This is due to the fact that more businesses are beginning to realise how essential an audit is. This is especially true when it comes to supplier audits, in particular. Without such audits, an issue can continue to get larger until it causes a meltdown that affects both you and your supplier.
Are you wondering why supplier audits are important and how they can benefit you? Keep reading to learn everything about getting the most out of your supplier audits.
Supplier Audits are Vital to the Success of Your Supply Chain
No business wants to deal with a dreaded tax audit, but a supplier audit is something everyone should welcome.
Have you ever asked yourself, “What is a supplier audit?” Put in the simplest terms possible, a supplier audit involves assessing a supplier’s operations to see whether they meet a range of quality standards. These standards can apply to various facets of the supplier process, such as shipment and employment.
Your supplier audit objective would involve legal compliance, streamlining, and a host of other boxes to check off.
Conduct a Supplier Audit When...
You might be wondering at what moment a supplier audit is necessary. The last thing you’d want to do is spend time and resources on a premature audit or even one that’s too late. Simply put, there are three crucial moments when a supplier audit is necessary.
- You have a new supplier
With a new supplier, it’s hard to know if their practices are as good as they can be. This is a perfect example of why supplier audits are essential. By learning the ins and outs of their processes, you can have peace of mind that the new supplier meets ethical and environmental standards.
If there are any issues, you can either work with the supplier to improve operations or decide to take your business elsewhere. This could save you a significant amount of money and hardship than if you found out about specific issues after already signing a contract, for instance.
- You want to help an existing supplier improve
Perhaps you’ve had your current supplier for a long time and don’t feel comfortable moving to another one. Instead of letting them go, you can invest in an audit and ensure your current supplier has reached its greatest potential.
By using an audit checklist for manufacturing company suppliers, for example, you can assess each aspect of the operation and fine-tune it where necessary.
- A particular supplier is critical to your business
Depending on your industry, you might have seen suppliers come and go over the years. While some suppliers aren’t integral to the functioning of your business, others can make or break your operations. These critical suppliers are the ones you should focus on most of all when thinking about audits.
An audit can be seen as a form of insurance. Not only will it help your supplier to thrive, but those benefits will also carry over to your business.
Areas to Focus On
Are you still wondering how to do a supplier audit? The best audits are comprehensive and leave no stone unturned. There are three main categories you should keep in mind when investing in a professional audit.
- Business systems most vital to your business/supplier
From marketing and sales to training and order fulfilment, there are many business systems that make up the greater whole. Not all of these systems are vital to every type of business out there.
A smaller business may not require intensive employee training. No matter what industry you work within, you should identify which systems are most crucial for your survival. That way, you can guarantee a thriving brand for the foreseeable future.
- Compliance fundamental to your organisation’s reliability
Some compliance issues can apply to every business, such as discrimination and remuneration. However, other compliance issues may have nothing to do with your operations.
For instance, you should have an audit checklist for the food industry that includes sanitation, ingredients, preparation methods, and other staples. Aside from business systems, an audit should also focus on complying with the regulations relevant to your industry.
Of course, you should work with an auditor who knows the ins and outs of each industry in terms of compliance. That way, you can rest easy knowing that the right boxes are getting checked off.
- Process improvement
Anyone who has ever asked how to conduct a supplier audit should remember that process is fundamental. While it’s crucial to ensure your business engages in legal and ethical practices, it’s just as important to have a process that isn’t wasteful regarding your resources.
By becoming more efficient, both you and your supplier can earn more money in a shorter amount of time.
Aside from financial concerns, there’s also the matter of the environment. By focusing on a supplier environmental audit, you can improve public relations. More customers are voting for greener practices by using their dollars. They’re much more likely to support a business that cares about the environment than one that throws caution to the wind.
Are You Ready to Get Reliable Supplier Audits?
Now that you’ve learned everything about getting the most out of your supplier audits, you can ensure that you achieve sustainability and have the most ethical practices on the market. You’ll be left to scramble in the dark without a supplier audit.
From Ethical to Environmental, Azolla Certified can provide comprehensive audits, future guidance and certification, so your company reaches its full potential and meets necessary regulations. The process is a great foundation to your Modern Slavery Statement and ESG analysis. A company with Azolla Certified products is one that customers know they can trust.
Don’t hesitate to contact us if you’d like to learn more about our highly-rated services.