Critical Suppliers which will not allow us to audit them

[anderson2015]

Hello again


I am in the process out developing the supplier audit schedule for 2015, however some suppliers that we deem critical are un willing in terms of allowing us to audit them.


I believe they allowed a representative to visit them whilst in the new supplier development stage but are now somewhat reluctant to allow us to audit them.


Given it is stated that critical suppliers must be audited and non critical suppliers only need "reviewed" how would API treat this in terms of a Non Conformance and what can be done other than switching suppliers?


For information - all 3 suppliers that will not allow us to audit are based in Italy.

 

[Wes Bucey]

Hello again


I am in the process out developing the supplier audit schedule for 2015, however some suppliers that we deem critical are un willing in terms of allowing us to audit them.


I believe they allowed a representative to visit them whilst in the new supplier development stage but are now somewhat reluctant to allow us to audit them.


Given it is stated that critical suppliers must be audited and non critical suppliers only need "reviewed" how would API treat this in terms of a Non Conformance and what can be done other than switching suppliers?


For information - all 3 suppliers that will not allow us to audit are based in Italy.

Is someone on your audit team really eager to visit Italy and take in some tourist sites as well as supplier sites?

I'm struck by your choice of words: "now somewhat reluctant to allow us to audit them" is pretty vague.

Has each supplier said, "You may NOT visit our site. You may not examine any of our documents or records. We would rather not sell to you if an audit is a condition of your purchase contract."?

How do your purchase contracts currently read regarding audits? Are these suppliers critical because they are sole source (meaning no other organization in the whole world can make or sell this product)?

Perhaps the nature and scope of your organization's audit practices are too disruptive to the supplier to the point there is no profit in selling to your organization after the hard and soft costs of hosting an audit are calculated.

Are the products purchased custom made to your company's specifications or off-the-shelf?

Lots of questions remain to be answered, but suffice to say, the devil is in the details. We probably need to hear the supplier's side of the story before a resolution can be made to the problem you perceive.

 

[bobdoering]

Best bet is to have it in the boilerplate of the purchase order. Problem solved.

 

[anderson2015]

Is someone on your audit team really eager to visit Italy and take in some tourist sites as well as supplier sites?

I'm struck by your choice of words: "now somewhat reluctant to allow us to audit them" is pretty vague.

Has each supplier said, "You may NOT visit our site. You may not examine any of our documents or records. We would rather not sell to you if an audit is a condition of your purchase contract."?

How do your purchase contracts currently read regarding audits? Are these suppliers critical because they are sole source (meaning no other organization in the whole world can make or sell this product)?

Perhaps the nature and scope of your organization's audit practices are too disruptive to the supplier to the point there is no profit in selling to your organization after the hard and soft costs of hosting an audit are calculated.

Are the products purchased custom made to your company's specifications or off-the-shelf?

Lots of questions remain to be answered, but suffice to say, the devil is in the details. We probably need to hear the supplier's side of the story before a resolution can be made to the problem you perceive.

The chance to take in some tourist sites would be great


We send out a supplier questionnaire to all suppliers, on this document it asks "would you allow a member of our QMS to audit your company" all 3 of the Italian suppliers stated no as the answer.


The suppliers are critical as some of them are our only supplier (in some cases it may be a case of us simply not yet finding an alternative/secondary supplier) and they provide main inputs to our final product (key items) - we produce high pressure hoses so they are suppliers or rubber, fabric etc


I have not yet read through the purchase contracts, however the business is family owned and relatively new - if I was to take a guess I would say they do not contain info related to auditing.

 

[Ninja]

Having it in the boilerplate on your PO or Contract gives you another way to push for an audit...but may not increase your chance of success.

If they are your sole source, and they say "Nice contract language...you still can't come" you remain in your current position.
Having it in writing, and having it actually happen don't always meet in the middle.

If you cannot find agreement for an on-site audit...it may be time to get creative in two areas:

1. What is the minimum to fulfill the requirement for audit?
Not that this is the goal...but it may be all you have available.
Is it really required to do an on-site audit, or will a remote audit be adequate?
Adequate to know what they are doing and build your confidence...maybe not. Adequate to fulfill your responsibility on paper...maybe so.

