What Is a Supplier Audit Management Software (SAMS)?
Supplier Audit Management Software (SAMS) is an electronic system used to manage supplier audits, review suppliers’ reputations, and certify if they are complying with legislation. It’s the best solution to verify your suppliers’ compliance with quality management, safety, and environmental standards required by law.
SAMS is typically used to rapidly optimize the supplier selection process and improve the quality of your suppliers’ products and services, but it can also be used for other areas as well, such as finance and procurement. That’s because supplier audits are an important part of quality management, and SAMS is necessary to ensure that the customer's products have been produced according to industry standards.
A trusted supplier audit software also helps you become a strategic audit leader and compels your company supplier to deliver high-quality standards that are defensible to regulators. It’s also used to improve customer satisfaction and reduce costs by minimizing errors in production and non-compliance.
Not only that, supplier audit management software helps companies establish executive confidence for their shareholders by:
- Speeding up the process of managing audits by gathering information from multiple sources, then storing it in one central database for better transparency and easy retrieval.
- Empowering inspectors to deploy agile end-to-end audits from anywhere, at any time, even offline.
- Reducing company overhead costs by rapidly identifying the risk of non-compliance penalties for faster company growth.
- Eliminating difficult, time-consuming analog audits such as via phone or email that are prone to human error and miscommunication between parties involved in the audit process.
- Accelerating efficiency in workflows and control framework by centralizing the audit management system and scheduling audits in advance.
- Creating rigorous reports on supplier audits with data that is defensible to compliance auditors and regulatory bodies during inspections.
- Improving company and safety management quality by getting more accurate data on which suppliers are problematic in their compliance with regulations.
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Why Do I Need a Supplier Audit Management Software?
Harvard Business Review agrees that strong relationships are essential in building business success. With the help of a supplier audit software, you can drive up your company’s overall health in this direction simply by making sure your supplier relationships are legitimate. You can verify contracts, analytics reports, and supplier ratings faster and devoid of errors.
While analog audits can be effective, it is also prone to human errors. This has led many companies to turn to SAMS as an alternative means of conducting supplier audits that allow them to manage these tasks digitally without risking data breaches and loss.
You also need SAMS to keep track of important events that take place during the audit process. For example, if a supplier has been flagged for a supply chain problem, the software can help you stay on top of this issue. This way, you don't miss any deadlines or other important details that could affect how things play out with this particular supplier over time (or whether they continue working with you at all).
How Do You Audit a Supplier Manager?
You can properly audit a supplier manager by following these guidelines:
1. Conduct pre-audit research
Conducting pre-audit research determines what you need to look for and what questions you need to ask. It enables you to develop an audit plan, which will allow you to be more efficient in the actual audit. It's important that this research is conducted before the audit begins because it will give your audit team a better understanding of what they're looking for and how they should approach the audit.
2. Verify suppliers’ reputation
You can find out how well-known and respected your supplier is by reviewing your suppliers’ reputation online. You can do this by searching for the company's name in search engines and on social media sites. Even simply searching for them on Twitter, Facebook, LinkedIn, and Google+ can make a critical difference.
Find out what people have to say about them on social media and review sites like TripAdvisor, or Yelp!. You should also look at product review websites to see if there are any complaints or concerns about the way they operate. Doing so will give you a better understanding of how your suppliers are perceived by their customers and other stakeholders.
3. See if they’re outsourcing
Outsourcing affects quality in positive or negative ways. When you audit a supplier manager, you should be looking for signs of outsourcing. You want to know if they've hired outside help in the past or can hire it in the future. You also want to know who they're hiring and what kind of experience they have.
If you find that a supplier outsources their work, it's important to ask why they do so and how much it costs them. This information can help you determine whether or not outsourcing is something your company should consider as well.
4. Find actual customer reviews
Customer reviews are a great way to get a glimpse into how your suppliers are doing, but they're only one part of the big picture. You also need to take customer complaints seriously, even if they seem minor. Customer complaints can indicate deeper issues with your supplier. If a customer complains about something, there's probably more going on than just that one complaint.
What Is an ISO Audit?
An ISO audit is an audit of your organization's compliance with one of the standards set forth by the International Organization for Standardization (ISO). Using SAMS makes it easy for companies to manage an audit and get better data that is defensible and compliant with ISO regulators.
The software makes sure all mandates are met completely at any time in order to make decisions quickly without having to wait around for someone else’s approval first.
