If you are in a sustainability department, supply chain management or procurement, you’ve probably seen it happen: when asked to pass a sustainability audit, some suppliers do whatever they can to stall the process, often delaying the audit for a couple of months or even avoiding it altogether. With a few simple measures, you can greatly improve the success of your audit program.
As a provider of sustainability audits, we observe it all the time: Companies design a responsible sourcing program, code of conduct and audit program for their supply chain, but find that the planning of the audits takes forever. Some suppliers flat out refuse to have another sustainability audit, some go silent hoping the request will go away, whereas others request a postponement.
If those symptoms sound familiar, it is because the problem is a familiar one as well: audit fatigue. Despite all initiatives towards common supplier standards, the audit pressure on suppliers has never been higher than it is today.
How can we do better?
The issue of audit fatigue is something to be aware of when setting up a responsible sourcing program for your supply chain. With a few relatively simple measures, you can improve the effectiveness of the audit program and reduce the strain on your suppliers.
Measure #1: Refer to existing standards in your Supplier Code of Conduct
99 % of all supplier codes of conduct are exactly the same. This means there is no need to reinvent the wheel: it is very likely that standards and initiatives such as Sedex SMETA, SA 8000 and BSCI already cover the requirements outlined in the code of conduct of your company. Instead of developing a custom-made audit program based on your code of conduct, we recommend looking at existing standards: they bundle years of best auditing practices.
If you have any particular requirements that go beyond existing standards, you can add these to the audit protocol.
Measure #2: Consider what your suppliers have already achieved
Before requesting your suppliers to pass an audit, consider what they already have: it is unlikely that you are the first client to request a sustainability audit. If a supplier already has a valid certificate or audit report from a trusted third party, is it necessary to audit the same aspects again? Compare your supplier code of conduct to existing standards and only audit those aspects that have not been sufficiently assessed yet.
Measure #3: Consider a risk-based approach
Instead of deploying a supply chain-wide audit requirement, balance the risk and the level of assurance you require. Several providers provide risk assessment tools that can help you determine auditing priorities. These tools typically distinguish:
- inherent risk for regions and industry sectors (economic situation, wage structure, worker population, …)
- particular risk levels of individual suppliers, e.g. based on previous audit findings and questionnaires
Measure #4: Focus on improvement
If suppliers are reluctant to have a sustainability audit, it may be because they worry about the consequences of a bad audit result. To allay these fears, offer support and guidance to suppliers – both for the preparation as well as for the follow-up. Avoid a “pass or fail”-approach, but rather help suppliers improve their sustainability performance.
Measure #5: Reward good performance with Business
Many companies have implemented an award scheme for their supply chain: winning the award gives the supplier something to be proud of. However, what matters more than a trophy is the bottom line: if suppliers with an excellent sustainability performance get a return on investment from you in the form of additional sales, they will need no further motivation to continue improving.