Call us Join or login
Client login Supplier login
I’d like to join a network Get started
Altius
Login or Sign up
Client login Supplier login
I’d like to join a network Get started
Category: Uncategorised

How to conduct your social housing contractors audit effectively

Social housing contractors

When it comes to your social housing contractors, as a procurement manager, you have got a lot to monitor and manage, ensuring that they’re all compliant with your housing association regulations. One way of staying in complete control of your social housing contractors is by conducting audits…

On-site auditing, when effectively implemented, can arguably be considered one of the most important tools in the quality system tool box. By introducing audits into your housing association you can identify areas of ineffectiveness, enabling you to take corrective action, and ultimately support continuous improvement.

The right people

As well as figuring out whether you have the time internally to complete contractor audits, you need to ensure that these people have the right training and qualifications to complete such assessments.

While your in-house team might have the correct qualifications to complete an audit, you need to consider whether or not it would make more sense to organise further resource, such as administrative staff to help chase and organise the details that will come back following an audit.

There is always the opportunity to outsource your audits to a company that specialises in audits too, as they will handle the whole process for you, documentation included. This might be beneficial if you’re struggling to find the right people and the resource needed internally – keep in mind that the end result of any audit is to manage your contractors better.

Desktop audit

Using the desktop audit initially, you can check your contractor information, such as their certifications, insurance documents and background to make sure that they meet your requirements – keep an eye on certifications that are coming up for renewal!

This type of audit could also help you to open dialogue with contractors concerning opportunities for improvement and how they could bring a mutual advantage, perhaps a course training them specifically to work with vulnerable adults.

Improve your social housing contractor compliance today >

On-site audit

If following your desktop audit, you determine that further checks are required, this is when an on-site audit should be considered. If there’s a particular problem that you have identified with a contractor you should take action to investigate and identify the cause of the problem by carrying out an on-site audit.

From this point, you can suggest corrective actions and submit them for approval, once approved the changes can be implemented and tracked using KPIs to monitor effect and performance.

This multi-layered approach allows you to assess your contractors as efficiently as possible, while ensuring any problems are resolved.

Continual monitoring against KPIs

Conducting your audit is a way of monitoring your contractors – by doing this, your team can regularly check the compliance of contractors, provision of resource and the ability to continue working with the housing association in the future.

Don’t wait until you notice that a contractor is underperforming before you start to implement the auditing process, by this point, it is often too late. Your audit should be undertaken on a regular basis and use a multi-layered approach of desktop and on-site audits.

Define your policies

Even if you have all of the previous points in place, you won’t achieve an effective audit of your social housing contractors if your policies aren’t up to scratch.

By making sure that your contract requirements, policies and project specifics are clearly outlined to your social housing contractors, you will be able to avoid any claims of misunderstanding when you carry out your audit. These documents should also be readily available for any of your contractors to access at any time, should they wish to do so.

Contractor compliance best practice

Conducting effective audits with your social housing contractors is only part of the process when it comes to ensuring total contractor compliance. If you’re looking to achieve better compliance within your housing association, you should download our new eBook, the Best Practice guide to Social Housing Contractor Compliancewhich takes you through achieving compliance, step by step – while giving you tips along the way!

Download the Best Practice Guide to Social Housing Contractor Compliance

5 qualifications you should expect your social housing contractors to have

Social housing contractor qualifications

Reputation is extremely important when it comes to the success of a housing association, and a lot of a housing association’s credibility is built on their contractors and the work that they carry out, in terms of quality and timescales.

With this said, it is becoming increasingly important for contractors to hold and maintain recognised and up to date qualifications to prove their ability to work, alongside their relevant experience and references.

While many contractors might argue that taking time out to get training, or re-register their qualifications is the last thing on their minds, especially as another contract beckons, those that do hold qualifications will stand out from the crowd – making it easier for you to decide which contractors to employ next.

As a procurement manager, you’ll be dealing with a wide range of contractors and sub-contractors, all carrying out different projects for you – so there’s a lot of different qualifications out there for contractors (way too many for us to cover here), but here are 5 qualifications that you should look out for when on boarding your social housing contractors.

1. PRINCE2 (Projects in controlled environments)

Used extensively by the UK Government, PRINCE2 is also widely recognised and used in the private sector, both in the UK and internationally – it is used to show that an individual or business has a process based method for effective project management.