Here are just some of the major regulatory bodies that SAMS can help your company’s appraiser to comply with:
- International Organization for Standardization (ISO) 9001:2000
- United Nations Supplier Code of Conduct
- Global Good Agricultural Practices (GLOBALG.A.P.)
- Current Good Manufacturing Practices (cGMPs)
- Sanitation Standard Operating Procedures (SSOP)
- British Retail Consortium (BRC) and The Packaging Society (IOP) Global Standards
- Hazard Analysis Critical Control Point (HACCP)
What Are the 3 Types of ISO?
Internal Organization for Standardization (ISO) is the process of making sure that companies meet with nationwide standards on quality and safety of products and services rendered to the public.
ISO audits come in three forms: first-party, second-party, or third-party audits. And of these audits, these are the major ISO types that are most relevant to supplier audit management software:
- ISO 27001:2013, guidelines for Information Security Management Systems (ISMS)
- ISO 14001:2015, standards for Environmental Management Systems
- ISO 9001:2015, general guidelines for organizational quality management systems (QMS), which are useful in vendor management.
What Are the Components To Look For in a Powerful System Audit Management Software?
Here are the five components you should look for in order to get the best out of your SAMS:
- Management review - your software should help auditors perform a quick vendor screening and determine their understanding of the ISO standards they seek certification on. Your supplier audit software should also offer features to comply with the comprehensive ISO mandates.
- Technical review - the software should have features that examine documents related to implementing the standard such as procedures manuals, test methods, etc.
- Document review - your software must help auditors quickly retrieve and verify supplier data related to developing and maintaining regulations. These include records of business reports, credit risk data, and corrective actions that are taken in response to nonconformities found during internal audits or customer complaints.
- Verification - the software must help auditors conduct an inspection of all areas covered by the standard including equipment used in production. It must also help verify raw materials used in production (if applicable). This is why you should look for real-time collaboration features in your SAMS so you can instantly verify goods receipt notices (GRNs) and other documents simultaneously in your team.
- Certification audit - a good SAMS must help auditors speed up certification error-free that can be awarded after a thorough inspection.
What Type of Audit Is Done to a Supplier?
According to Auburn University, there are four types of audits that can be done for suppliers:
- System Audit - this is the kind of audit of your suppliers’ fundamentals (what, where, when, who, etc.) being used to manufacture the product. This is more comprehensive and general and uses evidence and recorded data of the workflows and activities performed.
- Compliance Audit - this audit is a comparison check of your suppliers’ compliance records. This matches the written source of the contracts established to objective evidence of what should be done to comply with regulations.
- Process Audit - you perform this appraisal to verify the people, machines, and materials involved in your suppliers’ production. This is a much more narrow, specific approach to comparing whether a product matches the written standards, instructions, and processes of your business plan that have to be met to sustain high-quality delivery.
- Product Audit - you perform this audit to a supplier to get an actual appraisal of the finished product. This is to test for a variety of data, including: aesthetics, dimension measurements, and continuity of electrical networks in the products. The main aim of this audit is to make sure that the specs and requirements to create a high-quality product are met in the manufacturing stage.
How Do You Prepare for a Supplier Audit?
1. Understand the goals of your audit before it begins
The first step in preparing for an audit is understanding what your goals are—and then making sure that everyone in your department or company understands it, too. You'll want to think about what areas you need to focus on, and what parts of your business may need improvement.
2. Make sure there's someone who will be taking responsibility
Your inspector should be adept with the process of supplier audits so they know what they're looking out for in their key risk indicators (KRIs), key performance indicators (KPIs), and other control processes.
3. Get organized before the audit begins
Before auditors arrive, make sure all documentation is easy-to-access and well-labeled to avoid surprises during the visit—and no time spent searching through files or documents.
4. Gather feedback from employees after the audit is over
Take some time after the audit has ended to ask employees or key executives what they learned from the experience. Ask them for suggestions they might have on how things could be improved in future visits by auditors from outside organizations, such as suppliers and regulatory agencies like OSHA.
How Does a Supplier Audit Management Software Benefit Me?
SAMS will benefit you as a business owner, manager, quality check inspector, or employee in multiple ways. In fact, the supplier audit software benefits you can get will:
- Yield higher returns through an easy-to-use repeatable system for auditing suppliers, so you get consistent audits accomplished error-free, dramatically improving the quality and speed of your performance.
