Auditing suppliers is a critical factor in African supply chains, but not every supply chain does it well. This is true for supply chains across the globe, including those in Africa.
To a great extent, your vendor or supplier can determine the success of your supply chain. Considering their importance, auditing them correctly should be a priority with many supply chains.
However, many in Africa don’t place a lot of value on auditing, especially when the vendor checks out on paper. This will often become a problem for these supply chains and businesses.
In this article, we will explore what the auditing process looks like, what to look out for, and how to go about it effectively. When done right, it could be all the difference you need to run a successful supply chain operation.
What is Supplier Auditing?
Supplier auditing is simply checking out potential suppliers for two primary reasons. To ensure they have the same or similar values and they have the capacity to meet the needs of the supply chain or organization.
It can be a rigorous process for the sourcing team, especially when searching for a strategic supplier or partner, but it is well worth the effort.
The problem with many supply chains in Africa is that the sourcing team can get too friendly with the supplier. This often leads to bribes or promises of goodwill, effectively ensuring due diligence is not carried out.
Many times, these suppliers will look good on paper, even going as far as forging documentation. A good example is in the trucking industry, where these businesses effectively forge truck documentation or the number of trucks under their control to win big contracts.
However, after the onboarding, the suppliers find it difficult to meet the target. And the supply chain in question begins to suffer disruptions and downtimes.
Challenges that can Impede the Supplier Auditing Process in African Supply Chains
There are a few challenges that can make the auditing process incomplete or ineffective. They are the following.
- Supplier Diversity
- Geographical Dispersal
- Language and Cultural Barriers
- Resource Constraints
- Data Collection and Verification
- Supplier Resistance
- Lack of Technology and Data Integration
- Regulatory Compliance
- Subcontractor Audits
- Subjectivity in Auditing
What African Supply Chains Can Look Out for During Supplier Auditing
Although there are two primary factors to consider- values and capacity, we will find them by exploring the entire picture.
𝟭. 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗖𝗮𝗽𝗮𝗰𝗶𝘁𝘆: You want to ensure the supplier is financially stable. Many times, supply chains will pay after the service has been rendered. This is a common practice; therefore, you want to ensure the supplier can work with your organization under these conditions.
𝟮. 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 𝗖𝗼𝗻𝘁𝗿𝗼𝗹: Your suppliers will offer different goods and services, but it is your responsibility to ensure they are of the right standard. This begins with verifying the quality control of the suppliers. It will go a long way to prevent counterfeiting.
𝟯. 𝗧𝗿𝗮𝗰𝗲𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝗻𝗱 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆: These two ensure you can easily communicate and identify with the supplier’s processes at every stage. Transparency allows you to have an insight into potential delays and disruptions.
𝟰. 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝘄𝗶𝘁𝗵 𝗟𝗼𝗰𝗮𝗹 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀: Lack of compliance with local customs can impact your supply chain operations. Always make sure the supplier is well-compliant and has the necessary documentation.
𝟱. 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀: Although sustainability is still well overlooked across much of Africa, it is increasingly becoming a main feature for other parts. Your supplier’s sustainability reflects on your brand and organization. Look out for how seriously they take their environmental and social responsibility.
How African Supply Chains Can Conduct Auditing Suppliers
Auditing suppliers can be so much easier if you have the right strategies and tools. Here, we will discuss some of them.
1. Have Expectations Handy
Expectations make the process easier. You want to have it handy, but it’s not just your expectations. Get your expectations handy, but also get that of the supplier. Suppliers are active participants in your supply chain, and it is important to understand that they are also curious about your supply chain operation.
What this does is it allows you to streamline the necessary information you require from each supplier. When you have expectations, it is important to communicate them effectively with the suppliers and your sourcing team.
It is an effective way to simplify the auditing process because the supplier can provide information faster and more accurately. You never want to have less than necessary because it can negatively impact auditing.
2. Create An Audit Program or System
An audit program or system will help the process proceed smoothly. It provides a template for all members of the sourcing team to follow. And it can be applied to different suppliers across the supply chain.
With an auditing program, you want to factor in what you are auditing. It could be different processes or operations in the supplier’s service. You also want to factor in the number of times or how often the auditing will take place.
