Effective risk management and compliance with government regulations and internal polices drive the need for ongoing auditing of suppliers, intermediaries, and subsidiaries. Managing audits becomes a complicated activity when there are multiple departments, or external auditing firms, looking to run audits for different compliance areas but for the same suppliers.
The lack of coordination among all of the audits, and audit-types, leads to the inefficient use of internal and external resources. Further, this environment results in unhappy and confused suppliers, audit firms, and employees. An integrated approach with an overall view of all the ongoing audit activities, results, and follow-ups helps reduce costs and improve the overall value of supplier relationships.
Identifying Suppliers for Audits
You should be concerned with
- New supplier relationships commencing without proper upfront risk mitigation
- No visibility into what types of suppliers are onboarded, and by whom
- Lack of internal resources to discover when a new supplier is required to be audited
Equipped with limited internal resources and a broad scope, just identifying which suppliers to investigate is a huge challenge. Leading companies are now integrating all their audit programs with their supplier onboarding processes, allowing the system to filter suppliers based on predefined rules and alert compliance functions before a new business relationship commences. Supplier management systems are enabling new levels of oversight, coordination, and visibility – from initial supplier qualifications through ongoing audits and corrective action programs and requests.
Streamline Supplier Audits
A service provider, for example, may require IT audits, information security, and data privacy, while a manufacturer may address quality, health and safety, and environmental issues. Country-specific requirements often come into play as well.
You should be concerned with:
- Cost inefficiencies and the amount of time internal resources must spend in scheduling audits
- Multiple departments carrying out audits for the same suppliers at different times
- The inability to share information across departments, repurpose audit procedures, automate workflows and findings
- Delays in onboarding suppliers caused by audit execution bottlenecks
- Improving relationships with suppliers through a commonly coordinated audit approach
This growing list of risks and auditing needs has had an adverse effect on internal resources and supplier relationships. New audit programs constantly emerge when new legislations are passed and regulations established, or due to a change in the organization’s supply chain or buying needs. Working with point-to-point or other standalone solutions can cause a large number of inefficiencies, as organizations are unable to easily schedule audits, brief suppliers, expense travel, analyze risk, and provide ongoing oversight.
Audit Visibility, Compliance & Reporting
You should be concerned with:
- Having an integrated view across compliance functions’ audit programs, associated risk, and actions
- Ensuring upfront compliance with all new suppliers before commencing a new business relationship
- External auditors executing audits outside of corporate policy
- Having the ability to deliver, on short notice, real-time information of risk exposure across supplier relationships
Leading organizations pursue fully integrated audit programs, linking procurement and finance processes, the onboarding of new suppliers, and integration of audit data with common supplier master data found in ERP systems.
HICX helps companies across various industries streamline their audit programs and manage the entire audit lifecycle for suppliers. Our Audit Management solution enables you to:
- Define and manage policies and audit programs, through initiatives and tracking compliance
- Create business rules to easily identify newly requested suppliers and flag them to the appropriate compliance functions
- Leverage a systematic and workflow-driven audit process across the enterprise, suppliers, and external auditors
- Schedule audit workflows between your organization, the supplier, and external/internal auditors
- Track and manage audits and relevant documentation online through an integrated supplier/auditor partner portal
- Build questionnaires and supplier assessments
- Define follow-up actions and track their status
- Receive email-based notifications and alerts
- Gain complete visibility into the audit process and metrics for better risk management and assured compliance
- Roll up reports and dashboards to track compliance within, and across, audit programs
- Centralize all audit documentation, actions, and status information in an single repository