Supplier Audit Checklist: Measure Your Supplier’s Performance

supplier audit checklist

Many businesses use supplier audit checklists to determine the performance of their vendors. When you audit your suppliers, you’re getting the opportunity to find areas of improvement. You can also see how your vendor’s performance may be affecting your business.

Supplier audit checklists are an excellent tool to use in multiple industries. You can tailor your list to meet your industry specifics and needs. Due to this reason, many supplier audit checklists will differ from each other on the type of questions used. However, most supplier audit checklists will contain similar topic questions.

This article will provide a helpful supplier audit checklist that you can use to audit your suppliers and vendors. We’ll also talk about why conducting audits is good business practice.

Supplier Audit Checklist

When using a supplier audit checklist, you use a rating system to score your suppliers. Next to each question, score your supplier’s performance using this simple rating system.

N/A – Not available or not evaluated
0 – Major non-conformity – Discrepancies or absence of proper procedures. Requires a plan for corrective action to fix errors
1 – Minor non-conformity – Some errors with proper procedures noticed. Corrective actions required
2 – Acceptable – Proper protocols are followed, but there is room for improvement. Design an improvement plan to implement for higher scores
3 – Good – Procedures are in place and followed. No room for improvements
4 – Best Practices – Company has proper procedures in place, which are followed thoroughly. No changes are needed.

When your supplier receives a low rating, you’ll want to provide a plan of action that outlines the steps necessary to bring them into compliance. You may want to set a time frame for how long they have to implement these changes for a new audit.

Quality Assurance

All of your suppliers should have a quality assurance plan that requires the staff to meet production standards. Here are a few questions to ask about your supplier’s quality assurance policy.

1.1 Quality Policies

Number	Standards	Rating	Comments
1.1.1	Is there a quality manual defining production procedures?
1.1.2	Does the manual contain quality indicators and target goals?
1.1.3	Does the supplier have a management review process?
1.1.4	Are there internal audits?
1.1.5	Does the supplier have an action plan listing quality improvement steps?

1.2 Quality Management

Number	Standards	Rating	Comments
1.2.1	Does the supplier have an organizational chart displayed?
1.2.2	Is there quality control staff on site?
1.2.3	Does a continuous improvement strategy exist?

1.3 – Certifications

Number	Standards	Rating	Comments
1.3.1	Are there any certifications for the quality management system?

1.4 Supplies and Customers

Number	Standards	Rating	Comments
1.4.1	Are there customer satisfaction procedures?
1.4.2	Does a claim and crisis management procedure exist?
1.4.3	Are there order follow-up procedures?
1.4.4	Does the supplier have a document management system?

1.5 Maintenance

Number	Standard	Rating	Comments
1.5.1	Are there basic maintenance procedures and records?
1.5.2	Do they use proactive or preventative maintenance?
1.3.3	What equipment and resources are used?
1.3.4	Is equipment in good operating condition?

1.6 Calibrations

Number	Standard	Rating	Comments
1.6.1	Do they use external calibration? Frequency? Is there documentation?
1.6.2	Is there internal calibration?

1.7 – Training

Number	Standard	Rating	Comments
1.7.1	Are there management or other training programs proposed or occurring?
1.7.2	Are there worker training or knowledge programs?
1.7.3	Are the employees properly skilled for their role?

1.8 Production

Number	Standards	Rating	Comments
1.8.1	What is the process of manufacturing? Are there lags in the process?
1.8.2	Are there ways to improve production?
1.8.3	Is production handled with proper safety standards and gear?
1.8.4	Are products tested or examined after production to ensure proper manufacturing?

What to Check

When auditing your suppliers using this checklist, here are some things you will want to look at from your supplier. You’ll want to review multiple pieces of data to get a clear understanding of how your supplier measures up to your standards.

