Supplier Solutions
We design these customizable supplier solutions to support the needs of companies that wish to perform audits on their suppliers to ensure contractual requirements are being met.
How Conducting a Supplier Audit Can Improve Customer Satisfaction
It's a basic axiom that customer retention is less expensive than customer acquisition. At the heart of customer retention is customer satisfaction, and customers won't be satisfied if they receive products that are faulty or late because of supplier-related issues.
A good supplier audit can help prevent and resolve problems with supplier performance, quality and delivery, directly resulting in improved customer satisfaction. A supplier audit provides a window into a vendor's operations, ensuring they meet the manufacturer's needs and standards and, in the end, the needs and standards of the customer. Below, we'll cover the basics and benefits of supplier audits so you understand their importance in your operation. We'll also provide a good supplier audit check list and discuss the tenets of the supplier audit/customer service connection.
Supplier Audit Basics
Supplier issues can have serious ramifications — late deliveries, lost production time, even product recalls. All of this can be avoided or remediated with a strong supplier audit.
An effective audit will take into account a wide range of considerations. The review should look at specifications like pricing, delivery expectations and quality requirements. A rigorous supplier audit will cover business system aspects, compliance efforts and performance.
Pre-audit research is one of the keys to a successful audit. This can include reviewing:
- The supplier's online presence
- The quality agreement with the supplier
- Past audits
- Other customers' complaints
- Current product specifications
- The supplier's outsourcing plans
Interviewing in-house staff before conducting a supplier audit can also be beneficial.
In preparing for a supplier audit, it's important to not make assumptions. A supplier's certification to ISO or other standards doesn't automatically guarantee quality. Make sure to have a plan in place to assess every aspect of an organization.
Supplier Audit Check List
A supplier audit check list is essential for a thorough assessment. Each audit will vary depending on the vendor, but a flexible check list can help ensure that the review covers all of the necessary information.
A good supplier audit check list can include:
- The number and type of product-quality problems that led to product rejections
- Product design processes
- Purchasing practices
- The supplier's supply chain
- Day-to-day aspects of production
- Capacity and capacity utilization
- Staffing and personnel qualifications
- The inspection and testing process
- The product-release process
- Delivery performance
- Costs and pricing
- Quality management
- Maintenance programs
- Safety and environmental programs
- Risk management and mitigation plans
- Regulatory compliance
- Process improvement programs
- Management's ability to address issues
- The supplier's financial stability
Beyond the Supplier Audit Check List
Creating and following a thorough supplier audit check list are just the first steps in a successful audit. For a supplier audit to have meaning, it must be more than just an exercise in paperwork.
While documentation is crucial, every audit should also include an actionable set of recommendations based on the findings. Auditing a supplier is more than just checking items off a list. It's an opportunity to effect substantive improvements.
Beyond the Supplier Audit Check List
Creating and following a thorough supplier audit check list are just the first steps in a successful audit. For a supplier audit to have meaning, it must be more than just an exercise in paperwork.
While documentation is crucial, every audit should also include an actionable set of recommendations based on the findings. Auditing a supplier is more than just checking items off a list. It's an opportunity to effect substantive improvements.
When Should a Supplier Audit be Performed?
In some cases, the quality agreement will outline when audits should be conducted. There are also specific instances that should trigger a supplier audit, such as:
- A new vendor doesn't have enough available performance information.
- An existing supplier is performing poorly and needs assistance.
- A vendor is critical to the manufacturer's success.
The timing can vary from every six to 12 months, depending on the number of problems identified in the audit.
The Benefits of Supplier Audits
While improvement for improvement's sake has some value, there are other benefits of supplier audits.
A thorough supplier audit will bolster the adoption of quality standards throughout the supply chain. If every link in the chain adheres to the same standards, the result is a measurable improvement in product quality.
When conducted correctly, an audit also will ensure proper document management. All of the quality paperwork and documentation concerning the supplier will be in place.
An effective audit will pinpoint potential risks, as well, and provide the opportunity to close the loop on any gaps in the supplier's processes.
Another benefit of performing an audit is improved supplier communications. A well-executed supplier audit places the manufacturer and vendor on the same page, creating an open exchange of information and increasing the chances of success.
An audit also will allow the manufacturer to recoup the cost of poor quality. A successful supplier audit will identify and provide corrections for the supplier activities that reduce quality.
The Supplier Audit-Customer Service Connection
A supplier audit and customer service go hand-in-hand. All of these benefits of supplier audits contribute directly or indirectly to customer satisfaction. Every step toward eradicating problems and enhancing quality is a step toward increasing customer satisfaction.
The actions outlined in a thorough supplier audit can improve delivery times, decrease part defects and support a successful manufacturer-customer relationship, fostering customer satisfaction as a logical result.
Trust Your Supplier Audit Needs to Smithers
We have years of experience in auditing manufacturers and suppliers throughout a wide range of industries. Our supplier solutions come with our expertise and knowledge of today's manufacturing landscape. You can rely on our supplier audit to be clear, thorough and actionable. Request a quote today for an audit of your suppliers.
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