The requirement to review your suppliers and contractors performance has always been part of almost every management system standard I know. But business should be reviewing the performance of their suppliers and contractors regardless.
So why is it that reviews aren't done on time or they are done so poorly? Why have auditors just glossed over this requirements or accepted an excel spreadsheet register with name and their status of approved or not approved?
You need to consider that your suppliers and contractors are one of your single greatest point of failure. From raw material failure that could cost you $100000’s of dollar and reputation damage to a contractor performance that could injure your staff.
You need to take these review seriously.
This blog comes from an ongoing series that originated from "26 Ideas for Working from Home for Compliance Professionals".
How to Conduct a Real Review
When I talk about review I mean conducting a "real" review.
I’m not talking about your employees sitting in cabins (or dongas if you are Australian) looking at some documents and determining if their contractors are approved or not.
I am talking real proper review where you observe performance, interview your staff, Management and Supervisors as well as reviewing meaningful information to determine their status. This is not a "tick and flick" exercise where you use a simple checklist.
So why don’t we do real reviews:
- Firstly auditors have enabled this part of a company’s system to be a tick and flick process accepting the spreadsheet as good enough.
- Companies don’t have a good process because they don't understand the value of doing it properly.
- They don’t have time to find all the information so revert to they did last year so they should be OK again.
- They think every supplier or contractor needs to be reviewed.
How can we do it better?
The first thing as usual is to look at the current procedure and ask:
- Has the procedure ever been updated?
- Is it designed to identify value and remove waste and cost?
- Is the purpose of the procedure requirements clearly known and understood?
- Does it consider Risk when determining the review cycle?
Next determine if the review process can be automated? If it can then test the review process to make sure that an automated process can still add value.
Make decisions based on evidence. Don't base your reviews on opinion or subjective methods. Being objective and basing decisions on facts is crucial.
Identify where you can get information and evidence from that is quick and easy to find. Having difficult to find evidence can hijack the process. Your employees will be less willing to conduct real reviews if the information is not easily available.
Have a criteria that helps define the review frequency cycle. This will be based on risk. The higher the risk the supplier or contractor poses the more frequent the review. Low risk will mean few if any reviews. Overall this approach will reduce the number of reviews to be performed.
Always record poor supplier and contractor performance in your management meeting. This is so that this information can be used as part of your review process.
So there you have it. Stop sitting on your hands and procrastinating about the performance of your suppliers or contractors.
Get out there are start your reviews now.
- Ensure your process adds value and doesn’t add waste
- Ensure you know where the data for the review is held
- Use a risk criteria to determine frequency of reviews