With the growth of a company’s supply chain, the risk of obtaining revenues also grows. Each supplier arrives with the threat of poor performance. Your company needs to take that risk for the betterment of your business. The quality and standards of supplier parts and components have chances of getting slipped through cracks if no proper oversight is implemented. Here, a supplier audit can play an effective role in examining the quality of a supplier and the risk it brings to an organization before any problem arises. Improvement of overall quality can be achieved if the quality of a supplier and their delivery standards are high. A supplier auditor, therefore, is often appointed to make sure that the goal is achieved. Such an auditor takes every single responsibility for making a company reach heights.
Further, issues with suppliers can also lead a company to face massive problems. This would then lead to cause harm to its customers. A supplier audit can be very painless if proper and effective supplier quality management solutions are brought on board. Such a management solution can also result in the proper identification of serious problems early in the cycle of production. An auditor in supply management can always implement strategies with which the whole process of buying and selling goods can lead to a new and better phase.
Benefits Of Conducting A (Good) Supplier Audit
Below mentioned are the major 5 benefits of conducting a good supplier audit. Read to know in detail about them:
Practising Effective Document Management
Keeping documents in an organized and proper manner is always needed. Similarly, a supplier audit is conducted to ensure all quality documents are properly archived and kept in place. Such an audit also verifies important records of nonconformances, inspections, and supplier approvals. Effectively management quality documents for running an organization well should always be one of your topmost priorities. This is truly one major benefit caused by conducting a supplier audit exceptionally by a supplier auditor. Such an auditor solely does the needful to avoid malfunctions in managing documents.
Identifying Areas Of Potential Risk
Identifying areas of potential risk is an ideal thing to do for the betterment of supply chain management. Product genealogy and complete traceability make sure that operations are being executed excellently throughout a product lifecycle. Here, a supplier audit effectively identifies gaps in supplier quality processes, shipping processes, engineering change processes, and manufacturing processes. The audit then allows a manufacturer to close loops to delays, deviations, or nonconformances.
Adopting Organizational Quality Standards
The quality of your supplier strongly determines the quality of your final product. It is very sensible to enforce the same set of standards across the supply chain to make sure that there is consistency in it. With the advancement of customer quality management system requirements, tracking and measuring industry regulations and standards happen automatically within the system of electronic quality management. Here, a supplier audit is meant to uncover uncompliant materials and will accordingly set a plan to ensure conformance to the standards of the industry. A supplier auditor will responsibly carry out this process.
Improving Supplier Communication
A supplier audit effectively enhances collaboration and communication between a manufacturer and its suppliers. An open exchange of complete transparency and information on both sides of the relationship is greatly provided by visibility into supplier-related activities. Regularly and consistently scheduled audits ensure that a manufacturer and its suppliers are living a healthy relationship and meeting objectives, and continue to be beneficial mutually.
Recover the Cost of Poor Quality
A comprehensive look is provided by a supplier audit at supply chain performance only for identifying winners and losers. Suppliers can have a significant effect on the cost of quality. Moreover, they are a lot of factors that can determine and contribute to the Cost of Poor Quality (COPQ) stem, especially from supplier-related activities. Then, manufacturers can work with their suppliers for improving performance and quality consecutively. In either way, a manufacturer can choose to pursue cost recovery processes through supplier charge-backs only for recovering the cost of faulty/defective products.
A company’s reputation is mainly held by supplier auditors. The reputation can be affected greatly by the quality. Therefore, such an auditor should always ensure that the quality and standards of products are maintained well. He/she should also make sure that there is a proper way of introducing accountability into the supply chain management system and accordingly, supply chain performance is measured adequately. Auditors in supply chain management are the major responsible workers who provide regular insight to a company based on quality. Therefore, it is their keen duty to do the needful in the perfect and organized way for maximizing revenues and generating more and more profits for an organization.