Evaluating potential suppliers with Supplier Quality Audits

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What is a Supplier Quality Audit?

A supplier quality audit is a general assessment of the supplier’s operation and quality capability. It is more in depth than an initial supplier verification. It is broader in scope that a manufacturing process audit as it covers many aspects of the quality management system, but still less exhaustive and therefore faster than a full quality management system audit.

A supplier quality audit provides purchasing managers and quality personnel enhanced data and transparency on the best practices at each factory or supplier. It can then be used to inform the final decision on whether to confirm the purchase order. Pro QC International recommends conducting a supplier quality audit with each new factory or supplier.

When and why is a Supplier Quality Audit needed?

Evaluating potential suppliers

The supplier quality audit is a cost-effective way for anyone from one-time buyers to large multi-national companies to assess the legitimacy of a supplier and ensure they are making the right purchasing decision. For larger companies, the evaluation becomes an integral part of a supplier performance management program.

Supplier Evaluation Funnel

In the process of supplier evaluation and management, a buyer will initially need to screen a large number of suppliers. Many will eventually be eliminated leaving only those suitable for long-term buyer-supplier partnerships. Audits of increasing scope (or narrower focus) help to achieve this more efficiently. The supplier evaluation funnel presents this process.

In the early stages, a large number of suppliers are subjected to verification, where basic due diligence is performed (is the factory legitimate and does it produce what it says it does?).  Supplier Quality Audits are the next key step in shortlisting suppliers, where auditors produce a general assessment of the factory’s operations and quality capability.

Next is a focused manufacturing process audit specific to a buyer’s product. A quality management system audit may follow, where auditors take a deep dive into a supplier’s QMS and help buyers determine long-term partnership suitability. Finally, the process of supplier development helps improve the factory’s performance and strengthen the partnership over the long term.

Valuable in any industry

A supplier quality audit is valuable in any industry because auditors examine established quality practices including control of training, written documentation and records, inspection and testing, and handling of nonconformances. These pillars of a quality system are set forth in detail in ISO 9001, the international quality management system standard (A supplier quality audit is informed by this standard but does not check against its requirements explicitly).

These practices apply anywhere and the audit is useful for a supplier that is already ISO certified, on the way to certification, or has no plans to certify at all.

Supplier Quality Audit checklist

What goes into a supplier quality audit? And what comes out? A comprehensive checklist, followed by an audit report.

Business sections audited

The auditor will follow a systematic audit checklist covering eight areas of operation that contribute to product quality:

  • Management responsibility
  • Document control
  • Purchasing
  • Product identification and traceability
  • Quality assurance/process control
  • Packaging
  • Control and nonconforming parts and rework
  • Corrective action

Questionnaire

The auditor will follow a questionnaire with prompts such as, “Are quality decisions such as Accept on Deviation (AOD) approved strictly by the authorized QC/QA personnel? Are there necessary records to demonstrate traceability?” This question pertains to the quality assurance/quality control section of the business.

The auditor will examine records and documents addressing the above and document findings as necessary. If the team finds that various production managers approve deviations based on who is available, or that a written deviation procedure is absent, they will document this as a potential nonconformance and cite the applicable written procedure or record. Wherever possible, a photograph or photocopy is appended or cited so the person responsible for addressing findings will know where to start.

Identifiers, photos, and other objective evidence

The report will include details of responsible parties, management structure, certificates and business licenses, and photos of production and testing areas. Each finding will reference specific documents and records, and will provide a traceable and verifiable picture of the quality capability of the supplier.

Audit summary and recommended corrective actions

The report will present prioritized recommendations for action in plain language to allow effective correction. An overall risk score (plus a score for each section) will help purchasing managers make quick decisions before delving into the technical details of the report below.

The audit report

Pro QC clients can expect a comprehensive audit report presented in exhaustive detail. Each element of the checklist will be compared to the actual condition, citing objective evidence such as photos, interview summaries, and examined records and documents. Pro QC’s supplier quality audit report provides critical insights into any supplier’s level of general operational excellence.

Report contents

The audit report is professionally designed, formatted, and controlled and begins with auditee identifiers including the factory/supplier contact info and personnel participating in the audit. The report includes photos of name cards, business licenses and tax payment records. ISO certificates and other credentials will also be examined, verified, and reported.

The audit report summary will describe the scope of the audit and the general audit activities in plain English, including the auditor’s professional impression of the visit. Before proceeding with technical language describing audit findings, this section will present prioritized recommendations and other areas for improvement.

The report will describe the auditee’s general business scope, including number of clients, countries of operation and export, and production volume/capacity. The auditor will tour production areas and document production and testing equipment (including calibration) and photograph work.

A questionnaire for inspection and reporting of findings follows, and includes references to objective evidence such as photos, records and documents.

Addressing findings

Each audit finding is presented with a description of the condition (along with evidence), and a reference to the applicable requirement that is or is not being met. The finding is graded and color coded as compliant, noncompliant, improvement needed, or not applicable.

From there, the factory must act. A designated person replies to each finding in the audit report and indicates whether they agree or disagree. The factory addresses each finding according to the auditor-recommended timeline. The auditor conducts an effectiveness check and documents further evidence as to whether it was fully addressed.

View sample reports

Download a free supplier quality audit report PDF here Sample Reports

Last word

Pro QC’s supplier audit report details a supplier’s general operations, quality procedures, operator qualification, and overall capability. This will help any buyer enhance their supplier partnership and feed an effective supplier management program.

About Us

Pro QC International is a global quality assurance company with deep experience in the field of auditing, supply chain and quality management. We offer a large range of quality solutions and in over 88 countries. Contact us at info@proqc.com



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