In today’s globalized market, organizations work with suppliers from around the world. However, ensuring that the supplier meets all the parameters, your company has set can become difficult. This is where supplier audits come into play. Supplier audits help businesses overcome these challenges. For manufacturers from any industry, supplier auditing is an integral component of quality as it gives insight into whether a supplier’s products, services, and processes adhere to a defined quality standard.
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Supplier Audit
What is a Supplier Audit?
A supplier audit is performed by businesses to ensure that the external supplier meets the organization’s quality standards. In supplier audit, the auditor inspects if the supplier is adhering to the industry regulation practices, such as health and safety measures and correct manufacturing processes. There are various types of supplier audit to ensure quality assurance is consistent. The most common types of supplier audits are system audits, compliance audits, process audits, and product audits.
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What is the need for a Supplier Audit?
Having better visibility into a supplier’s processes and quality management system (QMS) allows manufacturers to help avoid the risk of products that do not meet the quality standards of the business. Supplier audits are part of the quality team’s due diligence or annual review. Supplier auditing will enable businesses to evaluate a supplier’s products and processes based on the defined quality standards at the time of onboarding. Supplier audits are also usually requested when
- the supplier is new, and there isn’t enough performance information
- the supplier is critical to supply chain reliability and the organization
Who is Responsible for Supplier Audit?
Typically, a supplier audit process is initiated by an internal team of the buyer organization. The person leading the supplier audit is usually from the procurement or quality department. Once the audit date is set, the internal audit team will create a list of items or information that should be collected from suppliers. Depending on this list, the team will decide if the auditing process should be done in-house or externally.
Types of Supplier Audit
- Announced Supplier Audits are conducted with prior notice for inspection. This type of audit gives the supplier enough time to prepare. While this type of audit is effective, the supplier will have a chance to improve their processes at the last minute.
- In unannounced supplier audits, the audit visits the site of inspection unannounced. It is one of the trending inspection methods in recent times, and the auditor can look at the operations and practices without any signs of tampering.
- Desktop supplier audits are not conducted in person, as the primary purpose of this audit is to verify if the supplier’s documentation and certificates are up to date. These are done online without the need for personal site visits.
Benefits of Supplier Audit
Some of the benefits of implementing a supplier audit are:
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Supplier audit focuses on reviewing all the processes in supplier onboarding and performance. This thorough analysis reveals gaps, if any, and helps reveal any potential risks.
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To maintain customer satisfaction, it is essential to keep the quality standards of the product. A supplier audit helps ensure the suppliers follow the quality standards and maintain quality control.
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Helps improve and maintain communication with suppliers as regular audits ensure quality objectives are consistently met and enhanced to meet the organization’s ever-changing needs.
What are the points should be considered in a Supplier Audit?
A supplier quality audit, when conducted successfully, will help a business identify, remedy, and prevent problems in a supplier’s product quality or processes. The audit also helps from the quality issue creating major problems while ensuring quality consistency. Before performing a supplier audit, consider the following points.
Conduct pre-audit research before reaching the audit site
In this step, it is important to understand the parties’ expectations. Similarly, the audit committee must prepare a prioritized checklist of items to review along with a list of products or services supplied. Other pre-audit research items include a review of:
- past audit reports
- supplier history with the company
- existing product specifications
- product performance
- interviews with in-house personnel about the supplier and the product
Do thorough research on the supplier's reputation online
Leverage the power of the internet to investigate the supplier. Research the supplier’s website and digital channels, read reviews from Consumer Reports and the Better Business Bureau and search the FDA website for information relevant to suppliers’ compliance with CGMP regulations to check for warning letters.
Investigate customer complaints
Customer complaints are a source of information about the performance and quality of products. To that end, looking into each complaint with a fine toothcomb is important. If there is repetitiveness in the type of complaint, understand the root cause for the same. This helps understand if the supplier is at fault, and this information can become part of the supplier audit process for further investigation.
Know your supplier's activity
If a part of the products your business procures comes from your supplier’s supplier, it is mandatory to be notified of the fact. Their relationship also impacts the quality of your products; hence, all parties involved with the company must adhere to the supplier quality agreements. Request your immediate supplier to furnish an audit report or any other documentation that validates their claim to meet your quality standards. This process is paramount to the overall quality output of your business.
Ensure that the supplier quality audits are always on track
While reviewing processes and documents during an audit, actively listen to the supplier. The supplier’s role is to follow the protocol and ensure that the auditor is granted access to all quality-related documents and processes. If the supplier or his team tries to offer incomplete or lukewarm responses, it could be a way to avoid the situation. These should become a part of the audit report as it could mean problems such as deviations, non-conformances, or failed lots.
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We have rolled-out CQ across our company to automate various elements of QMS requirements such as Document Management, Complaints, Non-conformances, Corrective Action (8D and A3), Supplier Management and Audit Management. We have been using the software for more than 2 years. We are glad to see how well the system is being used across the company. We have several thousand users on the system currently and working to scale the usage further. CQ solution has been configured to meet our needs, works elegantly across languages, across time zones, and business verticals. With integration between CQ and SAP to exchange critical data, the process automation provides a lot of productivity.
Quality-centric Companies Rely on CQ QMS
Evaluate supplier’s products and processes to meet quality standards with ComplianceQuest’s Supplier Audit
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Frequently Asked Questions
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A neutral third-party inspection company conducts external supplier audits by assessing the supplier’s compliance based on specific quality standards and business requirements. To ensure that the supplier quality standards are met consistently, it is recommended that supplier audits are conducted every two years.
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ComplianceQuest EQMS includes a dedicated portal called Supplier Central that can be used by quality and supply chain leaders to:
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Track all supplier-related data in real-time
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Submit requests to suppliers, contract manufacturers, dealers, or partners
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Respond to supply chain-related requests with agility
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End-to-end data visibility to review any supplier’s quality standing
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Communicate and collaborate with key stakeholders
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ComplianceQuest Supplier Management solution offers Supplier Readiness app that can be used to capture all supplier related information through a customizable auditing checklist tool. The checklist can be modified based on the risk levels of each supplier.
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