When a new supplier is chosen for supplying raw materials to a company, the background and capability of that supplier should be checked thoroughly. Since the quality of raw materials decides the quality of end products manufactured by a company, the quality of the supplier’s materials should be determined as well. Thus, professional auditors are hired for this job by all manufacturers and even retailers before approving the service of a new supplier.
The type of industry and the reason for auditing are the main factors that decide when to seek supplier audits from well-known third-party auditors.
For checking a new supplier – When a company hires a new supplier who does not have any previous record of working with that organization, an audit of his performance is essential. The quality of materials, timely delivery, and other factors related to the function of a supplier are minutely checked while auditing, as it is quite risky to hire a new supplier with an unknown background.
Non-performance of an existing supplier – If a supplier fails to provide quality materials, his performance should be checked by an auditor. This audit will help the supplier to improve his performance, as all his weak points will be detected while auditing. However, the third-party auditor should be hired by the commercial company with which the supplier is associated.
Grave financial situation of the supplier – If a supplier is facing some financial or functional crisis, the continuation of hiring his service can be risky for a company. Hence, it is better to undergo a professional supply auditing to ascertain the security of hiring that supplier. The auditor will monitor his performance record to bring out a clear picture of the credibility of that supplier.
Different types of supplier audits usually practiced
Unannounced audit – This type of audit is done suddenly, without any prior notice to the site of the audit. Nowadays, this audit system is proved to be more effective, as the auditor gets the chance of seeing the realistic features of the supplier’s place and his goods.
Announced audit – Many companies prefer this kind of audit system and a specific date is fixed for the audit after discussing with the supplier. However, people get enough time to prepare the site for the auditor, for which it becomes impossible to find the actual features while auditing.
Desktop audit – This audit can be done remotely, just by checking all the related documents of the concerned supplier, like his valid license for work and certifications. The verification of his documents can prove if he is compliant with the standard set for suppliers. There are many merits of supplier audits for manufacturers, for which they hire third-party experts for these jobs. Manufacturing companies can rely on audited suppliers who are found to be having no compliance issues. This audit acts as a safety net for business owners when they need to hire suppliers for their raw materials. The purchase of materials from an audited supplier also ensures the delivery of high-quality finished products to customers.
