Abstract

With much of an organization's value dependent on its product suppliers, a strong supplier audit program is essential. Organizational risk can be reduced or eliminated by effective management of suppliers, based on a systematic analysis of their delivery, response and rating. Evaluation may be influenced by the newness of a product or process, its complexity and criticality, and supplier history. An effective supplier audit demands careful planning and consideration of criteria, cooperation with supply chain professionals and open communications. Findings should rate overall risk and highlight systemic and chronic failures. Poor results can lead to working with the supplier to improve performance or downgrading the supplier to lower organizational risk.