Quality should never be seen as an accident. It should be envisioned as an intelligent and proactive effort. Poor quality, unsafe working conditions and or ignoring or non-compliance with regulations will lead to business disruption, financial loss, lawsuits and damage to the brand image of an organization.
The vehicle for this crisis can originate with any step in the supply chain process, from design to raw materials to production or transportation. Most of the time the major cause of poor quality can be traced to either inferior raw materials or the lack of design standards. In some cases in recent times reputations have been ruined not by the former but by lack of social responsibility.
Policies and procedures of quality management of suppliers must be aligned to the company standards who are selling the product. Failures in the supply chain are passed down the line to other firms whose business is to markets these products. These breakdowns can result in consumer dissatisfaction, regulatory issues and public criticism. Let us remind ourselves of the tainted toothpaste or the lead paint in toys situations that damaged a company’s image.
There are some vendors who are meeting this opportunity with stricter client quality standards set forth by the International Organization for Standardization (ISO), the American National Standards Institute (ANSI and the American Society for Quality (ASQ). In addition, new security standards will have to be adhered to by transportation, shipping and logistics firms.
To ensure vendor observance to the required quality management standards must conduct supply chain audits. This validation process involves on-site vendor and or supplier audits which will compare actual to required policy standards. These audits will identify areas of performance disparity and opportunities for improvement. A constant vigil for quality improvement will reduce the risk of short and long term costly and embarrassing failures.
Internal auditors are not the proper route to take under these circumstances. Independent management system auditors have the skills, geographic exposure and audit experience to effectively state audit protocols, aid in the planning and scheduling process and to guarantee audit goals of company are met. Independent auditors bring an unbiased viewpoint and are usually up to date with changes in the international standards that need to be considered.
In order for these audits to prove successful several criteria must be met. They are the following:
- Set forth in detail all necessary activities
- Outline objectives of the audit
- All required personnel are available at the time of and the span of the audit.
- The audit processes and information necessities are understood and agreed upon
Fundamental to any audit criteria and deciding if there is a need for such improvement or to add controls are the gravity of a given quality management failure and the part of management to decide the potential consequences with regard to consumers, shareholders and or regulators.
Many of these independent auditors will also encourage companies to broaden the scope of the audits to include environmental and health and safety management systems (ISO 14001) and (OHSA 18001). These establish explicit requirements in the environment and safety guidelines leading to identification of legal issues that a firm may be faced with. Likewise, organizations today are faced with and need to consider the social accountability international standards (SA8000), faced with the responsibility of improving working conditions around the world.
The closing stage of an audit requires close attention. This is where the findings are converted into corrective action. The resulting audit report considers the degree of conformity with the audit objectives and the performance gap and recommends improvements, business relationship changes, “root cause” investigation. All of these will lead to corrective action to resolve digression from the proper course.
As globalization will only continue companies must protect their supply chains by screening the quality management programs of their vendors. It matters little if companies are dealing with a few or hundreds of vendors, management audits require clear-cut planning with experienced personnel to be effective. More than ever before, firms need to grasp the quality management systems of their suppliers, the scope of the involved risks and the controls to be put in place to protect against quality failure and brand damage.
Stuart Rosenberg – sturosenberg24@gmail.com
Stuart Rosenberg is an accomplished Supply Chain Management and Operations professional with a number of years experience using outstanding communication and leadership skills to coach, mentor and motivate varied professionals in challenging environments. As the founder, president and chief consultant of First Choice Supply Chain his reputation as a savvy Supply Chain leader is beyond reproach for delivering resourceful business strategies and customer focused solutions which improve margins.
With his work with several worldwide corporations – Johnson & Johnson, Cadbury, Reckitt Benckiser and Linde Gas, N. A. his far reaching experience in launching, managing and mentoring new programs and strategies resulted in greater customer confidence and improved business results.
Mr. Rosenberg is also the author of The Global Supply Chain and Risk Management.
The heightened intensity of global competition has increased the necessity of manufacturing and distribution organizations to continuously improve production, product quality, cost, and delivery. Supply Chain professionals must be knowledgeable about the relevance of supply chain concepts—adapt supply chain to customer needs, customize logistics networks, align demand planning across the entire supply chain, and differentiate products close to customers.
The goal of The Global Supply Chain and Risk Management is to assist in meeting these challenges as to the education of many supply chain practitioners, the implementation of formal supply chain contingency and control systems, and the continued edification in recent global developments for all those working in the field.
The Global Supply Chain and Risk Management is written for two groups, those who are preparing for a career in supply chain and for those professionals seeking to improve their proficiency. The book will teach the best practices, common-sense, high-tech and analytical solutions for the entire global supply chain—customer service to inventory planning to transportation to warehousing. The four major parts address the financial implications.