As a company’s supply chain grows, so too does its risk. With every new supplier comes the threat of poor performance. Without proper oversight, the quality of supplied parts and components can slip through the cracks. A supplier audit is an effective way to examine the quality of a particular supplier and the risk it presents to the organization before it becomes a problem. Companies can improve their overall quality by ensuring their supplier’s product quality and delivery standards remain high – something a supplier audit seeks to establish.
Supplier issues can cost a company money, or worse yet, cause harm to its customers. With an effective supplier quality management solution, a supplier audit can be painless and can identify serious problems early in the production cycle.
The following is a list of benefits that can be realized by conducting a supplier audit:
Adopt Organizational Quality Standards
The quality of your final product strongly depends on the quality of your suppliers. It makes sense to enforce the same set of standards across the supply chain to ensure consistency. Compliance with customer quality management system requirements, industry standards and regulations can be automatically tracked and measured within an electronic quality management system. A quality audit will uncover any noncompliant material and will set a plan in motion to ensure conformance to industry standards.
Practice Effective Document Management
A supplier audit will ensure all quality documents related to a supplier are in place and properly archived. Important records for inspections, nonconformances and supplier approvals are verified during the audit process.
Identify Areas of Potential Risk
Complete traceability and product genealogy of every part, subassembly and final assembly ensures operational excellence throughout the product lifecycle. A supplier audit will identify any gaps in the supplier quality process, manufacturing process, engineering change process, and shipping process, allowing a manufacturer to close the loop on any deviations, nonconformances or delays.
Recover the Cost of Poor Quality
A supplier audit provides a comprehensive look at supply chain performance to identify winners and losers. Suppliers can have a significant effect on the cost of quality. Many of the factors that contribute to the Cost of Poor Quality (COPQ) stem from supplier-related activities. Manufacturers can then work with a supplier to improve quality or choose to pursue cost recovery through supplier charge-backs to recover the cost of faulty products.
Improve Supplier Communication
A supplier audit improves collaboration between the manufacturer and its suppliers. Visibility into supplier-related activities provides an open exchange of information and complete transparency on both sides of the relationship. Regularly scheduled audits ensure the manufacturer/supplier relationship is meeting objectives and continues to be mutually beneficial. When goals are aligned, the likelihood for manufacturing success is much greater.
Improve Customer Satisfaction
A supplier audit clearly defines quality objectives and enhances the process of bringing high-quality goods to market. Investigation into areas of risk identifies any adverse safety occurrence before it happens. With firm compliance and quality standards in place, customer satisfaction with the end-product is sure to improve.
A company’s reputation can be greatly affected by the quality put forth by its suppliers. A supplier audit is an easy way to introduce accountability into the supply chain and adequately measure supply chain performance.
Contact TIP Technologies to learn how we help companies efficiently manage their supply chains or request a demo of our TIP Supplier Quality Collaboration solution today.