One of the greatest challenges of supplier audits is actually introducing it into your workplace in the first place. Both you and your suppliers understand the importance of such audits to mitigate risk, ensure supply chain integrity and stay within the boundaries of the law.
To ensure your own supplier audit is adding-value to your operations and supply chain from first integration, take into consideration these five steps for better auditing practice:
The right people, the right tools
A strong platform internally is required before even contemplating going out to audit suppliers. This requires you to build a team that you can trust to audit, input data and analyse as effectively as possible.
For those firms operating on a global scale, sourcing local freelancers will save you money on travel costs for your core team, but caution is required to ensure you employ the right auditors for you.
Likewise, having the right tools available to your new team is critical to begin the auditing process. This doesn’t just include your internal supply chain software, but also the templates/questionnaires/audit forms that your team will have to complete for each supplier.
Schedule regular audits
How often you should hold audits depends entirely on the size of your supply chain. 12 months is seen as the most popular timeframe to complete audits – but sticking to your schedule and taking the time out every year to dedicate yourself to the process is hard to do.
It’s inevitable in most organisations that supplier numbers continue to grow year-on-year. This growth, coinciding with your existing and ageing database over time means you’ll be exposed to the most basic changes which could disrupt your daily activities. Supplier names, locations and lead contacts, are just three examples of this situation. To combat this, be firm with yourself and your team to ensure regular audits take place.
Identical supplier standards
To maximise the benefits of your audit and the standards of your organisation, it is essential to audit your suppliers based on the same aspects – no matter where they are in the world. For organisations with global suppliers, this is more important for you.
As well as having a standardized approach, based on UK industry standards that lead the way in global supply chain management, you should ensure that your people and tools can achieve the same higher standard to meet your expectations.
Can a local freelancer 2,000 miles away carry out the same supply chain check as the rest of the team could? This is just one question to think about when introducing your new supplier audits.
Once the auditing process has been completed, now is the time to bring that data together to ensure that consistent results are achieved and reporting can be made to share the results with the relevant stakeholders in your organisation.
Ensuring you have a closed-loop process means that audits in the future become easier over time to complete. Verification of existing suppliers, including changing their basic contact details, can be completed more efficiently internally.
Measure audit success and report
After audits, you should be measuring and reporting the success of the latest one you’ve completed. This allows for you and your team to implement improvements and fine tune your auditing process. Questions to ask yourself at this stage include:
- How many audits were completed on time?
- How long did the average audit report take to turn around?
- How long did it take for corrective action closure?
- How many overdue corrective actions on average did you have?
These measures can greatly enhance your resource planning and management in the future.
Photo credit: Bruce Guenter