A clear auditing system allows all parties involved to prepare properly for the auditing process, which makes it much more effective.
3. Choose the Right Members of the Audit Team
Your audit team has to be made up of experts and trustworthy people who have your supply chain’s interest in mind. You want to ensure the team members have the necessary experience as well.
Areas to focus on when assembling your audit team include: quality control, compliance, labour practices, operational capability, and financial analysis.
You also want to ensure the team members are well-trained in the auditing process. They may be experts in the various fields outlined above. However, if they are not well trained in the auditing process, it can slow it down.
4. Data Collection and Analysis (automated)
Take time to correctly collect and analyze the data or information provided by the suppliers. You may automate it for effectiveness and speed. Automation also helps reduce errors and helps explore insights you may not look out for or see ordinarily.
When collecting and analyzing data, you must ensure you are dealing with the correct information. This means effectively communicating the purpose of the audit and their input to the suppliers.
You also want to describe the function of each audit process clearly. When auditing, there should be room to properly vet the data collected before analysis to subvert wrong or fraudulent information.
5. Report and Feedback
Good or bad, you want to communicate your findings with the supplier’s operations and services with the supplier. This way, the supplier knows what is working and what is not, and they can adjust.
It also allows you to record findings and their communication to have a point of reference for future auditing. For example, suppose you had found a process that negatively impacted the supplier’s ability to collaborate with your supply chain, and you pointed it out.
In the next audit. In that case, you should expect to find it fixed. Otherwise, it signals a lack of improvement and an inability to take your supply chain seriously.
Why is Auditing Suppliers Important to African Supply Chains?
Auditing suppliers can come in handy for various reasons. Let’s explore some of them in this article.
𝟭. 𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗮𝗹 𝗜𝗺𝗽𝗿𝗼𝘃𝗲𝗺𝗲𝗻𝘁: Auditing suppliers can improve the overall supply chain. By identifying potentially flawed areas in the supplier’s operations, you are helping the suppliers enhance their processes and practices.
𝟮. 𝗖𝗼𝘀𝘁 𝗖𝗼𝗻𝘁𝗿𝗼𝗹: Sometimes, there may be inefficiencies in the supplier operations or in their interaction with your supply chain. Auditing helps uncover these inefficiencies, which can potentially contribute to cost savings. This also helps with the overall financial performance of both parties.
𝟯. 𝗦𝘂𝗽𝗽𝗹𝗶𝗲𝗿 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁: Working closely with suppliers through the auditing process allows them to develop and build better capacity. This can lead to better long-term relationships and a more reliable supply chain overall.
𝟰. 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲: Supply chains that conduct regular supplier audits can maintain high standards in their operations. This can help them gain a competitive advantage by offering high-quality and compliant products to their customers.
𝟱. 𝗥𝗲𝗽𝘂𝘁𝗮𝘁𝗶𝗼𝗻 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: Whatever happens with the suppliers, your supply chain and organization will bear the bulk. Therefore, ensuring suppliers meet all necessary standards can help protect your organization’s reputation. In an interconnected world where negative news can damage a business’s revenue, reputation is more important than ever.
FAQs on Auditing Suppliers for African Supply Chains
Q1: In African supply chains, how may supplier opposition to audits be lessened?
Supply chains can mitigate suppliers’ reluctance. They just need to foster goodwill, outline the goals and advantages of audits, and integrate suppliers into the procedure.
Q2: What part does technology play in African supply networks’ supplier audits?
Technology can potentially increase data security, speed the audit process, and improve data collecting and analysis. Audits can be made easier using data analytics tools and audit management software.
Q3: What steps can businesses take to guarantee that supplier audits in African supply chains are carried out impartially and ethically?
Maintaining openness and impartiality throughout the audit process, upholding professional standards, and educating auditors in ethical practices are all necessary to ensure unbiased and ethical audits.
Obinabo Tochukwu Tabansi is an ex-supply chain professional turned ghostwriter with a decade of experience working in different facets of the supply chain. Today, he lives his passion for writing on all things supply chain and helping clients from across the globe communicate their thoughts and solutions seamlessly. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the continent’s complexities.
