The benefits of a site supplier audit are many. Having assurances in respect to supply, environmental compliance, safety standards and quality measures are the primary reasons we complete them. And finding the right suppliers has never been more important than today. The global recession has added additional pressures on the very survival of many companies.
How do you know that your supplier is capable of meeting their obligations or commitments? You do so by completing a site audit of their production facilities. This is often part of a buyers due diligence with large dollar spend and should be an exercised practice in your buyer / supplier relationship. Note, not every vendor you do business with warrants a site audit. Site audits can be costly when you factor in travel to the manufacturer’s facility and can be time consuming so be strategic and target vendors which are integral to your supply chain.
A physical audit is the best way to gather reliable information about your supplier’s business practices, capabilities, competitiveness, cost drivers, safety standards and service culture. From these audits you can glean whether it is a vendor you wish to maintain a longer term relationship with or whether you should consider sourcing alternatives.
When planning your audit you want to reserve time with the production or operations manager, safety representatives, environmental leader and administrative personnel. You are interested in getting a sense of the culture and to do so you need to talk to employees in the plant. This is where you are going to receive the desired responses. Your objective while on-site is to inspect the condition of the production equipment, buildings, safety equipment, documentation, attitudes of staff and so on.
Prior to arrival ask for a flow chart so you and your colleagues can study the production line from start to finish. This permits feedback from your production personnel prior to the audit. Seek written approvals from Vendor to bring and take pictures during the audit. If the facility produces more than one product, schedule your appointment when they will be producing items you purchase from the seller. Remember this is not a sales call so insist that plant operations personnel act as your tour guide. They understand the process and it will make more sense if you following the line in a logical sequence so ask to start at the gate and to finish up at shipping.
Checking out their inventory, storage capacity and production capabilities will give you a sense as to ability to supply your needs. Can they ramp up production if you have a unplanned production requirement? Are the safety training records current and readily available? Does the facility look like it will be shut down for environmental non-compliance?
What are their training standards like and why is this important? It is important because the quality of the finished product relies on the plant employees. Poorly trained staff with zero pride in their work will produce a poor quality product which in turn will impact your business.
RFP Templates.org has a sample site audit form, a sub-contractor evaluation and a vendor performance evaluation form to give you an idea of what questions to ask. Hundreds of hours have gone into developing these templates and they will help you get your site audits on track.
Template #22 – Facility Audit Form
Template #30 – Vendor Performance Evaluation
Template #31 – Sub-Contractor Evaluation Form