Quality manual, including procedures, revisions, list of changes
Yield data, issues, and improvements. Also, the status of results for audit/preventative/corrective measures
Analysis – inspection yields, resources, internal audits, corrective action statuses, field failures
Tactical and strategic goals, action plans, and objectives
Managements meetings, performance reviews, goals, action plans, customer surveys
Employee recognition programs
Cost reduction programs
Trends, meeting minutes, cost analysis, non-conformance occurrences, corrective actions
Qualification and certificates for staff and management
Presence of training material and instructions at work stations
Testing, production, training, and audit records
Training material and records, job descriptions, skills assessment

Social, Health and Safety Checklist

The standards for this section are based on the SA8000 criteria for safe working practices. You want to be sure your suppliers are using ethical procedures and provide a safe work environment for their staff.

2.1 Child Labor and Underage Workers

Number	Standards	Rating	Comments
2.1.1	Is there evidence of child labor?
2.1.2	Are there young workers?

2.2 Discrimination Disciplinary/Forced Labor

Number	Standards	Rating	Comments
2.2.1	Is there forced labor?
2.2.2	Does discrimination occur?
2.2.3	Does the company hold wage reductions or fines?
2.2.4	Is there any physical, mental or corporal coercion occuring?

2.3 Freedom of Association

Number	Standard	Rating	Comments
2.3.1	Are there worker unions or worker representatives?
2.3.2	What is the complaint procedure?

2.4 Hours Worked

Number	Standard	Rating	Comments
2.4.1	Are workers exceeding regular working hours?
2.4.2	Limit of overtime allowed? Are overtime hours recorded?
2.4.3	Are work hours tracked? Is there documentation that can be reviewed?

2.5 Remuneration

Number	Standard	Rating	Comments
2.5.1	Does the company meet minimum wage requirements?
2.5.2	Is there a reserve on overtime payments?
2.5.3	Do they cover social insurance?

2.6 Safety and Health

Number	Standard	Rating	Comments
2.6.1	Are there clearly indicated fire safety procedures?
2.6.2	Are there current building certifications?
2.6.3	Do they offer Personal Protective Equipment (PPE)?
2.6.4	Is there hygienic drinking water, bathrooms, canteen, and dormitories?
2.6.5	What are the safety conditions and facilities level?

Things to Check

Being associated with a company that operates unethically can land your reputation in hot water. When reviewing your supplier’s safety and health standards, check the following:

● Training procedures and participation

● Emergency response plans and preparedness and performance

● Safety meeting times, investigation reports for accidents, reports for safety audits

● Policies and guidelines regarding health and safety

● Charts for health and safety and improvement history for accident reports

Environmental Questions

You should expect your suppliers to comply with all laws regarding manufacturing processes. It can look bad on you if you receive goods from a supplier who engages in poor environmental protection practices. Low manufacturing can also result in contaminated products, which can be dangerous for your customers.

3.1 Legality

Number	Standard	Rating	Comments
3.1.1	Does the company have an environmental impact assessment?
3.1.2	Environmental Impact Approval Report
3.1.3	Does a pollutant discharge permit exist?

3.2 Control of Pollution

Number	Standard	Rating	Comments
3.2.1	How is solid waste stored/treated?
3.2.2	How is hazardous waste stored/treated?
3.2.3	How is waste water stored/treated?
3.2.4	What are the factory air emissions? What is being done to reduce these pollutants?
3.2.5	Is there noise pollution?

3.3 Water and Energy

Number	Standard	Rating	Comment
3.3.1	Is energy use being monitored?
3.3.2	Are there plans for how to reduce energy use?

What to Check

Many businesses attempt to reduce the impact their operation has on the environment. You want to be sure your suppliers follow proper procedures regarding environmental dangers. Check the following items:

Records for purchases, water consumption, and stream
Control procedures for inventory
Environmental policy statement documents
Government/agency inspections
Records for how environmentally sensitive activities are monitored and measured
Documents for the use of non-hazardous (RoHS/WEEE compliant) materials for production, recycling, biodegradable materials, and returnable containers or packages made of recycled material

In Closing

Supplier audit checklists are an excellent tool for businesses to use to determine their suppliers’ performance. You can use supplier audits to improve profits and your business relationship, discover problem areas, and increase productivity. We’ve provided you with a three-part checklist to help you perform supplier audits.