Supply Chain Management: How to Use a Risk Prioritization Matrix to Evaluate Suppliers

Q: What’s the best way to apply risk management to purchasing and supply chain management?

A: One approach we recommend for supply chain management is to develop a risk prioritization matrix with a list of your products that includes key data such as: 1) Risk to the patient, 2) Quality data such as non-conformances, CAPAs, deviations, and customer complaints, 3) Volume of product manufactured, and 4) Supplier history.

Assign a numerical risk ranking such as a “3” for the highest patient risk. Also, assign a “3” to the highest-risk supplier and a “1” to the lowest. Key quality data should receive values equal to their number of occurrences. Likewise, the risk value for the volume of product should equal the number of lots or units produced. You’ll probably want to weight this value to prevent a low-risk product with a high production volume from becoming the highest priority.

[pullquote align=”right” cite=”” link=”” color=”” class=”” size=””]The product with the highest score gets top priority for a comprehensive evaluation of its suppliers.[/pullquote]

Multiply the values in your matrix to obtain a risk prioritization score. The product with the highest score gets top priority for a comprehensive evaluation of its suppliers and contract manufacturers, including vendor audits and specific supplier quality agreements.

Answered by Janis Olson, Vice President of Regulatory and Quality Services for EduQuest and lead instructor for the EduQuest training class on Managing and Auditing Supplier Quality.

Share

Leave a Reply

Your email address will not be published. Required fields are marked *