What You Need to Know About Supplier Audits

Performing Supplier Audits

If you’re in business with a supplier, you’re going to want to make sure you perform regular audits as their business practices directly impact yours. Supplier audits are essential to document the relationship between different companies and verify a supplier’s compliance with required processes and regulations. This ensures you know the status of your product from when its components are gathered to when it’s shipped and arrives at your business.

Why Bother

In many aspects, it’s in the best interest of your organization to keep tabs on your supplier. Supplier audits are an effective method of identifying, eliminating and preventing problems in a supplier’s processes, management, or products. You can also ensure you reduce costs from violations by preventing them. For example, HIPAA violations can accrue penalties of up to $50,000 per violation! The cost of ensuring you and your supplier are compliant is marginal to the fees you could quickly accrue. You could also lose certain certifications that your customers require to do business. Yikes.
Supplier audits also help improve relations between companies by increasing communication and relaying company values. Perhaps most importantly, you will have peace of mind knowing that your products will continue to meet or exceed the expectations of your own customers due to enforced standards, reducing issues down the road.

Gather Intel

Whether you’re preparing to audit a new supplier or want to audit an existing one, knowing more about your supplier can help reduce risk. Is your supplier outsourcing parts of their process? You’ll want to review any documentation regarding quality standards or past audits. Take notes of how responsive and cooperative they are to your audit- transparency speaks volumes and is fundamental to any business relationship.
Remember to think outside of the box! Search the supplier’s website and social media platforms for areas of concern. Review sites such as Consumer Reports and the Better Business Bureau could potentially offer some insight into previous issues that you can be sure to evaluate for yourself.

Prepping Your Audit

Your plan for your audit should stem from your reason for performing the audit. For example, if you’re performing the audit due to a recent production issue, you should focus more on that area as opposed to a more general first-time audit. Review your established expectations and prepare an audit checklist. A pre-prepped checklist and grading system will ensure a quick and painless audit for everyone involved. Be sure to cover all relevant areas of concern such as infrastructure, sanitation, control of materials and storage conditions.

The Audit

As you perform the assessment, don’t be afraid to take photos to supplement your report. Visuals can be powerful aids, especially in conveying issues in compliance. Don’t pass over shipping policies, invoices, or any documents that can prove beneficial, paying special attention to any obvious changes in documents prior to the audit. Be sure to take detailed notes to effectively address any issues when writing up the report.

How We Can Help

While using our software, audits and risk assessments become simple. With your suppliers identified, just determine who should provide the info and select your questions. You’ll then be able to create and complete assessments and assign tasks or remediation. You can easily review and compare previous audits in one centralized location or clone a previous audit if you suspect little to no changes. Reports are auto generated and can include attachments of any supplemental photos provided, saving you time and energy while providing a clear and concise view of risk across all suppliers!

About the Author:

Leave A Comment