a consistent audit process  including Process Quality audits to reduce escaping defects  Criticality of supplier determines the type of auditing required (e.g., on-site audit)  Supplier Corrective Action Requirements (SCAR) Established  Approach as a CAPA sub-process  template provided to guide supplier through failure investigation process  Recorded training on failure investigation and SCAR’s available to suppliers Delivery, Measurement & Monitoring (GHTF 3.5) Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

10. Supplier Feedback & Communications (GHTF 3.6) Business (Quality) Review  Routine Supplier Quality Business Reviews (internal & external)  Ensure supplier relationship is maintained with transparency  Include SCAR & CAPA review, tracking & trending data from Acceptance Activities  Scorecards of supplier performance history is shared  Collaborate with suppliers on reducing Cost of Non-Quality  Supplier Development Programs including implementation of Lean methodology  Collaborate with suppliers on new product/process innovation  Collaborate with other OEM’s on supply chain oversight (e.g., MedAccred, Rx-360)  Establish Supplier communications via hosted supplier day, or via internet media Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management

11. Questions? Thank You Ravi Nabar, Ph.D., Sr. Director Supplier Quality Management