For organisations which are getting more reliant on the products and services of their suppliers or outsource more and more business processes to prudent partners, supplier quality management (SQM) is a critical activity for them. The supplier audit makes sure that the suppliers perform at or above the levels both parties have agreed in the procurement contracts. The companies can engage an audit firm in Johor Bahru to conduct a supplier audit if they are not familiar in conducting audits. This is for them to incorporate the best practices to develop the necessary checklists and procedures in a supplier audit so that they can determine if there is any underperformance and treat them promptly.
The lead auditor ( Also see Characteristics of an Excellent Auditor) who is responsible for identifying the audit scope will plan for the audit. In this stage, the auditors may develop an audit performance metric, which consists of a scoring card and a checklist, to determine measurable performance areas which they will focus on the audit. The factors they may consider include factors like quality of the product, response time to customer’s orders and requested adjustments, as well as on-time delivery. Besides, auditors should also mention capital, technical and human resources (Also see The Importance of Conducting Human Resource Audits) they need for them to perform the audit adequately.
Throughout the audit process (Also see Introduction to Audit Procedures), the auditors need to protect, measure and document the performance data over a particular time frame. They will need information about the company’s supplier for them to perform the supplier audit effectively. For example, they have to obtain and assess the quality manuals, current certifications, as well as policies and procedures of the company’s suppliers. Throughout the supplier audit, there are many parts that the auditors have to manage effectively. They need to prepare themselves for the adjustments on audit schedules and changes on the audit scope.
The auditors should include the data and information they acquire from the company’s performance metrics in their audit report (Also see What is an Unqualified Audit Report?). The reporting process helps in highlighting the root cause of the problems in the performance of the company. Auditors should include the corrective and preventive actions they suggest in the audit report. Also, they need to incorporate previous audits into the audit report to ease the process of tracking historical performance variations. In the report, they should also include qualitative information about the company’s suppliers, for example, internal interviews with employees who have worked with the suppliers before, or the observation of the suppliers’ performances they have noticed. Besides, they should incorporate the performance data of other entities in the same industry for them to make comparisons between the company’s supplier ratings and that of the benchmark standards.
After the supplier audit has ended (Also see How Do Auditors Close an Audit), the company need to review the audit results with the management of the suppliers. This meeting should be formal so that the supplier representatives can provide feedback on the performance data the company has obtained through the audit. The process of reviewing the audit results serves to provide an opportunity for the company to strengthen its collaboration with the supplier and discuss any underperformances truthfully. This is when the company will establish objectives and goals on the performance of the suppliers to remedy existing problems if there is any.