Gain a better understanding of your prospective contractors >

In order to gain the accreditation, contractors will have had to show that they have a common and consistent approach to projects, ensuring that they are controlled and organised from the start, the middle and to the end.

They will have also had to provide proof that they regularly review the progress of the project against the original plan, and provide justification of the project to the business. These skills will be beneficial when hiring social housing contractors to carry out projects for you.

2. MSP (Managing Successful Programmes)

MSP represents proven programme management best practice in the successful delivery of transformational change through the application of programme management.

A contractor that holds this qualification will have had to prove that they are able to utilize best practices in programme management to successfully deliver transformational change, carry out coordinated organisation and implementation of projects to achieve outcomes in a timely manner and also to manage the solutions developed and delivered by projects into the organisations operations while maintaining a high level of performance and effectiveness that you would expect.

3. Involvement with the CPD

The CPD are Continuing Professional Development is the term used to describe the learning activities that professionals engage in to develop and enhance their abilities. Being part of the CPD shows that the contractors you are looking to employ stay up to date with the latest training workshops and are continually looking to improve their skillset.

Engaging with CPD activities ensures that both academic and practical qualifications don’t become out-dated or obsolete for your contractors which means that you will have greater reassurance that all qualifications are at the level that they need to be for working with the housing association.

4. ISO 9000 – Quality management

The ISO 9000 family addresses various aspects of quality management that provide guidance and tools for contractors and organisations who want to ensure that their products and services consistently meet customer’s requirements and that quality is consistently improved.

Standards are based on a number of quality management principles that include a strong focus on the consumer, the implication of management process, and the approach to continual improvement.

5. ISO 14001 – Environmental management

The official definition by the ISO agency of ISO 14001 is ‘an internationally agreed standard that sets out the requirements for an environmental management system. It helps organisations improve their environmental performance through more efficient resources and reduction of waste, gaining a competitive advantage and the trust of stakeholder’.

Using contractors that hold the ISO 14001 qualification will help the reputation of your housing association as it shows that the housing association is committed to meeting its corporate social responsibility goals, which can help to maintain the trust of stakeholders.

Checking the viability of prospective contractors

As a procurement manager, you will know that the Pre-Qualification Questionnaire (PQQ) templates have become standardised throughout the industry. However, sometimes this mandatory information isn’t enough when it comes to on boarding your contractors, especially if your housing association has internal standards in place.

This is where the use of adapted or bespoke PQQs come into play. If this is something you feel that your organisation needs to identify the correct social housing contractors, you should download our eBook, The all-in-one PQQ checklist for housing associations that can give you guidance to create your own version.

Download the all-in-one PQQ checklist for Housing Associations

Free seminar briefs businesses on revised Health And Safety Sentencing Guidelines

Businesses are invited to find out how to protect themselves against stiffer penalties under the revised Health And Safety Sentencing Guidelines at a free seminar in Leicester on Tuesday 26 April 2016.

Keynote speaker Phil Taylor, Head of Health and Safety for supermarket group Morrisons, will join compliance and legal experts from joint hosts Altius and Howes Percival LLP to explain the updated Sentencing Guidelines.

The expert speakers will advise businesses on what they need to do to comply with what Health and Safety Laws, including CDM 2015, and what measures they can take to ensure they don’t get caught out by bigger fines and possible prison sentences under the revised Sentencing Guidelines.

Nowhere to hide with new guidelines

With stiffer sentencing guidelines for health and safety, corporate manslaughter and food safety and hygiene offences, now introduced in England and Wales, organisations should tighten up health and safety compliance and push it further up the board room agenda, says Gary Plant, Managing Director of health and safety compliance specialist Altius.

He continued: The new guidelines mean there is nowhere to hide when it comes to facing up to health and safety breaches and even if procedures and policies are robust in your own organisation, you could face exposure from suppliers. It is business critical for organisations to scrutinise their health and safety policies, training and compliance, and ensure that risk is assessed across the entire supply chain and standards are applied and continuously monitored.”

The Information on Revised Health And Safety Sentencing Guidelines half day seminar (10am to 2pm) will take place at Howes Percival’s Leicester offices.

