Risk Assessment: How Do You Know if Your Supply Chain Is Compliant?

Published November 28, 2017

As a dietary supplement manufacturer, how valuable would it be to you if, with the press of a button, you could instantly see the compliance status of your suppliers and their materials? How much labor, money, and time do you currently spend collecting this information? If you had a quick, inexpensive way to continually monitor your suppliers’ compliance statuses, how would that change the way you do business?

For example, would you launch products containing materials from non-FSMA-compliant suppliers? Would you manufacture products with materials that would fail an audit? Would you make label claims without scientific proof? Would you continue to work with suppliers who don’t provide compliance documentation?

Your answer to the first set of questions should be, “Of course. I’d like to have a way to know whether my suppliers and their materials are compliant. It would make my business decisions better and easier.” Your answer to the second set of questions should be, “Of course not. I don’t want to use materials from non-compliant suppliers who don’t provide the necessary documentation.”

The fact is, most manufacturers don’t have a clue when it comes to their suppliers’ compliance statuses. Over the past 18 months, our company, Healthnotes®, has spoken with over 100 dietary supplement manufacturers and has heard story after story about the high risk they face with outdated documentation, incomplete product dossiers, unfinished supplier qualification forms, and on and on. It’s not unusual for us to hear that 60% of a manufacturer’s suppliers have provided little to no compliance documentation.

Why is this?

Our analysis has shown the industry is behind in adopting and deploying cost-effective software solutions that allow for robust information gathering, storing, and evaluation. Most manufacturers manage hundreds of suppliers and thousands of materials (meaning over 10,000 documents and a million data points) with spreadsheets or email folders. And, at most companies, the knowledge required to retrieve this information is in the hands of a few key people—if any of them leave, that knowledge leaves with them.

What has surprised us in our discussions is how poorly this high risk is understood by successful dietary supplement manufacturers of all sizes. Company executives would find it unacceptable if they realized how at risk their company might be if they, or their customers, were audited. Because most executives don’t fully grasp their company’s compliance status, they don’t prioritize implementing software that would solve these problems and improve their business.

Only when they are audited do manufacturers finally understand the issue. Only when their company is being sold and prospective buyers ask for proof of compliance do executives feel a sense of urgency. In each example, companies then have to spend money and time solving the problem and managing negative fallout.

I hope I have your attention; the problems described aren’t exaggerated. Fortunately, Healthnotes has developed Vitature™: the affordable, cloud-based software solution that helps dietary supplement manufacturers and suppliers centrally exchange data and documentation; track which information is missing; provide automatic expiration alerts; and allow for complete product dossiers for compliance, label accuracy, and risk management. Vitature is designed to help validate material compliance with regulations such as DSHEA and FSMA, and to substantiate label claims and manage the proof required. Up-to-date FDA regulatory information is included with current legal statuses and warnings. Centralized compliance insight into your materials, suppliers, and bulk formulas helps you make informed decisions about the products you develop and the suppliers and materials you use.

Please reach out to me to learn more about how Vitature from Healthnotes can help your business grow while reducing your risk. Move into the future: with Vitature, dietary supplement manufacturers now have the technology to effectively manage compliance.

Skye Lininger, CEO

skye@healthnotes.com