The current economy is based mainly on the mutual competition of enterprises from around the world. When choosing employees, companies try to find the best supplier that meets all requirements. To objectively compare potential partners, it is worth using an objective source. Such information may be provided primarily by an appropriate supplier audit.
Supplier audit – what is it?
An audit is a significant issue in the process of selecting and managing suppliers. It is important in companies in which the concept of supply chain management functions. The audit helps to identify and predict the potential risks that may arise during delivery.
An audit allows us to evaluate the efficiency and stability of suppliers when planning orders. It also enables the implementation of operational and strategic targets. Thanks to the supplier audit, we can divide suppliers into reliable and unreliable ones.
The audit supplier is recommended to all companies looking for business contacts.
More information about supplier audit
During the supplier audit, the controller checks the course of production processes and the plant’s productivity. Policy and procedures are also assessed.
An analysis is carried out based on data collected by the controller. On its basis, it is determined whether the plant can produce products with a certain quality level.
The process of the audit
During the supplier audit, mainly the necessary documents confirming credibility are verified. Bank accounts and export licenses that authorize the export of goods to the European Union are also checked.
The standard audit covers the profile of the factory, employees, equipment and technical facilities as well as document verification. The extensive audit, in addition to the above parameters, also verifies customers as well as the factory’s experience and the history of its operations. In the extensive audit, attention is also paid to aspects such as the management system (design control, raw material control, testing of the production process).
Already at the beginning, the client receives information whether it is worth to cooperate with a given partner or not.
The checklist is a key part of the procedure. It contains all the requirements for the supplier. The list may include requirements for, among others:
- specification of the product provided by the supplier (raw material testing, packaging specification, product testing, storage, and warehousing conditions);
- having the HACCP, BRC, IFS and ISO 22000 certificate;
- plan of pest control (check more about fumigation – https://www.shiphub.co/fumigation-in-shipping/);
- food defense procedure;
- hygiene plan (principles of cleaning and disinfection);
- buildings, storage rooms, and production;
Requirements on the checklist should be realistic. The list should not be too long.
Standards when carrying out a supplier audit
There are many different standards that the auditors base on during the supplier audit. Among others: location of the plant, industry, or implemented systems. These are primarily the regulations of the American Association of Textile Chemists and Colorists (AATCC), the Consumer Product Safety Commission (CPSC), the Federal Trade Commission (FTC), the International Organization for Standardization (ISO). The persons responsible for conducting audits are specialists belonging to industry associations. They know the guidelines of individual standards, they perfectly understand the functioning of production plants, and also have current knowledge in a given field.
Carrying out an audit will increase the effectiveness of cooperation with the supplier. Good knowledge of suppliers and their organizations positively affects building long-lasting partner relationships.
The audit can also be defined as proactive activities that aim to optimize processes and minimize risk.
The audit supplier allows supplementing the knowledge about the organization of the provider, among others in terms of:
- size and quality of human resources work;
- company strategy;
- machine park;
- quality assessment system;
- product/service specifications;
- logistic possibilities;
- supplier’s subcontractors database;
- organization of the supplier’s company;
- potential risk and ways to minimize it;
The acquired knowledge will undoubtedly serve our company. Besides, the audit also turns out to be a positive process for the supplier. It will allow you to verify the supplier’s processes and give you a chance to build an advantage over the competition on the market.
The supplier’s audit allows you to gain:
- document flow control;
- business data control;
- control of operations and business processes;
- a complete quality verification system for the products/services provided;
- identification and minimization of business risk;
- checking compliance of the supplier’s activities with the provisions contained in the contract
Purpose of the supplier audit
Performing a supplier audit is intended to help retailers and suppliers to cooperate and improve performance.
It is worth carrying out a supplier audit. This process brings benefits to both the contracting company and the supplier. As a result, we will minimize unnecessary risk, and we will have all the necessary documents to improve the delivery process.