Devine Guidance

Complaint Files: Where is the Purchase Order?

By Dr. Christopher Joseph Devine
October 8, 2013


• Categories: Devine Guidance

Folks, one of the issues that Dr. D continues to see medical device establishments struggle with is implementing effective purchasing controls. In fact, if you visit FDA’s Enforcement Page, you will quickly being able to ascertain that the agency has concerns over industry’s compliance with 21 CFR, Part 820.50 (Purchasing Controls).

For this edition of DG, the doctor is going to focus on the purchasing piece, a.k.a., “purchasing data” and not the supplier management aspect of purchasing controls, even though the “evaluation of suppliers, contractors, and consultants” is a salient component of “purchasing controls.” Besides, instead of hurling disparaging remarks at the supplier quality engineers, Dr. D would like to enlighten the procurement folks for a change. As one of my favorite comedians is always saying (Carlos Mencia); “It’s just your turn, so just shut-up and take it!”

As frequent readers of the doctor’s tirades know, the doctor never attempts to be too showy or “ostentatious” (look-it-up) with his writing. The doctor likes to provide guidance with an edge. Enjoy!

Subpart E—Purchasing Controls

Sec. 820.50 Purchasing controls

Each manufacturer shall establish and maintain procedures to ensure that all purchased or otherwise received product and services conform to specified requirements.

Where’s the Purchase Order?

Let the doctor begin by stating, I am probably one of the worst violators when it comes to obtaining a purchase order prior to commencing work for my clients. Dr. D is usually happy with a signed statement of work (SOW). Since the SOWs are extremely prescriptive, this is probably not an issue. The doctor is only attempting to make life a bit easier for my clients.

However, a purchase order is always the preferred path. In fact, a purchase order that delineates sufficient information to ensure the correct goods and services are procured needs to be a fundamental requirement. Additionally, any and all supporting documentation such as drawings, specifications, standards, etc. should be referenced in the purchase order and sent to the approved supplier as an attachment to the purchase order. Furthermore, if a drawing, specification, or standard changes, a change order with the new/revised documentation should be sent to the approved supplier. Finally, best practice is to have a signed quality agreement with critical suppliers. Obviously, the legal folks always want to put their stamp of approval on such documents, but generic ones are easily obtained from the Internet that delineate the basic requirements and establish essential expectations for suppliers.

Can you say Form 483 Observation?

One of the issues Dr. D typically sees when performing client internal and supplier audits is a lack of control over the issuance of purchase orders. For example, in an R&D environment, an engineer or even a buyer will get on the phone and call in an order for a hundred machined components for a new catheter from ACME Machining (fictitious name). 

• ACME is not on the Approved Supplier’s List (ASL) – strike one.
• An unreleased drawing is faxed to ACME – strike two.
• No formal purchase order is issued, just a number – strike three. 

So guess what happens next?

• The parts are shipped to the medical device manufacturer and they sit on the receiving dock because there is no purchase order to receive the parts against.
• The buyer finally creates the purchase order and the parts finally find their way into incoming inspection. 
• The quality folks do the right thing and reject the parts for not having a released drawing and being procured from a supplier not listed on the ASL. 
• Weeks later, the engineer finally gets the parts. 

Unfortunately, this process continues to repeat itself and, lo and behold, FDA shows up for a cup of coffee and an inspection. While using the infamous CAPA -Plus one technique, the FDA investigator selects nonconforming material. While reviewing the nonconforming material reports the investigator quickly comes to the conclusion that purchasing is procuring material from unapproved suppliers and without the proper purchasing documentation. Can you say Form 483 observation? Now granted, you are probably laughing and saying to yourselves, Dr. D that never happens. If you believe that, the doctor just purchased the old Bay Bridge and is offering it up for sale. The moral of the story is simple. Ensure all purchases are made from suppliers list on the ASL, with released documentation, and a written purchase order.

Don’t forget about the no-change agreements

Now Dr. D knows that FDA does not like surprises and neither should you. The doctor has seen far too many recalls because a supplier has suffered a major brain freeze and forgot to notify the device manufacturer of a tiny little change, like we changed the raw material from polycarbonate to ABS, our bad! If a valid no-change agreement is in place and supported by a quality agreement or similar type of contract then the device manufacturer will probably have some legal recourse. Once again, make sure legal blesses the no-change agreement. If you do not have a legal group, you can have Dr. D bless it, with bourbon of course.

Incoming inspection, a necessary evil

As many of the readers already know, Dr. D is not a big proponent of incoming inspection. Device manufacturers pay good money for their services and materials. Considering the money being spent, the expectation should be that everything procured is always conforming to requirements, all of the time, every time. Unfortunately, that type of medical device utopia still does not exist, thanks in part to Mr. Murphy being alive and well in the medical device industry. That being said, the doctor believes that inspection should be employed intelligently and sparingly. Please feel free to put the onus on your suppliers through supplied data and similar statistical programs.

Takeaways

For this week’s guidance the doctor will leave the readers with five takeaways. One – always take the time and create a purchase order. Two – only place purchase orders with suppliers list on the ASL. Three – only use released drawings to purchase materials. If you feel the need for speed your organization can differentiate developmental drawings versus production through the use of numeric revisions for development and alpha revisions for production. Four – always have quality agreements and/or no-change agreements with your key suppliers. Five – unfortunately incoming inspection is a necessary evil, thanks to Mr. Murphy, so use it wisely.

In closing, thank you again for joining Dr. D and I hope you find value in the guidance provided. Until the next installment of DG – cheers from Dr. D. and best wishes for continued professional success. 

References:

1. Code of Federal Regulation. (2013, April). Title 21 Part 820: Quality system regulation. Washington, D.C.: U. S. Government Printing Office.
2. Devine, C. (2011). Devine guidance for complying with the FDA’s quality system regulation – 21 CFR, Part 820. Charleston, SC: Amazon.