Supplier Audit is critical to ensure the supply chain integrity in today’s industry, with globalisation, increased product complexity, outsourcing, and added regulatory requirements when expanding into emerging markets.
Implementing Supplier Audit Program
There are many benefits from implementing a comprehensive supplier audit program to qualify suppliers, but with today’s global supply chain it can be a challenge if managing hundreds or even thousands of suppliers.
Many companies don’t know where or how to begin, when setting up the supplier audit program. Ideally it should reduce the biggest risks associated with key suppliers, and not waste resources and money auditing low risk suppliers.
Below are some of the key elements to consider when implementing an effective supplier audit program.
- Centralise Supplier Performance: Supplier performance and data should be monitored and analysed in one central location. Having supplier performance data in different locations and formats makes the system less effective. Also splitting it between departments from a resource perspective, add additional complexity and inefficiency
- Efficient Communication: The supplier audit program should communicate efficiently to both suppliers and internal stakeholders. Any problems and actions with target dates, should be clearly visible to the business.
- Prioritise Risks: The audit schedule should not be picked randomly, but prioritise the highest risks. By planning your audits based on a risk assessment, you will get most value for your money.
- Drive Improvement: The supplier audit program should drive improvement in quality received from supplier.
Doing a Supplier Audit
Supplier audits should be done by competent people with the appropriate training and knowledge and understanding of quality management. Having a guided tour of the suppliers factory floor while asking random questions about the processes, is not an audit.
The first part of the audit is planning, below are some of the elements that should be covered there.
- What is the scope of the audit
- Which departments and processes will be audited
- What is the timeline and agenda
- What documentation is needed up front for review as preparation prior to the audit.
All this should be communicated to the supplier in a timely manner.
For the actual audit, following areas are typically some of those that should be covered.
- Tractability, the suppliers ability to track lots and material used to produce them
- Quality Tools, how the supplier monitors quality, for example by using Statistical Process Control (SPC).
- Quality Improvements, how does the supplier continuously improve their processes.
- Sampling, how does the supplier sample products for inspection.
- Calibration, is gages calibrated.
There are many elements that need to be covered in an audit, and at the end a feedback meeting should take place to communicate and agree on the non-conformances and opportunities for improvements raised.
Final step is generating the report, and follow up on actions to get them closed within the agreed timeline.
Alternatively you can continue to our supplier audit service.Go to Supplier Audit