What are the best practices for conducting Supplier Audits as a Supplier Evaluation Method?

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Supplier audits are a common and effective method of evaluating the performance, quality, and compliance of your suppliers. They can help you identify risks, gaps, and opportunities for improvement in your supply chain, as well as build trust and collaboration with your partners. However, conducting supplier audits requires careful planning, preparation, and execution to ensure they are efficient, objective, and valuable. In this article, we will discuss some of the best practices for conducting supplier audits as a supplier evaluation method.

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1 Define your audit objectives and scope

Before you start an audit, you need to have a clear idea of what you want to achieve and what areas you want to focus on. Your audit objectives and scope should align with your supplier evaluation criteria, your business goals, and your contractual obligations. For example, you may want to audit your supplier's quality management system, environmental and social responsibility, financial stability, or innovation capabilities. You should also consider the frequency, duration, and type of audit you will conduct, whether it is on-site, remote, or hybrid.

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Luc Zilio

Retired Toyota Executive after 34 years
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In my experience, an audit is a means to help identify what are your requirements to a supplier, which quite honestly aren’t always as clear as they need to be. An audit isn’t a “got you” exercise but one that helps identify gaps that help suppliers understand where they need to improve. As such, a supplier should be afforded the opportunity to do a self assessment of the audit before the customer arrives so there can be a cross check of audit results after the fact. Suppliers can learn from this and better self audit on an ongoing basis

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Goutham Rathinam

Freelance Third Party Inspector
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In my experience, repeatability, re-producibility, user experience based quality will make a supplier stand out from the crowd and helps to build a reliable manufacturing ecosystem.

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2 Select and train your audit team

Your audit team should consist of qualified and experienced auditors who have the relevant skills and knowledge to assess your supplier's performance. Depending on the size and complexity of the audit, you may need to involve different functions, such as procurement, quality, engineering, or legal. You should also ensure that your audit team receives adequate training on the audit standards, methods, and tools, as well as the cultural and ethical aspects of conducting audits. Additionally, you should assign clear roles and responsibilities to each team member and communicate them to your supplier.

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3 Prepare and share your audit plan and checklist

Your audit plan and checklist are essential documents that outline the details and expectations of the audit. They should include the audit objectives, scope, criteria, schedule, methodology, and deliverables. You should also include a list of questions, documents, records, and evidence that you will use to evaluate your supplier's performance. You should prepare and share your audit plan and checklist with your supplier well in advance of the audit date, and solicit their feedback and confirmation. This will help you avoid any surprises or misunderstandings during the audit.

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4 Conduct the audit and document the findings

During the audit, you should follow your audit plan and checklist, and collect relevant data and information from your supplier. You should use a variety of methods, such as interviews, observations, inspections, tests, or surveys, to verify your supplier's compliance and performance. You should also document your findings in a clear and objective manner, using facts and evidence to support your conclusions. You should avoid any bias or prejudice, and respect your supplier's confidentiality and privacy. Moreover, you should communicate your findings to your supplier throughout the audit, and seek their clarification or explanation if needed.

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Bill Kohnen
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Of course, planning is key but generally keeping your eyes open and observing things during a tour is they key. Do not let a Supplier keep you in their conference room and just bring you policies and show power point all day. A 60-minute walk-through is all you need to determine these 10 key items (remember a picture or to see is worth a thousand words): Investment in infrastructure Maintenance of tools Process documentation actually used in the process Management of Inventory Production cycle time capability Capacity Logistics Capability Employee Training Employee morale Management Control Innovation And much more to the keen eye..................

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5 Report and follow up on the audit results

After the audit, you should prepare and share a comprehensive audit report that summarizes your findings, recommendations, and corrective actions. You should also include a rating or score for your supplier's performance, based on your evaluation criteria. You should ensure that your audit report is accurate, complete, and timely, and that it reflects the agreed-upon audit objectives and scope. Furthermore, you should follow up on the audit results with your supplier, and monitor their progress and implementation of the corrective actions. You should also provide feedback and recognition to your audit team and your supplier for their cooperation and improvement.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the best practices for conducting Supplier Audits as a Supplier Evaluation Method?

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1 Define your audit objectives and scope

2 Select and train your audit team

3 Prepare and share your audit plan and checklist

4 Conduct the audit and document the findings

5 Report and follow up on the audit results

6 Here’s what else to consider

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