Supplier audits
When working with suppliers, it’s crucial to periodically check that the services they provide comply with current regulations, your company’s standards and contractual clauses. A partner audit is a process designed to examine the quality of a partner’s services and/or products. This assessment also checks their ability to meet the needs of the client entity. Why is this essential? When and how should this audit be carried out?
Definition of a supplier audit
The aim of a supplier audit is to methodically check that this category of partner complies with your company’s regulations and standards. Standardized audit criteria and checklists are used to identify their strengths and weaknesses, and to illuminate avenues for improvement.
This approach enables a company to guarantee the quality of the services or goods supplied by its partners. It checks their ability to meet its quality, cost and delivery forecasts. This represents a kind of formalized analysis, usually resulting in a recommendation for corrective action.
Why is this fundamental? Partners play a key role in a company’s growth and success. A supplier who manages orders efficiently and offers quality products and services has a positive influence on the growth and progress of the customer organization. It also enables us to identify and manage the risks associated with supplier/customer collaboration.
The reasons for conducting a supplier audit: when is an assessment required?
There are several valid reasons for carrying out a supplier audit. For example, German supply chain legislation states that you are responsible for collaborating with external entities, and requires you to ensure the transparency of global supply chain processes, and that your partners comply with all human rights standards. In practical terms, this means conducting frequent risk assessments, devising preventive strategies and documenting breaches.
It’s also in your interest to have an accurate perception of the quality of your suppliers. Indeed, their effectiveness can significantly influence the quality of your production and the success of your company.
The following reasons may justify the implementation of a supplier audit:
- Supplier selection: a supplier audit can help you choose the best partner to meet your requirements.
- Supplier evaluation: a supplier audit enables you to assess, compare and strengthen your links with existing partners.
- Quality assurance: if you want to improve the quality of your products and optimize your production procedures, a partner assessment can reveal opportunities for improvement.
- Certification: a supplier audit is useful in preparing for certifications such as ISO 9001.
When should a supplier audit be carried out?
It is advisable to carry out a supplier audit in cases where the collaboration with the partner presents an uncertain level of control and several associated risks, or in cases where the client company notices recurring anomalies.
This assessment may also be necessary to examine a new partner, whose performance and risk management are not yet proven. If the supplier is a key player in the reliability of the supply chain, an audit is crucial.
In addition, an audit can be carried out at any time during the collaboration with the supplier, to confirm that the latter is operating correctly, in accordance with the contractual clauses. As a general rule, it is advisable to carry out periodic partner assessments: annually, or more frequently in the event of obvious malfunctioning. At the same time, third-party databases need to be cleaned regularly.
Factors to consider for a supplier audit
There is no universal method for carrying out this type of audit. It’s up to each company to design its own partner evaluation model. Nevertheless, there are some specific factors to consider, which correspond to the standards that the partner being evaluated must meet. In this regard, the following are particularly worth mentioning:
- Providing quality goods and services;
- Managing third-party risks ;
- Ensuring third-party compliance;
- Monitor performance;
- Implement corrective measures as needed.
ISO 9001 standard and supplier audit
The ISO 9001 standard dating from 2015 is an international standard framing a company’s quality management system (QMS). It defines a specific level of requirements in terms of external supplier control, partner risk management and the quality of the goods or services offered. This encourages continuous improvement. This level of demand requires the implementation of procedures, as well as a sense of responsibility towards customers.
By declaring ISO 9001 certification, a partner indicates that it has set up a quality management system that meets specified criteria.
The following requirements apply to a supplier boasting ISO 9001 certification:
- Putting best practices into practice ;
- Precise delimitation of each person’s role in the delivery process;
- Process improvement ;
- Troubleshooting ;
- More regular quality controls.
Benefits of a supplier audit
You and your company can benefit from regular supplier audits. These assessments offer the following advantages
- Clearly identify your partners’ strengths and weaknesses;
- Performance evaluation based on predefined criteria;
- Determining where and how to improve the quality provided by a partner;
- Improved risk management and risk reduction;
- Compliance with the standards set by your company.
- Compare partners to always choose the best option.
- Documentation and monitoring of partner development.
- Strengthening relations with partners through close collaboration during the assessment process.
- Positive impact on the final product and increased customer satisfaction by improving partner quality.