Event details

Date & time

Tuesday 26th April, 10:00am – 2:00pm

Location

Howes Percival LLP, 3 The Osiers Business Centre, Leicester, LE19 1DX

Cost

Free

Book your place at the free seminar >

The perfect supplier audit: A Q&A with supply chain industry expert

The development or use of audit systems ensures that your team can regularly check the compliance of suppliers, the provision of resources, and the ability to continue serving your company in the future. Reminders and records of previous audits are invaluable when dealing with a large supply chain.

Many companies implement auditing when a supplier is underperforming, by which time it is often too late. Additionally, this means suppliers see audits as a negative undertaking, carried out only to find problems in the process.

To find out more about creating the perfect supplier audit, Altius Managing Director Gary Plant answered your most commonly asked questions.

What is the current situation regarding auditing of suppliers and how effectively do organisations handle these?

The term audit, in a non-financial context, is used somewhat loosely to cover a multitude of supplier checks or interventions undertaken by a customer organisation, or their agent. The most commonly used meaning is where the checks are undertaken at the supplier’s site and this is my focus.

There are many examples of large numbers of audits being undertaken in some sectors, particularly where there are safety risks. Why should this be the case? The audit is used as a tool to check the supplier is doing what he is supposed to be doing, i.e.meeting legal requirements, behaving how the customer expects him to, knows what he is doing, acting safely and, most importantly, not causing the customer any problems.

Is there room for improvement?

If the audit finds problems, and many do, what does this mean? A common conclusion is that the supplier is not good enough and he’s told to do better. Sometimes he’s replaced completely. It’s not uncommon for more audits to be commissioned, since the results show that there are problems and they need to be identified and dealt with. Could it be that what the audit is really telling us is:

Best Practice Guide to Supply Chain Compliance Now Available >

Most suppliers want to do a good job and keep their customers happy. We need to make sure we choose these suppliers, make sure they understand what we want (and don’t) and use audit processes to monitor whether or not both parties are getting this right. Once we do get supplier selection, wider assessment and communication right, we can do fewer rather than more audits, which will save both time and money.

What is the key to a successful audit of suppliers and supply chains?

The key to a successful audit is to clearly define its purpose. The famous Pablo Picasso quote “Computers are useless. They can only give you answers”, could be adapted to audits, which could be described as only exposing problems and, therefore, not always constructive. While it’s convenient to blame the supplier’s shortcomings, this is unlikely to make things better.

Where should organisations start, or what should they demand of their audit supplier?

The audit should be undertaken for a specific purpose, for example, to ascertain whether or not the supplier’s operatives are aware of the customers’ requirements with respect to safety. An audit of a contractor could be undertaken to check that their operatives know what the customer’s policies and procedures are with respect to contractors working on their premises.

Without this clarity of purpose, it is likely that the supplier, and indeed the audit provider, will fail to meet the customers’ expectations.

What kind of issues need to be examined?

Any audit should be limited to matters that pose risk to the client’s business, yet they are frequently used unnecessarily, e.g. to ensure effectiveness of a supplier’s quality management system, despite the fact that the quality of the supplier’s products presents no risk to the customer. Audits are too often undertaken because it’s standard policy, without questioning the sense of that policy.

How can this be done effectively, without just relying on what suppliers themselves say?

Audits can confirm that there is evidence that the customer’s requirements have been met. Where that evidence cannot be found, we can’t know whether or not the requirement has been met. What the supplier tells us doesn’t really change that so we can’t be sure we’re safe from the original risk.The supply chain process needs to be adjusted to make sure the evidence is available in future. It could be as simple as making sure the supplier knows we want it.

How far down the supply chain should such audits go?

It could be argued that the ideal scenario is that no audits are done at all because the customer has total confidence in the supply chain process and supplier and doesn’t need to spend any money checking. In the real world, some monitoring is necessary, but it should be effectively targeted as part of a wider compliance framework. This will minimise cost and reduce timescales.

Audits are a valuable monitoring tool for suppliers, but they are expensive. Who should monitor your supplier’s suppliers? Surely they should. If you require them to have effective supplier management in order to fulfil their obligations to you, then they should be able to provide evidence they’ve done so.  Have you made them aware of your requirements?