2. Find another supplier for the parts.

There have been other threads here on the Cove discussing charging customers for performing audits...this is the same thing. You buy from me, but I don't make enough money on your business to put up with your auditors...

Wes listed a number of questions above...most centered around "Why?"

FWIW: I wouldn't have "May we visit?" on your questionaire. If you have to visit, why ask if you can? It just gives an easy opportunity to say "No" when it is clearly an answer you don't want to hear.
Perhaps ask instead "What month should we schedule an on-site audit?"

 

[pkost]

who owns the relationship with these suppliers? Do you have supply manager, or is it the production team?.....If you haven't already, take the conversation outside of the technical/quality sphere, don't just involve the quality team, use your buyers and their sales team to influence whoever is saying no

Try to understand why they don't want to audit:
- are you requesting audits too regularly...can you change this cycle?.
- Are all of their customers requiring audits so they spend more of their time in audits than actual production?...could you collaborate with some of their other customers to carry out joint audits?

You suggest they may not have experienced audits before and may not have the required documentation; in that case is the supplier important enough for you to work closely with and develop their systems to something you are happy with? A collaborative approach may get things moving

 

[anderson2015]

who owns the relationship with these suppliers? Do you have supply manager, or is it the production team?.....If you haven't already, take the conversation outside of the technical/quality sphere, don't just involve the quality team, use your buyers and their sales team to influence whoever is saying no

Try to understand why they don't want to audit:
- are you requesting audits too regularly...can you change this cycle?.
- Are all of their customers requiring audits so they spend more of their time in audits than actual production?...could you collaborate with some of their other customers to carry out joint audits?

You suggest they may not have experienced audits before and may not have the required documentation; in that case is the supplier important enough for you to work closely with and develop their systems to something you are happy with? A collaborative approach may get things moving

Again this is something I will have to investigate further, however my understanding I that the planner/purchasing deal mainly with suppliers.


I like the ideas you have suggested in terms of working closely with the suppliers (if they allow it) - as I am sure it would be worthwhile given the amount we spend on material from them.


I have done something similar with UK based suppliers and it worked quite well


We don't really have any issues with product/services and we only request audits once per year so I wouldn't imagine it would be anything (from that perspective) for them to be too concerned about

 

[iamtroll]

Unfortunately, it really comes down to dollars. Even though they may be your critical sole source, you may not be a large enough customer of theirs to matter to them (I don't know your relationship). In fact as a supplier of largely varying size customers, we often discourage smaller customers from auditing us and if they haven't done any business with us recently we do refuse to entertain an on site audit. It's like anything else in business you have to look at the cost and benefits of any activity. Auditing can tie up a lot of resources that you may not be willing to give up if the payback is not there. You may need to do phone audits and have them fill out self evaluations and then justify it by cost and distance as not being able to do an on site audit.

 

[Michael_M]

We send out a supplier questionnaire to all suppliers, on this document it asks "would you allow a member of our QMS to audit your company" all 3 of the Italian suppliers stated no as the answer.

If it is a requirement, why are you asking for permission on the questionnaire?

I agree with the above posts that this should be part of your contracts but now you have put yourself into a bit of a bind. You ask if you can come visit and they said 'no', if you force the issue and go visit anyway, your basically saying that the questionnaire is meaningless.

 

[Ninja]

We don't really have any issues with product/services and we only request audits once per year so I wouldn't imagine it would be anything (from that perspective) for them to be too concerned about

Be careful in your expectations...

Once a year audits still cost the auditee money. If nothing else, it costs in the form of labor spent doing something other than generating profit.

I get once a year audits from >10 different customers. It doesn't feel like once a year...it feels like 10+ times a year.
It used to be more, but I have started delaying and diverting those that I could. From each customer's side, it probably looks to them like what you are describing.

Once a year does not seem like much to the person who is responsible for auditing...but it is a drain on the site being audited.
Make sure you understand it from their side.