Category: Audit

Top 3 Benefits of C-TPAT Audits

depthomelandsec1Although the program started in 2001, there continues to be a lack of understanding regarding what C-TPAT is and how it benefits and adds organizational value.

What is it?

“The U.S. Customs-Trade Partnership Against Terrorism initiative (C-TPAT) is a voluntary U.S. Customs and Border Protection program designed to improve border security while also accelerating the processing of import shipments.”

What do we have to do with that? 

Pro QC audits suppliers for conformance to the C-TPAT requirements, as part of your preparation process to register in the program or general risk management. Many companies require their suppliers to comply even though they don’t officially register in the program since a C-TPAT audit will provide information that is useful in managing the security of your production, products and tooling at the supplier factory.

Why do it?

1)  The program has indicated from its inception that C-TPAT importers are 4 to 6 times less likely to incur a security or compliance examination. It is estimated that 1 exam occurs every 5 movements.  Partners in the program receives FAST lane access that saves time crossing the border.

Preparing for an audit

checkmark_blueA previous Quality Q & A newsletter article featured tips for audit preparation.   In the reprinted content below, Pro QC’s Supplier Development Manager discusses how each party can expedite the process.

 

Preparation for a factory audit can be broken down by responsibilities of the client, supplier (factory) and third party (Pro QC). Communication and documentation are key actions that increase the likelihood objectives are met.

The Client:  

  • Inform the supplier to let them know an audit will be scheduled and provide additional contact details as available. Consider the length of time requested by the supplier, in addition to any initial hesitations noted.
  • Evaluate the expectations of the audit and relevant necessary components that should be incorporated into an on-site checklist or other evaluation tool.
  • It is not considered appropriate to surprise a supplier with a visit to perform an audit.

The Supplier:

  • Inform related internal people about the scope, agenda and contents of the upcoming audit.
  • Complete and submit the Supplier Profile and Booking form that will be supplied to you by the Pro QC Project Coordinator.

Pro QC International (3PQ):  

  • We work with the client to understand their expectations and the product and specific standard(s) involved.
  • We select a suitable audit checklist or develop a customized one if necessary.
  • We select the auditor best suited to the requirements noted and provide him/her with necessary training and recommendations to follow.
  • We provide an audit notification letter along with an agenda of the audit, the booking form fro scheduling and the Supplier Profile form to the supplier to inform them of the audit activities so that they can inform and prepare their internal attendees.

Top 3 – Key factory audit components

Performing factory audits to assist in supplier selection or throughout the production cycle is a primary contributor to a reduction in both sourcing risks and cost.  While specific standards often apply, such as the ISO series, factory audits do have several key components in common.

1) Management 

Who is the management and what management style is generally supported within the corporate culture?  Through observation and interviews, an audit reveals attitudes and general values that serve as indicators of the overall organization’s realized performance.

“One of the greatest lessons I’ve learned over the past couple of decades, from a management perspective, is that really when you come down to it, it really is all about people and all about leadership.” ~Steve Case

2) Metrics –

Show the data.  Suppliers should be able to back-up any claims with supporting data that can be reviewed and verified.  The specific metrics vary depending on a number of factors, but identifying those factors and making sure suppliers are following through with documentation and review is critical to any industry.

“90% of making the correct decision is gathering information.”

3) Corrective Action

No one is perfect.  But, the difference lies within how an organization handles nonconformities, or any service affecting issues that may occur.  Having paperwork on-hand is an excellent start, but suppliers should demonstrate through training and observation that staff consistently follows through with procedures.  Also, how is the supplier tracking trends and making necessary process improvements?

“For every failure, there is an alternative course of action. You just have to find it. When you come to a roadblock, take a detour.” ~Mary Kay Ash