Best Practice Guide to Supply Chain Compliance Now Available >

If, however, you decide to audit your supplier’s sub-suppliers, in doing so you take away your supplier’s responsibility to do it. If something goes wrong, they will rightfully point out that you audited them and said they were OK.

What are the limitations here, either due to practicalities around working with suppliers or the limitations of the audit providers themselves?

Audits are a tool that will help you understand if your processes for buying-in goods and services are working, that’s all.  They won’t help if you choose the wrong suppliers because of a poor selection process. They won’t help if you fail to enlighten the supplier as to what you do and don’t want from them. They happen very late in your process and are a sample at a point in time and at a single location.  The very best audit service provider will add little value if they’re not given a clear idea of what you are looking for evidence of.

Is there more that can be done?

Audits are, however, invaluable when used in the right circumstances. Use them to find out if your processes have worked, particularly for processes that bring about specific outcomes or protect you from risks associated with purchasing goods and services. If the audit uncovers shortcomings, it may be an indication that your processes didn’t work, rather than a supplier failing. This is an opportunity to examine whether you need to fix the process, rather than doing more audits or blaming suppliers.  Do that and the audit is worth doing.

Is there a need for procurement to work together with other procurement organisations across sectors to put pressure on both auditing organisations and suppliers to improve the quality of audits?

There are nearly always benefits from working together to bring about improvements. I would suggest, however, that if things aren’t improving in your supply chains, it isn’t because you need better audits!  If your audits say everything is fine when it clearly isn’t then you need better audits, but if your audits are uncovering poor suppliers, then you either need better supplier selection procedures and supplier management processes, or you need to examine whether your auditors are asking the right questions.

How else could such audits be made more effective?

Audits are most effective when they are used for their intended purpose. If your freezer is keeping food at +10C, you don’t buy a better thermometer.Get a clear idea of the risks associated with buying in products and services and understand what you will require from suppliers to protect yourself from them. Choose suppliers that are capable of doing what you want.

Make sure they understand what you want, including what will be done or delivered, the behaviour you expect and the evidence you require.  Use audits to see if everything is as you asked. If it isn’t, make improvements for next time and use audits to see if things have improved.  Repeat as necessary!

best_practice_guide_blogbanner_1

Eight critical KPIs for assessing your supply chain performance

After choosing a supplier to carry out the work you require, your attention should shift towards the contract, and what can be done to ensure it is fully executed. Between you and the supplier, you should be: ensuring you both fulfil your expectations of each other, manage the risk and any supply chain vulnerability, and deliver continuous improvement and learnings.

To do this, key performance indicators (KPIs) should be identified at the start, and monitored against on a regular occurrence, to ensure the supplier is performing to the standard you require. Of course, the KPIs you look to monitor against will differ depending upon the supplier’s work.

To give you a head start, here’s some objective KPIs you could look to implement:

1 – Delivery time and completion

For suppliers who will deliver goods to you or your clients, how often are deliveries made on time? How many of these deliveries result in issues, damaged or incorrect goods? The supplier should take the lead in assessing these KPIs on a frequent basis, making sure information and performance are shared in regular meetings.

2 – Level of non-conformance

Whether they’re delivering a product or service, how many times, or what percentage, has the supplier’s work resulted in something that doesn’t meet your standards. As well as recording the incidences, this KPI should also focus on what specifically has gone wrong, and what can be done to eradicate it in the future.

Non-conformance can also be attached to the controls and restraints you put in place as part of managing your suppliers. If you’ve expressed that an electrician should not enter the second floor, of the building for example, this should be recorded and fed back to the supplier’s operational team.

3 – Invoice accuracy

While financial details should have been organised from the start of on-boarding your new suppliers, the accuracy of invoices of suppliers that work with you frequently, could become a KPI to track. With so much on your plate already, the last thing you want to be doing at the end of the financial year is to be chasing suppliers for their final invoice of the year.

Best Practice Guide to Supply Chain Compliance Now Available >

Delays in invoicing, as well as inaccuracies in the amounts, can lead to disruption not just in your supply chain, but in your whole organisation too.

4 – Project milestones

One-off or infrequent suppliers would find project milestones more useful. No matter what the project, time and cost are always two of the biggest KPIs that supply managers need to keep track of.

There’s always going to be incidences that increase the money or time spent on a project, but by clearly planning and talking through the project with your suppliers, you can hold them accountable too.

