In the supply chain world of quality, code of conduct and ethical compliance the drive to assure and secure has been through the conducting of audits.
For the second and third party auditor organisations, the last 20 years has been a very profitable one. An audit checklist under an arm provides a powerful tool for descending upon a factory and asking the prerequisite questions about quality inspection reports, the contents of the first aid box and where is the factory licence!
However, audits are only a snap shot of an organisations’ compliance. They do have some role in improving operational performance, but essentially an audit identifies a non compliance and raises corrective actions.
Businesses are now well practiced in the art of receiving auditors and their checklists; they have their rapid action teams on standby with libraries of files, procedures, certificates, licences and environmental reports!! This has resulted in in the supply chain improvement of securing and assuring. However, it has to be said its also a ‘cover their bottoms’ activity in the event of a brand attack.
Except for the individual incidents that spring up every now and then, the supply chain breathes easy; the specialist auditors and compliance teams can be left in their little corners to carry on undisturbed with their projects and the factory/merchandising/sourcing teams can carry on with their jobs undisturbed by the nuisance of quality measurements, age certificates and internal factory noise reports!
This level of compliance in the supply chain provides a foundation to move from auditing projects by the specialists to a daily process management by the buyer and vendor teams at all levels of business. Organisations should be moving from handling the auditing snapshots to managing and improving compliance – 365 days of the year.
What should be the elements to a 365 days compliance:
- All parts of the supply team(buyer and supplier) are responsible for compliance, not just the specialist compliance team.
- The management of compliance shifts from an audit project to a maintenance/improvement process
- The compliance requirements should be segmented into levels of priority and regularity to secure resources, capacity and capability.
- The requirements should act as a WHY and not just a tick in checklist!
- The Buying Teams should be actively involved in their vendor compliance – poor purchase planning by the buyers causes quality, ethical, environmental and delivery security problems.
- The specialist team participation in compliance is not on daily operational issues.
- Corrective actions are not separate procedures form the daily operational work and should not be an admin exercise in completing a CAR( corrective action report) form!
- Compliance to quality, social and environmental requirements are seen as contribution to business growth and not a cost.
Factory and supply chain audits are here to stay in the short to medium term as an in depth snapshot on operational performance. The long term goal should be to move away from the audit activity. Compliance is part of the business – making a contribution to an organisation’s competitive advantage, improving the experience, opportunities and skill set of buyers, technicians, factory operators throughout the whole supply chain.
Compliance to quality systems, code of conducts and legal requirements are actually about efficiency and productivity – it is a vital process in business. The days of compliance being a project delegated with relief to a specialist should be numbered.
How can this be developed and achieved? Well hopefully I have been describing this in my previous articles and will continue to do so in future articles. Its Good Business Growth.