How to Audit for Distribution Company

[jasminphyu]

Dear Members,

when auditor want to audit the Distribution company (like clothes, retail convenience store, etc...) , they do not have any production. They buy items from suppliers and send to client's retail outlet, how auditor can audit about below clauses.

7.1 Planning of Product Realization
7.5.1 Production Control
7.5.2 Production validation
7.5.3 Customer Property
8.2.3 Monitor and Measurement of process
8.2.4 Monitor and Measurement of product

I do appreciate for all your advices.

Jasmin

[Stijloor]

In Reply to Parent Post by jasminphyu

Dear Members,

when auditor want to audit the Distribution company (like clothes, retail convenience store, etc...) , they do not have any production. They buy items from suppliers and send to client's retail outlet, how auditor can audit about below clauses.

7.1 Planning of Product Realization
7.5.1 Production Control
7.5.2 Production validation
7.5.3 Customer Property
8.2.3 Monitor and Measurement of process
8.2.4 Monitor and Measurement of product

I do appreciate for all your advices.

Jasmin

Can someone clarify this for Jasmin?

Thank you!!

Stijloor.

[Ka Pilo]

In Reply to Parent Post by jasminphyu

Dear Members,

when auditor want to audit the Distribution company (like clothes, retail convenience store, etc...) , they do not have any production. They buy items from suppliers and send to client's retail outlet, how auditor can audit about below clauses.

7.1 Planning of Product Realization

Make a plan and develop the processes needed for product realization. This planning of service provision is consistent with the requirements of the other processes of the your QMS. Need to define your objectives and the requirements for the product or service. Need to establish processes, documents and provide needed resources e.g. delivery vehicles etc. Need required verification, validation, monitoring and inspection and test activities specific to the product or service and the criteria for acceptance. Need records needed to provide evidence that the realization processes and resulting service or product fulfills requirements. The output of this planning is documented in the form of quality plan.

In Reply to Parent Post by jasminphyu

7.5.1 Production Control

You need to control let's take for example the following:
In and out of items
Delivery scheduling
And so on

In Reply to Parent Post by jasminphyu

7.5.2 Production validation

You need to assess if your delivery personnel and delivery vehicles are capable of to delivery of being effective.

In Reply to Parent Post by jasminphyu

7.5.3 Customer Property

Taking care of any property owned by your customer and report any problem concerning said property.

In Reply to Parent Post by jasminphyu

8.2.3 Monitor and Measurement of process

You need to conduct a planned sequence of observations or measurements to assess whether your processes are operating as intended

In Reply to Parent Post by jasminphyu

8.2.4 Monitor and Measurement of product

You need to conduct a planned sequence of observations or measurements to assess whether your products are delivered as intended

[JaneB]

Yes, Ka Pilo has given you good advice.

I know the term 'Product Realization' is rather a mouthful, and I also know some of the terms are hard to translate into a non-production environment... like 'production control' for example.

Think of it this way: it's all the things the company does in order to 'do its business'. The business is distribution. You/they have probably already done the 'planning' needed for that when the business was set up in the first place, and then along the way as things changed: eg, perhaps you looked for new/different products to distribute. You didn't just buy a bunch of stuff and then look blankly around saying 'gosh, what do we have to in order to get this stuff to our customers...' Did you?

Production control? Yes, controlling inventory- stock in, stock out, controlling delivery etc.

[adickerson]

I ran a Distribution company so I can give you some ideas of what we used.

7.1 Planning of Product Realization
What forms do you use?
Do you use pick lists?
What is the design of your packing list, BOL, or invoice?
What label formats will you use and what code specifications?
Do you need master skid label templates?
What is your lead time to get more product?
How are orders made?
How high can you stack products?
Do you need fire/safety equipment?
Will you use gas or electric lift trucks?
What is the product flow and movement?

7.5.1 Production Control
How to you put product away, FIFO?
How do you decide what shipping method to use?
How do you stage product for shipment?
How do you avoid mixing up boxes?
How do you package materials?
Do you need to worry about IPPC skids?
How do you ensure the saftey of the product?
How do you handle shrinkage or loss?
Do you have any hazardous materials?

7.5.2 Production validation
When did the order need to go out vs when did it go out?
Do the delivery times given by transport companies match performance?
Did the product on the paperwork match what was going out the door?
Do you verify the quality of product coming in/out the door - damage?
Do you do any onsite repacks?

7.5.3 Customer Property
You may not have any. We had returnable bins so we made a program to monitor how many we had in stock (inventory) vs what we shipped to make sure we did not have any missing bins. That also let us know when we needed to request more bins because some times we did not get as many in as were going out.

8.2.3 Monitor and Measurement of process
What is your propane use and cost?
What is the up-time for lift trucks?
Do you do inventory cycle counts?
Do your barcodes work or do they get scuffed up?

8.2.4 Monitor and Measurement of product
Do you monitor tracking/pro numbers?
How often do you "turn" product?
Do you do Cycle Counts to verify inventory?
What is the estimated weight VS actual weight?
What is the total value of inventory for insurance purposes?

Depending on how you do things the questions could float from one category to the next depending on hows you run your business and interpret the standard but that should give you a good start.

I could go on but the basic idea is that your product is "adequate storage free from damage", "preparing a shipment", and "shipping the right product, to the right place, at the right time".

[jasminphyu]

Dear Ka Pilo, adckerson, JaneB

Thank a lot for helping with your good advice.

Jasmin

[mdemirer]

Hi,
I have some doubts concerning to audit transport companies. We have some problems with our transport company and we want to make a visit about this issue. On the other hand, we have no system to audit this kind of companies which we buy service.
Is there any requirement in TS16949 or ISO9001 to audit companies (like supplier audit) which are giving transportation service?


thanks

[ChrissieO]

In Reply to Parent Post by mdemirer

Hi,
I have some doubts concerning to audit transport companies. We have some problems with our transport company and we want to make a visit about this issue. On the other hand, we have no system to audit this kind of companies which we buy service.
Is there any requirement in TS16949 or ISO9001 to audit companies (like supplier audit) which are giving transportation service?


thanks

I have worked in DIstribution and Logistics for many years and now work solely with 3rd party logistics providers and responsible for 2nd party auditing.

You audit a service industry the same way you audit a manufacturer. Their product is their service. Many of them will be ISO9001 or similar, or they will have a management system of their own. The requirement comes within clause 7.4 of ISO9001 but the additional requirements for TS are even more rigourous.

For example if you are TS certified you should, as per 7.4.1.2 work with your suppliers with the goal of your supplier reaching conformity to TS.

With the increase of delivery to production line and kanban processes the service your transport company provider becomes a critical part of your supply chain. Their ability to deliver OTIF being paramount.

Before the audit, I would look at the KPIs you have set up for your customer and see where their main failings are. Concentrate on these processes. You cannot really audit them to a standard other than your requirements of them but if you feel they are really failing against 9001. I am sure you can relate this back to your Service Level Agreement and KPIs. If however, one of your selection criteria is that they comply to ISO9001 you can then use the clauses of the standard.

Could you be clearer when you say you have no system to audit them.

Chrissie