5 – Customer complaints/returns

Probably one of the biggest frustrations for a supply chain manager is discovering that a customer has complained about the quality of product or service from one of your suppliers. As well as feeling let down by your supplier, the fact that your business was the ‘face’ of the purchase makes it an even hard pill to swallow.

Of course, there are always going to be complaints and returns for some products, it is a case of assessing what the natural amount of comebacks you may face, based upon the number of products or services you sell. This also provides a great learning curve for your relationship with your new supplier to eradicate problems as early on as possible.

6 – Flexibility

The ability for suppliers to change depending on yours or your customer’s needs is essential in a fast-moving economy. Can your supplier meet your two-week deadline change? Are they able to be flexible enough to change their logistics 24 hours later? Whatever your requirements, flexibility may be a KPI that suits you and some suppliers.

7 – Levels of waste

At a time when corporate social responsibility is a big part of a business’ goals, the pressure on large organisations to control what their supply chain does too is increasing. Recycling, landfill disposal, carbon footprint and CO2 emissions are just four areas that you may wish to track and monitor your suppliers on.

8 – Communication and compliance

As well as attending monthly meetings, or updating you on the latest project, you could monitor your suppliers based on their compliance feedback. Have they given you the latest version of their insurance when their last policy expired? How long have they taken to get back to you on your compliance questions? Do they still hold the industry certifications they need to undertake work?

If your suppliers fail to meet the basics of giving you compliance information, who knows what they may be hiding when it comes to the physical work you signed them up for in the process. This is why continual improvement, communication and relationships with your suppliers are important.

The right KPIs for the right suppliers

From these eight examples above, you will understand that key performance indicators have to be chosen in line with what the supplier will do for you. While you will always expect that suppliers will perform at 100% all of the time, this is un-sustainable and a suitable target KPI should be set between the two of you to deliver a quality service while giving room for continuous improvement.

To find out more about KPIs and how they can help to increase the performance of you supply chain, download our free guide, ‘Introduction to Supply Chain Compliance Best Practice’.

Best practice guide to supply chain compliance

Five compliance techniques that guarantee poor supply chain operations

Have you got ambitions of creating an inefficient and broken supply chain? Of course not. But the actions that some supply chain managers still undertake mean they’re putting their business, suppliers and contractors at risk too.

Whether you’re simply time poor to complete all the tasks, or feel like your processes need updating, here’s five compliance techniques that you should try and avoid at all cost unless you want to guarantee poor supply chain operations.

Supplier database on a spreadsheet

A spreadsheet to hold all of your supplier information just isn’t good enough anymore. As well as being harder to use and more chance of duplications and mistakes, it is also riskier to keep vital information in a document – no matter if its password protected or not.

Larger organisations that have more than one spreadsheet of supplier information can also suffer too. As well as taking more time to find the right information, the lack of standardisation amongst the several spreadsheets can cause confusion and potential mistakes internally too.

Not outlining requirements correctly

Outlining and agreeing on requirements with suppliers and contractors is often underrated. Yes, agreeing what you want the supplier or contractor to do is important, but there are additional requirements that you need to be clear on.

Health and safety, of course, is a requirement that requires additional outlining, especially if the work you require is at height. As well as outlining these requirements, you should also make note of the things you don’twant to happen as well.

For example, if your premises is nearby a school, work on repairing the roof before and after school hours as children are walking home may be restricted to avoid injuries or incidences.

Gathering unnecessary contractor information

Giving every contractor the same questionnaire to fill out their information is time-consuming and completely unnecessary. Asking contractors for their gas certifications, despite only being the company’s window cleaners is of no use to anyone.

Best Practice Guide to Supply Chain Compliance Now Available >

Instead, you should be tailoring your information to the new contractor you’re going to be working with. Window cleaners may not need to show certifications to work on gas maintenance, but they do need to draw upon insurance and certifications for working at heights – so collect this information instead.

Irregular supplier audits

There is no ‘set’ time to audit a supplier, although annual checks are a good place to start. A multi-layered approach with both desktop and on-site audits make sure you’re suppliers are both in check and in good health too.

Without such regularity, information such as financial, certifications and insurance documents could have expired – leaving you and your supply chain exposed to risks the supplier brings.

