Procurement and supply chain

processes: are you doing it

right?

What do you consider when assessing product compliance? Do you take it for granted that a product meets specifications? The Auditing Practices Group has put together some tips to help you discover whether you are carrying out good supply chain management

In order to meet the requirements of clause 7.4 of ISO 9001:2000, organizations have to put in place processes to control the purchasing of products or services and their verification. However, the way organizations consider such requirements are fulfilled may not necessarily be the most appropriate one.

In many instances it may be difficult to ensure that purchased products simply meet original specifications in all respects. In such cases, it would be preferable to review the wider processes for procurement and supply chain management. The following bullet points outline the best way to ensure product conformity.

Auditing the procurement process

• procurement should start during the design and development of a product when a specification is prepared. Has there been some form of ‘approval’ of the specification before the order was confirmed with the supplier?
• inter-departmental discussions should take place to ensure that potential suppliers can provide a product that meets the design specification at the required cost
• statutory and regulatory requirements should have been included in the purchase requirements. Does the purchase order refer to any?
• the degree of risk associated with a component or product and the controls required to ensure that it meets the design specification should have been assessed

Auditing the supply chain

In many cases, audits of the selection of suppliers may simply consist of a review of the organization’s approved supplier list. There are cases, however, in which this may not be sufficient to ensure that the organization has effective control of these suppliers within its supply chain. Consider:

• are suppliers of critical components/products selected based only on their ability to supply at a good price or is their ability to supply consistently to specifications also taken into consideration?
• is the maintenance of suppliers in the approved lists solely based on their continued certification against a recognised quality standard or is the scope of this certification reviewed?
• how frequently are credit notes being raised by the organization for a product rejected then subsequently accepted?
• how many concessions have been raised that allow the organization to accept previously rejected products?

Conclusion

For an experienced auditor, reviewing the procurement process and supply chain of an organization is straight-forward common sense, but there are situations where the nature of the product or component may indicate that additional investigation is necessary. Every product is unique, just as all audit situations are unique.

About the authors

The ISO 9001 Auditing Practices Group is an informal group of quality management system (QMS) experts, auditors and practitioners drawn from the ISO Technical Committee 176 quality management and quality assurance (ISO/TC 176) and the International Accreditation Forum (IAF). It has developed a number of guidance papers and presentations that contain explanations about the auditing of QMSs. These reflect the process-based approach that is essential for auditing the requirements of ISO 9001.

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