There are so many organizations that handle a plethora of suppliers that executing regular auditing seems inconceivable. You can conduct an eligibility check while joining a new supplier, but after that, how do you know you can continue to trust those suppliers?
When a supplier can’t meet your quality expectations and criterion, you pay the cost. Nor is it just about your money: your reputation may be at stake, and if you mishandle an incident, you even risk losing your talented working staff. They could choose to go to some other company; he may suffer such a financial loss that he is forced to make job cuts, or your staff might have to fall for what was actually the fault of your supplier.
The interruption of the supply chain is equally expensive. Not only do you have to manage production downtime, but you must also ensure that your customers and reconfigure other production programs to continue maximizing the benefits of installation.
In fact, last year, 1 out of 3 companies experienced accumulated losses through the supplier failures for a sum of 1 million euros. That study also does not take into account the long-term impact on a company’s reputation or the ability to retain its talent.
If that is not enough for you to re-think about auditing your suppliers on a continuous basis, here are 3 more reasons to consider your supplier audit from a leading third-party inspection company immediately:
# 1 – It saves your money as well as time
The first and most obvious advantage of regularly auditing your suppliers is that it significantly mitigates the risk. You can:
- Track the performance of your suppliers against service level agreements
- identify repeated problems
- highlight possible future problems before they occur and create contingency plans
No more annual losses of 1 million euros for supplier failures!
# 2: You will make sure that suppliers meet your quality standards
If you do not audit your suppliers on a regular basis, how do you know you are on the same page? You have high standards to meet, but are you doing the same? How do you know they practice what they promise?
The standards change and adapt all the time, so it is essential that you regularly audit your suppliers according to the relevant changes. For instance, the upcoming changes in the famous ISO 80000 also reveal the differences in measurements between the suppliers. If your supplier’s prices per kilogram, for example, how do you know you are getting a fair price? Is the measurement of the kilogram YOU or another version?
In 1999 there were omnishambles around the world when NASA lost the Mars Climate Orbit satellite. It burned, all $ 125 million. All because the international teams had used two different measures: the British had used imperial measures and the US team was metric. Interpreting the measurements incorrectly led to the loss of an extremely expensive part of the kit.
# 3 – You’ll guarantee continuous quality improvement
Without continuous audits of the suppliers, it is difficult to know if you are receiving consistent products, on time, with the correct standard, without defects. It makes its own commitment to quality improvement which is almost impossible. You need a complete and complete overview of the performance of your suppliers to establish contact points of best practices for the continuous improvement of quality.
By regularly auditing your suppliers, you also strengthen your relationship with them. If you allow your suppliers to “keep up their work”, then you are missing opportunities for new alliances, better prices, and opportunities to share knowledge.
Periodic audits as on-site inspection are possible and even easy with software tools such as EQMS Audit and Inspection Manager. Audits can be carried out on the site without the need for wireless Internet access, so your auditors can visit the sites and complete their audits without having to return to complete the documentation.