Consumers often assume the product they are buying is, for all intents and purposes, what is labeled or described on the packaging. They make the purchase without second thought on what is being purchased. It is usually a fair assumption, and due to the innocuous nature of most products, the buyer is not out anything more than The time and frustration of sending the product back to the purchasing location. Consumer goods generally come with a guarantee to ensure that the consumer can will be satisfied with the product, or the manufacturer with replace or refund the product at their own expense. That is all well and good for the consumer, but what about business to business transaction where the buyer is another business?
In these cases the buyer would be out more than just time and frustration as the product purchased could cause a loss of income if the product is an ingredient for the buyer’s product line. For example, a nutrient supplier mixing up product lines and cannabis cultivator applying a feeding cycle of micro nutrients while assuming low concentration and subsequently burning up the entire crop. In this case there would be lost revenue due to loss of plants and lost time spent to this stage of growth, All of which must be restarted – both time and money lost.
In the worst case, a consumer of cannabis products like vape cartridges or tinctures is harmed from unsterilized containers due to poor handling practices or sterilization techniques. This would cause patients or consumers to shy away from the manufacturer all together. In these cases, the brand is harmed and those losses are hard to quantify. However, irreparable damage can be assured. So how do businesses protect themselves when buying from another manufacturer? How do these companies ensure that what they are buying is what they are getting? After all, the livelihood of their products and overall brand of their company is at stake.
Supplier Quality Agreements and vendor audits make these assurances so that business to business transaction are protected by more than just a replacement or refund. A supplier quality agreement is a contract between a supplier and a buyer for specific products that are being purchased. This contract details all aspects of the purchase, such as packaging quantities and labeling of the product and its contents, to the specifications that each shipment or lot of product must meet for the product to be accepted by the buyer. The agreement spells out the testing requirements and reporting of data that the buyer receives each time a purchase is made for a quantity of product. This ensures that each order must meet the specifications set by the buyer, and not the assumed quality of the manufacturer.
What sets these agreements apart from the normal consumer “guarantee” is the fact that these contracts can hold the manufacturer liable for defective product that is purchased and lost revenue due to the poor quality of the product. Supplier quality agreements protect the company’s best interests and transfer a part of the risk from the buyer to the supplier. It is worth noting that having a means of verifying the testing results is a best practice. This is a sure fire way to eliminate all doubts about the contents of the product.
At the end of the day, supplier quality agreements will allow the cannabis industry to concentrate on what they do best. The company is protected from losses in revenue and time spend while the consumer focus of health and safety is maintained. Let the trusted quality professionals at Orion help you navigate the complexities of supplier quality agreements so that you can spend less time worrying about your supplier and more time on your final products. Contact us today at Orion GMP Solutions or by email at email@example.com to get started on your supplier agreements.