No new supplier references of certification checks

For new suppliers, you should be thoroughly checking their financial and insurance information already, but to assess their capability of carrying out the work they want, extra checks are required.

For specialist suppliers or contractors, certifications of their expertise such as an electrician, should be sought and kept on file (although spreadsheets aren’t the greatest to keep this kind of information on them!). Together with references from other organisations, certifications can offer a piece of mind that they will deliver the quality of work you desire.

Implementing supply chain best practice

With so little time, and so many suppliers and contractors to take care of, implementing supply chain best practice can be difficult. However, Altius have created a free eBook entitled ‘Introduction to Supply Chain Compliance Best Practice’ so you can get the basics in place.

Download your free eBook and see how you can better assess the capability of new suppliers, improve your supplier management and implement KPIs to improve supplier performance. Download your free Introduction to Supply Chain Compliance Best Practice here.

Best practice guide to supply chain compliance

7 common frustrations every supply chain manager would recognise

There are days when being a supply chain manager can test your patience and question your career decision! Thankfully, these moments only last a short period of time and are completely normal within the industry. Here’s 7 common frustrations that you will probably recognise already…

Not enough time in the day to do anything you wanted to do

via GIPHY

Ever feel like the day is running away from you, leaving you with the same pile of work as you had at the start of the day? As the supply chain manager for your organisation, jobs such as ‘monitoring your suppliers’ and ‘dealing with compliance’ often fall to the bottom of your list. If only there were a clock that counted backwards some days.

That time of year when you need to review all of your supplier compliance documentation

via GIPHY

Sifting through reams of documentation is hard enough, but when those documents are compliance related and require 100% of your focus, it can seem like a never-ending task. Supplier insurance certifications, financial details and contracts all need checking with a fine-tooth comb to ensure you’re fully protected, not to mention H&S, CSR, AB&C and the modern slavery act.

It is also important that you have appropriate continuous monitoring of compliance information, as information could go out of date as soon as you’ve assessed it!

Every time you finally approve a supplier

via GIPHY

The paperwork may have taken you all night to complete, but thankfully, you have a supplier you can approve for work at the end of it! Just don’t think about the five others you have to approve before the end of the month.

You find out one of your sub-contractors didn’t follow the site rules

via GIPHY

Can you believe it?! After speaking to your sub-contractor on numerous occasions AND agreeing the work they will do, they still go and break the site rules. It’s inevitable that some sub-contractors will go above and beyond their remit, for all the wrong reasons, and that is why implementing controls and restraints to manage compliance is so important.

When one of your suppliers promises they have the right insurance but can’t provide the policy document

via GIPHY

How many suppliers have tried to get away with not submitting the right insurance details? Of course, insurance is so important to protect you, your suppliers and the rest of your supply chain too – agreeing to work without insurance is dangerous, no matter how urgent the job is.

Every time you find a non-compliant supplier

via GIPHY

Desktop and on-site audits are a great way to keep your suppliers compliant, but failure to do this often enough can lead to serious problems. Most situations can be retrieved with non-compliant suppliers, but if the situation continues to get worse, you just know that supplier has to end up in the bin.

Waiting for sub-contractors to finish the job they said they’d finish two weeks ago

via GIPHY

Despite setting out the job to your sub-contractor and agreeing on a date on when it will be finished, how many times have you been left waiting for the job to finish? Delays in completing jobs are common, especially when the unexpected happens. But for sub-contractors that take longer than expected, and ultimately fail to hit their KPIs, there isn’t a supply chain manager in the world whose patience wouldn’t be tested.

Making your job simpler

There will always be frustrations that you will feel as a ‘middle man’ in your organisation, but by implementing the best practice procedures for managing a supply chain, a lot of your frustrations can be taken away.

Download our free Introduction to Supply Chain Compliance Best Practice and discover how you can:

Click here to find out more and download your free copy.

Best practice guide to supply chain compliance

Why on-site supplier audits every 12 months is not enough

On-site supplier audits play a significant role in the management of a supply chain. Often viewed negatively by suppliers and contractors, audits can not only identify potential compliance issues, but they can also help to improve performance and efficiency.

Following the risk profiling of the suppliers in your supply chain, you will understand how valuable and how much risk a specific supplier can bring to your business. Using this information, you should proactively look to undertake supplier audits on a more regular basis than just every 12 months – and here’s a few reasons to support this argument.

