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Supplier Audit

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If you are into procurement and supply chain, then you might be worried about

  • How to ensure that your supplier’s production processes have the necessary controls in place to mitigate risk?
  • How to measure supplier performance through open industry, country and global bench-marking, while at the same time facilitating continuous improvement in managing product quality and safety?

Supplier audit and inspection is a critical process that supports quality and compliance management when dealing with vendors, suppliers and contract manufacturers. A well – designed vendor management assessment incorporating vendor audits can be efficient, cost-effective and enhances the quality of the organization’s operation.

Supply-chain governance can help organizations streamline their supply quality and performance. Additionally it helps organizations to identify, mitigate and manage suppliers’ risks for key procurement and manufacturing process.

Why to Audit?

Organizations do need to regularly audit their product and services being provided by the suppliers as the part of their Quality Assurance Program. They need to construct a checklist of the area & processes to be reviewed, evaluate the supplier based on quality management procedures, suppliers corrective action request (SCARs) responses, documentation, change control, support & maintenance as well review ethical, legal and regulatory aspects. Clearly, efficiency gains and elimination of redundant activities can bring down the cost and complexity substantially.

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The Industry Standard of Supplier Audit covers the following areas-

Supplier Selection Check List
Key Selection Area (Minimum) Non Critical Raw Materials Critical Raw Materials
Specifications X X
Price X X
Manufacturing Information X X
Packaging Information X X
Material Data Safety Sheets X X
Logistic Information X X
Certificates (GMO, BSE/TSE, …) X X
Analytical Test Method X X

Critical Raw Materials- The raw materials which are essential in industrial production and scarcity of them will straightaway hinders the productivity of the company in a negative way are termed as critical raw materials.

Non Critical Raw Materials- The materials which are not so crucial in the production process of a company (manufacturing) are called as non-critical raw materials and shortage of such material do not hinders the productivity.

Key Selection Area (Advanced)

  • Assurance of Supply
    • Capacity
    • Safety/healthy Risk
    • Financial Stability
    • Delivery Performance
  • Quality/Regulatory Performance
    • Regulatory Track Record
    • Recalls & Complaints
    • Change & Deviation Management
    • Materials Management
    • Quality Systems
    • Production Facilities
    • Product Quality Review
    • Security of the Supply Chain
    • Process Validation Approach
  • Product Procurement Cost
    • Cost Management
    • Presence in Emerging Markets
  • Innovation
  • Responsiveness & Communication

 

Benefits & Impact

  • The control of a company or business operations is achieved.
  • Non-conforming product control is identified through the supplier audit.
  • Customer satisfaction is established.
  • Information and product improvement details can be shared for common gain among suppliers and companies.
  • Risk mitigation is exercised both ways – proactive and reactive.
  • Ensured customers will have complete trust on the company that the products and services being provided to them will always meet their needs and expectations.
  • Supplier audit will also help in calibration control and contact review.

When there is an existing stand-alone supplier quality management function, strong relationship with suppliers can be created from a customer’s perspective.

Audit Management

During the time the audit is being processed, the performance data is secured, measured and recorded over a course of time. Generally, information is required from the supplier to effectively perform the audit process such as acquiring & reviewing supplier’s quality manuals, policies and procedures. It is important to be prepared for changes to audit schedules or adjustments to the scope of supplier performance review.

Discussion

But why to spend more?

You might be assuming now what could be the content under this title? Well, as you know supplier audit is not a low-cost and simple task. It is costly and time-taking job rather. It consumes time! So what companies can do is they can leverage the data already audited by other third parties and subsequently can save time and money for themselves. Likewise, we, at CormSquare, have a bunch of audited supplier data which easily could be utilized by the companies seeking for the same, i.e. supplier audit. So yes, why to spend more?

Let’s Conclude!

A company shall review the results of an audit report with supplier management. The cost and complexity of supplier audit runs high varies disproportionately with the size of organization. Companies are likely to outgrow the manual and elementary supplier audit process being excessively time consuming and hence having worse impact on the efficiency of organization.

Use the audit review process as an opportunity to boost the collaboration between the vendors, but be honest about any under-performances.

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