Benefits of Conducting Supplier Audit

With the growth of a company’s supply chain, the risk factor also rises. There is no doubt about this aspect. With every new supplier comes the threat of poor performance. The quality of supplied parts will not match the desired levels without proper oversight. If you want to examine the quality of a particular supplier, conducting a supplier audit is mandatory. Organizations can improve their overall quality by ensuring their suppliers’ product quality and delivery standards. A large number of modern-day organizations hire supplier auditors just for this reason.

Importance of Supplier Audits

The benefits of conducting a supplier audit are listed as follows:

• Adopt organizational quality standards: The quality of your final product has volumes to speak about your supplier standards. You should try to enforce the same set of standards across the supply chain to ensure consistency. Another important aspect is compliance with customer quality management system requirements, industry standards, and regulations. All these elements can be automatically tracked and measured with the implementation of an electronic quality management system.

• Practice effective document management: With a supplier audit, marketers ensure all quality documents related to a supplier are properly archived. Besides documents, essential inspection records, nonconformances, and supplier approvals are scrutinized during the audit process.

• Detect areas of potential risk: New-age companies want to complete traceability and product genealogy in every aspect. With a supplier audit, marketers can detect gaps in the supplier quality process, manufacturing process, engineering change process, and shipping process. In this case, manufacturers have a chance to minimize the loop on any deviations, nonconformances, or delays. With the assistance of freelance procurement consultants, organizations are identifying their risk areas quite effectively.

• Recover the cost of poor quality: This is another major benefit of conducting supplier audits. Organizations need to assess their supply chain performance to identify winners and losers. The impact of suppliers is huge on the cost of quality. You should know that several factors add to the Cost of Poor Quality (COPQ) stem from supplier-related operations. If manufacturers work with suppliers collaboratively, there are chances of quality enhancement. Marketers can also get back their costs through supplier chargebacks.

• Improve supplier communication: A supplier audit comes in handy to maintain a cordial relationship between the manufacturer and its suppliers. In this case, supplier auditors have an important part to play. If marketers can view supplier-related activities, it enables an open exchange of information and complete transparency between both sides. If audits are conducted after regular intervals, it ensures the relationship between manufacturer and supplier is meeting objectives. The chances of production success are greater when goals are aligned.

• Enhance customer satisfaction: Defining quality objectives relating to a manufacturing process is the ultimate goal of a supplier audit. As it raises the quality standards of products, organizations get an opportunity to bring high-quality goods into the market. This is bound to improve customer satisfaction in absolute terms.

In this age of cut-throat market competition, the importance of supplier audits cannot be denied. Supplier auditors are making the task easier for companies in more ways than one. Conduct supplier audits after frequent intervals if you want to maintain the quality of your organization’s offerings.