The cost of poor supplier quality

Many businesses do not track or measure the cost of poor supplier quality (COPQ) that is attributed directly to their suppliers. In some cases, these costs could amount to over 10% of an organisations overall revenue.

By carrying out audits on a more regular basis than every 12 months, you will be able to discover whether equipment is being used that is constrained and, therefore, reduce the overall outputs of the production line. You’ll also be on top of any recall or warranty expenses due to poor quality of products – which in the long term could save you money and sustain your already high reputation.

Supplier performance monitoring

If you’re only auditing your suppliers every 12 months, how can you be sure that they are always performing to the standards that you require? In order to always be aware of how your suppliers are doing, it is recommended to keep supplier scorecards which will use KPIs (Key Performance Indicators) to rank a suppliers relative performance within the supply base.

Best Practice Guide to Supply Chain Compliance Now Available >

As an example, leading manufacturers use the following key operational metrics to track their supplier performance:

Over time, by keeping an eye on these KPIs, you will no doubt see an improvement in the quality of a supplier and your supply chain as a whole.  By monitoring these indicators more often than every 12 months, your supply chain will become more efficient and more effective, which is of course what every supply chain manager wants.

Implementation of corrective action

Once problems have been identified through regular audits and monitoring, one of the first steps that you should be taken is to investigate and identify the cause of the problem, as well as suggested corrective actions. Once approved, the changes can be implemented and tracked using KPIs to monitor effect and performance.

Corrective actions can include anything from amendments to a documented procedure, the training of an employee, or even an update in manufacturing or production equipment.

Through the implementation of such corrective actions, you’re ensuring that your suppliers are always maintaining the highest standards of working and, in turn, you’ll be improving your business relationships with your suppliers too.

Supply chain best practice

Audits are not only a tool that can be used to keep an eye on the performance of your suppliers, but also how everything is working as a whole. Any findings resulting from an audit can highlight opportunities to make improvements, that may not be the responsibility of the supplier, but the client instead. Regular audits enable a business to iron out any potential issues and improve the outcomes from suppliers.

We know its sometimes a struggle to even carry out the bare minimum of auditing across your supply chain, but by implementing supply chain best practice, using a layered approach (a mixture of desktop and on-site audits) and completing smarter auditing, you can negate any potential risks and see supplier performances increase too.

To find out how you can be smarter in your supply chain auditing, download our free guide, An Introduction to Supply Chain Compliance Best Practice today.

Best practice guide to supply chain compliance

How to achieve approved suppliers in three simple steps

Supplier management is the key to having an effective supply chain – one that is optimised and can be held accountable. Your suppliers sit at the heart of all of your organisation’s activities and processes and they also ensure that a company can run as it should. In order to do this effectively, though, you should take the time to ensure your suppliers are approved.

In Why Supplier Management should be central to your procurement thinking, Peter Smith stated “it is essential to ensure suppliers meet immediate needs and to enable performance and value improvement activities to be pursued through the course of the contractual relationship. That requires the right data of course – which must be relevant and usable.”

What can you do to achieve approved suppliers? We explain in three simple steps:

Information

While this might seem like an obvious step, it’s often one that can be missed or rushed in the process of signing a new supplier. You must spend time and resource researching and gathering information on a potential supplier.

Best Practice Guide to Supply Chain Compliance Now Available >

Information is needed to establish whether or not a supplier has the capability to carry out the service that they are proposing, or to deliver their product to the standards that are required of the client.

This includes checking that the supplier:

This information will be vital to ensuring that the job is carried out to your high standards.

Top tip:

Use a process and a system that provides this information to you and keeps it up-to-date.  Why make work for yourself?

Verification

Introducing any new supplier to your supply chain will carry an element of risk that can be mitigated by following this verification step.

Taking the claims of a supplier on face value, shouldn’t be adhered to as the best practice. You should always work to verify that what they suggest their capabilities are, are facts. Failing to assess the supplier could leave you in a vulnerable position further down the line if a suppliers claims prove to be false.

While we suggest that this step is essential in approving your suppliers, in some cases when working in specific industries verifying information provided by a supplier is a legal requirement. Checks that are carried out on supplier information should always be evidence based and may involve verification with certification bodies or insurance companies.

