How to improve procurement as a small pharmaceutical manufacturer

Every small manufacturer faces the challenge of managing their procurement effectively while balancing cost, quality, and reliability. This guide provides actionable strategies that you can implement today to transform your procurement process and strengthen your business.

1. Build a Structured Supplier Selection & RFQ Process

Create a Supplier Evaluation Framework

Develop a scoring system that rates suppliers on critical factors like:

• Price (30%)

• Payment terms (20%)

• Delivery TAT (20%)

• Shipping terms (10%)

• Quality of product (15%)

• Reliability in case of bad product/delivery (5%)

Standardize the RFQ Process

• Use Consistent Templates: Standardized RFQ templates ensure suppliers provide the same information in a uniform format, making it easier to compare quotes.

• Clear Specifications: Always include clear product specifications, quantities, delivery schedules, and regulatory requirements in your RFQs.

• Compliance Requirements: Ensure all RFQs clearly outline the compliance or regulatory standards (like GMP or FDA guidelines) suppliers must meet.

2. Engage Multiple Suppliers

For purchases above a certain threshold (e.g., $1,000), always get quotes from at least three suppliers. This ensures competitive pricing and helps you understand market rates. Keep a record of these quotes in a standardized format for easy comparison.

Bonus tips:

• Sending RFQs to multiple suppliers encourages competition, helping you secure better pricing and terms.

• Engaging multiple suppliers reduces your dependence on a single source and ensures a more resilient supply chain.

Softwares like AuraVMS can simultaneously send RFQs to multiple suppliers and collect their responses in an simple format. We make it easy for you to compare the responses on multiple parameters

3. Compliance Audits

Even as a small manufacturer, conducting basic supplier audits is crucial. Create a simple checklist covering:

1. Production capacity

2. Quality control processes

3. Inventory management

4. Financial health indicators

5. Compliance certifications

Bonus tips:

• Include Regulatory Standards: Ensure that every RFQ includes the necessary regulatory standards such as pharmacopea, GMP, FDA, and other industry-specific requirements.

• Track Supplier Certifications: Verify that suppliers have the necessary certifications to meet regulatory standards, such as quality control or environmental compliance.

4. Leverage Supplier Performance Data

You can't improve what you don't measure. How often is a supplier responding to your RFQ? What is the gap between top 3 or 5 suppliers? Which supplier provides best prices? or best terms? These questions are very crucial for efficient procurement. They show you, where you are currently week in engaging or finding suppliers, and where you are strong.

Bonus tips,

• Track Past Performance: Evaluate past RFQ data to assess supplier performance, including delivery timelines, quality, and customer service.

• Build Relationships with Reliable Suppliers: Focus on building long-term partnerships with suppliers who consistently meet your expectations.

AuraVMS shows you supplier performance data from past RFQs in real-time, helping you make more informed, data-driven decisions.

5. Leverage Technology Without Breaking the Bank

Using technology gives you 10X, 100X, 1000X leverage over competitors. Because you can suddenly do 10 or 50 people's work with 1 person and what could take 5 days before can be wrapped up now in 5 hours!!

Use minimalist tools like AuraVMS to shorten your manufacturing cycle, capital cycle, save time, bring transparency and trust and reap many other benefits starting at just $4.99 per month.

6. Maintain Clear Communication with Suppliers

Clarify Terms and Expectations: Use the RFQ process to communicate your requirements and expectations clearly to suppliers, preventing misunderstandings.

Transparency: A transparent RFQ process fosters trust and better communication with suppliers, reducing the risk of errors.

Conclusion

Efficiently managing pharmaceutical procurement is key to maintaining a smooth operation and ensuring compliance with regulatory standards. By adopting best practices for RFQ management—like standardizing the process, engaging multiple suppliers, ensuring compliance, and automating tasks—your business can streamline procurement, reduce costs, and enhance supplier relationships.

Platforms like AuraVMS make it easier to manage RFQs by automating workflows, ensuring compliance, and offering insights into supplier performance, ultimately improving your procurement process.