Plant Audits -3 Actions for Generating Results

Plant Audits: 3 Actions for Generating Better Results & Relationships

Most people don’t enjoy taking tests and as the time to commence a test approaches many people get nervous. Unfortunately, test taking often shares similarities with plant audits for suppliers across many industries. Our experience has demonstrated that improving the supplier plant audit process results in an enhanced supplier experience allowing companies to de-risk supply over time by proactively identifying continuous improvement opportunities and developing better relationships with their supply partners. Supply chain professionals that follow a well-documented supplier plant audit process that utilizes robust industry best practice templates establish a clearer baseline of data upon which to gage individual supplier performance. Professionals that focus on improving supplier communication, adjusting their mindset, and enhancing actionable next steps when executing supplier plant audits generate better results and relationships with supply partners.

Challenges
Customers today expect uninterrupted supply and the highest quality, thus it is important that manufacturers conduct supplier plant audits before sourcing and on an ongoing basis to ensure quality is maintained. Common practice is audits are something to be feared and nervous about if you are a supplier and OEMs, auditors, need to “catch” suppliers doing things wrong. Many OEMs and Tier Is take an adversarial approach that focuses plant audits on identifying issues with suppliers’ processes. The very nature of the term plant audit creates a us verse them feeling even if the auditor is collaborative and friendly. A general lack of a focus on the core task at hand, ensuring continuous flow of quality components by supply partners to ultimately assemble quality finished products for customers, is thus sometimes forgotten. Companies and supply partners must come together to focus on auditing the processes that create the components to collaboratively drive supply chain value for customers.

Key Considerations for Plant Audits
A supplier plant audit is a proactive supplier quality maintenance activity to verify supply partners are performing to agreements and identify areas for continuous improvement as part of building a long term partnership. Typically, supplier plant audits take place post supplier sourcing assessments, which at times can be conducted virtually with supplier plant audits acting as additional onsite requirements to verify. Supplier plant audits are usually proactive audits focused around new program launches with existing supply partners unlike supply disruption audits which are a version of plant audits that focus on quickly root causing, and eliminating supply disruptions. Companies need to move beyond an audit mindset to a partnership mindset that focuses on identifying challenges together in the theme of continuous supply chain improvement. Below are some plant audit actions in the areas of communication, mindset, and information for your next plant audit to generate better results and relationships with your supply partners.

Solutions

  • Action 1) Communicate Transparently & Proactively
    Companies need to convert from a need to know communication mindset to a transparent and proactive communication mindset with supply partners. Plant Auditors should take the lead on announcing plant audits in advance, plant audits are not meant to catch companies doing things wrong but ideally catch companies doing things right. Pre onsite visit, review and communicate your company’s plant audit form, including the rating method to quantitatively rate supply partner plant operations or problems discovered. Once the audit team is onsite, hold a brief, usually 30 minute, huddle meeting to proactively outline plant audit next steps. Outline plant audit, team members, purpose, anticipated time duration, process, expectations, and assessment needed. Consider a supply partners plant as their home, it is important to respectfully ask for information not demand it as plant audits should not interrupt daily operations.
  • Action 2) Convert from an Audit Mindset to a Consultative Mindset
    Plant Auditors purpose should be to verify supply partners’ processes utilizing a consultative mindset verse an audit mindset of looking for issues. Plant Auditors need to seek out ways to add value, pre, during and post audit to improve the extended enterprises supply chain. Enhance every interaction by offering up ways that supply partners can enhance their operations proactively as a whole, not only for specific problems. If an issue is uncovered during a plant audit it should be approached from a position of joint ownership and collaboration to develop a solution. Clearly outline next steps, leads, touchpoint process, and timing for corrective actions while onsite and follow-up with an email to drive results. True continuous improvement is achieved over time, periodically follow-up with helpful suggestions for ways supply partners can improve their business to drive lasting results.
  • Action 3) Enhance Actionable Next Steps
    Ask for and attain all required quantitative information remotely from your home office and review it ahead of visiting supply partners to allow onsite time to be focused on specifics and relationship building. An onsite plant audit should be to one verify information received and reviewed ahead of time via a small sample size and two to audit the qualitative metrics onsite that can only be gleaned from meeting with the supply partner in person. Quantitative metric examples include, parts per million, employee process training manuals, and process throughput. Qualitative metrics include, supply partner engagement, company culture, and line employees understanding the quality processes. Alignment of both process, forms and instructions, with performance, key performance indicators, and compliance, is the key to ensuring world class manufacturing operations. Enhance every interaction by outlining clear goals, leads, and actionable next steps.

Conclusion
Strive to deviate from the test taking feeling norm of typical plant audits and treat this critical process as an opportunity to drive better supply chain results and relationships with your supply partners. Small simple actions to improve supply partner communication can go a long way in executing smoother plant audits and generating enhanced results. Adjusting Plant Auditors’ mindsets allows for building better supply partner relationships and de-risking supply through ongoing continuous improvement collaboration opportunities. Enhance actionable next steps by investing time pre audit to request information and spend more time verifying information and outlining next steps onsite. Supply partners have many more customer options today so it is more critical than ever to provide ongoing value to supply partners in every interaction to strengthen relationships. Supply chain professionals that take actions to improve supply partner communication, adjust their mindset, and enhance actionable next steps during supplier plant audits generate superior results and relationships with supply partners.

-William