Top tip:

Use a process and system that adapts to the supplier and what they do.  After all a one size-fits-all process may not fit anyone.

Authorisation

Authorisation is the process of approving a supplier to deliver work for your company.

Once a supplier has demonstrated that they can provide the products or services that they claim to offer, your next step to share with the supplier and their employees, exactly the kind of work that they have been verified to carry out – in granular detail.

This part of the process will also include providing the supplier with any site access, permits or documentation that they will need in order to begin work on the job that they have been verified for.

Authorisation will ensure that you don’t find yourself in a situation where work is completed outside of a client’s verified scope, impacting on the reputation of your business and your supply chain.

Top tip:

Don’t let your good work go to waste by asking, or allowing, the supplier to do work outside of the scope you’ve checked them for.

Best practice

Managing a supply chain can be a complex undertaking so it helps if you can confidently understand the best practices of supply chain compliance. This doesn’t have to be as daunting as it sounds.

From assessing supplier capability through to monitoring your KPI’s, our guide, the Introduction to Supply Chain Compliance Best Practice explains how you could use compliance management to improve your overall supplier performance and mitigate unnecessary risk.

Best practice guide to supply chain compliance

10 pieces of supplier information you should know in under 60 seconds

How well do you know your suppliers?

I can imagine that right now you’re thinking one of two things – either, that you could answer every question that you were asked on all of your suppliers. Or, that you’re uncertain about your supplier’s information, and would feel a little stressed should you have to recall any in under 60 seconds.

Whichever side you’re leaning more towards, this blog is about to put you to the test…

Here are the top 10 pieces of supplier information you should know (or have access to) in under 60 seconds:

1. Company information

A little basic yes – but you should be able to state easily the following:

…as comfortably as you recite your ABC’s.

2. Management team

This is also key – if something bad was to happen, who is it you’re going to be dealing with. Do you know what their name is, what their job role is, or what their responsibilities are? Make sure that you do.

3. Compliance information

When authorising and approving your suppliers, you will have obtained various evidence to ensure that their claims ‘check out’. Keep track of where you keep these – you never know when they’ll be useful to you.

Best Practice Guide to Supply Chain Compliance Now Available >

4. Contact details

Again, this might seem like an obvious piece of information that you’ll need to know – while it isn’t necessary for you to remember these details; it is vital to have them stored somewhere that is easily accessible – and always ensure they’re kept up to date.

5. Company profile

In some situations, it might be essential for you to know a concise description of your supplier. This could include their history, quality of their resources, current or anticipated performance and details of their reputation.

6. Insurance

This is imperative. Different suppliers will need different levels of coverage depending on the work that they will be carrying out for you. Always make sure that these documents are up to date and cover the supplier for their work.

7. Health and safety

Similar to insurance documents, this is also critical. Certain suppliers will have specified health and safety procedures that they have to follow at all times – you should know exactly what those are.

8. Financial information

You should always know the financial situation of your suppliers. Problems with cash flow could lead to problems or delays in the service or product that they provide. Checking the credit score of new suppliers and contractors is essential to negating risk that a poor financial company may bring.

9. Quality management

It wouldn’t be realistic for you to check the quality of every product that goes out to the client from your suppliers. It is integral that you know their quality management procedures inside and out, so you can be assured nothing will reach your client without being the highest quality.

If something bad were to happen, it would be easier for you to pinpoint where in the process it went wrong.

10. Products and services

While this might be an obvious one – knowing the products and services that your suppliers provide should be something that you remember. Just knowing the basic areas that they work in isn’t enough, you should have access to details of their procedures and product range, should something go wrong.

So, how do you think that you would do reciting (or finding) these pieces of supplier information in under 60 seconds? Why not put yourself to the test, choose a supplier and see how far you get – then identify the areas that you need to improve on.

Gaining supplier information fast could play an imperative role in how quickly your company could react in an emergency, so make sure that you take the time to get to know your supply chain and your individual suppliers.

Supply chain best practices

Knowing your suppliers is one thing, but understanding the best ways to manage your supply chain compliance is another. Download our guide, An Introduction to Supply Chain Compliance Best Practice and learn how to assess the capability of your suppliers, monitor their performance, and more.

Best practice guide to supply chain compliance

Recent Posts