The last thing you would ever want to gamble with as a business is your supplier relationships. Since modern businesses experience pressure from the competition, rising customer demands, and rigid regulatory requirements, working with a reliable supplier is essential. Ensuring that you create a strong relationship with the right supplier will reduce friction from this part of your business while increasing your overall productivity.
This is why conducting a supplier audit is essential. Audits can help identify service and product delivery loopholes that can hold your business back. It also ensures that you can comply with industry regulations and avoid the potential expenses that could arise from non-compliance. While there are many ways to perform a supplier qualification audit, outsourcing the task is among the best alternatives.
Here is why you should perform a supplier audits:
Reduce Risks Through a Supplier Qualification Audit
Your business is bound to perform within a risky landscape. The levels of risks it is exposed to will be contingent on the quantity and quality of your suppliers. Some common risks you are likely to face include reputational risk, cost volatility, business continuity risks, safety risks, quality risks, and non-compliance risks.
Understanding the risky landscape of your business makes it easier to reduce the chances of these threats turning into a reality. Supplier audits help you gauge common risks tied to suppliers. If a supplier presents a risk outside your tolerance levels, it could be wise to let them go.
Nurture Better Business Relationships
A great relationship will always develop if your supplier can meet your business interests. For instance, you could want to embrace streamlined operations, long-term profitability, and reduce business costs.
While a supplier might promise that they can deliver to your expectations, the reality could be quite different. A supplier qualification audit ensures you can gauge the supplier's strengths early enough before committing to working with them. In turn, you can rest assured that your business will be in safe hands.
Embrace Alignment in Complying With Standards
Your business needs to comply with a lot of standards, which might include country-specific regulations, industry-specific standards, and internal policies. Most of these standards typically extend to any third-party entities you do business with. For instance, there are a variety of cybersecurity standards that demand working with compliant suppliers.
Scheduling supplier audits give you unfiltered access to the compliance landscape of a supplier. Since the non-compliance of a supplier could easily result in fines and reputational damage for you, ignoring it should be out of the question. You can start by offering suppliers a list of requirements they need to meet before auditing them for meeting the requirements.
Improve Customer Satisfaction Levels
Customer satisfaction levels are highly affected by the reliability of your supplier. For instance, delays in order delivery could easily anger customers. On the other hand, defects and errors that go unnoticed could easily end up in the hands of the customers. In the worst-case scenario, they could attract huge lawsuits against your business.
Assessing your supplier's error-reducing strategies places the control of customer satisfaction rates in your hands. Promoting customer satisfaction can be as easy as raising concerns with suppliers or letting go of those who fail to meet the threshold requirements.
Conducting supplier qualification audits eliminates the guesswork in working with suppliers. Even better, you always have the option of outsourcing the audit to concentrate on other core business needs. Feel free to schedule a demo with Asia Quality Focus to create perfect relationships with suppliers.