- Accelerate the management time of supplier audits by centralizing all information about them in one place, so you get more done with reduced effort.
- Generate reports on your suppliers' compliance with your company's standards for quality and safety, so you save the company money by avoiding non-compliance penalties.
- Allow you to set up alerts for when certain events occur during a supplier audit and remind you of important deadlines for any actions required by those events (e.g., approving or rejecting a supplier), so you can spend less time on paperwork and more time focusing on improving your own processes.
- Increase visibility into your supply chain, so you can always meet high standards for quality and safety, as well as scale to your next growth targets faster.
What Are Some Tips and Best Practices So I Benefit Most From a Supplier Audit Management Software?
Here are some tips and best practices to help you and your inspectors get the most out of supplier audit software:
1. Use the supplier audit software to map out your company’s direction
Know exactly what you and your company is looking for. If you don't know what metrics are important to your business, it's hard to set up a system that will help you achieve those goals. Make sure that you enable full-access to team members in the software so they can help map out the direction with the help of the advantages of the software’s features.
They can also help you in brainstorming for your complete goals, as well as ensure that everyone is on the same page when it comes to supplier management procedures and requirements.
2. Wield the complete features
Use the software to its full potential. Don’t just use it as a way to manage your audits, but also as a way to streamline communication between your company and its suppliers, as well as create a culture of ethics among your teams. On the same note, make sure your data is complete and accurate. If there's something missing from the data, it's not going to be as useful when reviewing it later on.
3. Use SAMS to track insights
Keep track of your progress with the software by using reports that provide insights into how well you’re doing. Use the software to assess your supplier audit management practices and how much time you spend doing these activities each day/week/month/year. This will allow you to identify areas where improvement can be made (e.g., if there are too many suppliers on your list who haven't been audited yet).
4. Set up alerts so you don't miss anything important
Alerts can be set up for certain metrics or even certain suppliers, so that if something changes drastically—in either direction—you'll know about it immediately and can take action from there.
Dashboards can help you do this because they give you at-a-glance information about your most important metrics. This way, even if your team is buried deep within a spreadsheet somewhere, they're still available at any time without having to go searching through files.
This helps inspectors avoid trying to remember what number might be what thing in which spreadsheet, getting confused, and lagging the process behind.
5. Only use the best supplier audit software
Make sure the supplier audit software you pick can offer centralized data collection tools for all your suppliers, automate supplier audits with swift solutions, and track your results with dependable metrics.
Fortunately, Lumiform empowers executives to acquire all the features above in its supplier audit management software. In fact, Lumiform’s supplier audit software offers the following proprietary features:
Pain Points Solved Faster
By streamlining compliance tracking and improving decision-making skills of executives, Lumiform’s supplier audit software lets you build better supplier relationships and solve problems faster. As a result, Lumiform lets you collect key vendor information quicker based on past performance and manage approvals faster, scaling your business farther and avoiding adventitious events that derail company targets.
With the help of Lumiform’s API integrations and real-time data analytics, you can reduce overhead costs and avoid costly errors in penalties by automating traditionally manual tasks. Lumiform ensures that your team can execute unified risk monitoring, deliver the highest quality of products and remediate risks consistently.
Consistent Compliance for Higher Returns
Lumiform’s supplier audit software empowers your organization with an audit system that consolidates risks related to non-compliance. This system ensures your suppliers always comply with mandates by agencies like OSHA . As a result, you drive efficiency in the quality of your company’s products and boost customer satisfaction, leading to increased sales and an even more profitable return on capital.
Complete and Accurate Corrective Actions
With Lumiform’s SAMS, not only can managers detect incidents and near-misses in real-time, but they can also complete corrective and preventive actions (CAPA) faster. This is attributed to Lumiform’s centralized, single location for everyone to have company-wide access to contracts, PRs, and confidential supplier data.
This means a higher ROI through Lumiform’s systematic support for complying with regulations. As an upshot, your company can produce infinite payoffs but still keep your supply chain healthy and full-functioning always.
Strengthened But Sustainable Growth Rate
Lumiform’s supplier audit management software will make certain that your company’s fast growth is foolproof and doesn’t contain hidden risks caused by overefficiency.
Its supplier audit software can help guarantee that your inspection reports, process validation, incident logs, and even supplier surveys are conducted with robust rigor, executive visibility, and seamless integration. That way, the quality solutions you deploy are sustainable, aligned to your macro targets, and not predisposed to blow-ups both at the individual and service levels.
