Monday, October 29, 2012

Surprise Supplier Audits: Good or Bad?

One of the students of a Next Level Purchasing online course asked me, as the instructor, whether I thought that "surprise" supplier audits were a good idea.  The goal of such surprise audits would be to confirm that the supplier is truly meeting its obligations, whether those obligations are things like maintaining the agreed-upon stock levels, keeping up with production schedules, complying with child labor laws, or the like.

So, how did I answer?

I said that conducting surprise supplier audits are definitely a worthy idea.  Too many times, we hear about manufacturers getting bad publicity because of problems in their overseas suppliers' factories and those problems would have been avoided if only there was a little physical oversight by the manufacturers' supply chain teams.

That being said, I consider it best when you specify in the contract that you have the right to conduct surprise supplier audits without notice. You actually want the supplier to expect to be surprised.


Because the ultimate goal is not to catch your supplier doing something wrong, but to persuade your supplier to do the right things...even when you're not watching!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
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