MAP THE PROCESS FROM START TO FINISH
“Auditing a small or medium-sized enterprise (SME) supply chain is about eliminating unnecessary steps. Map out the process from start to finish, and work out how you can get rid of as many middle bits as possible. The biggest barriers are almost always around software and data.
“As a general rule, the more information that there is about the steps in your process, the easier it is to judge which areas can be sped up,
and which will remove cost.
“Often, however, you will be dependent on suppliers to provide additional data, and as an SME, you may not have much clout over large suppliers. If so, try to organise some collaboration with other small companies using the same large supplier to encourage transparency, even if those other SMEs are your competitors.”
SET OUT THE KEY AREAS FOR DATA GATHERING
“Make sure that you capture audit data across the supply chain for key areas such as: performance (cost and operational), risk (fraud and ethical) and compliance (safety, technical and raw material).
“This will give you a fair picture of your supply chain performance, upon which you can then expand.”
DON’T MAKE IT TOO BURDENSOME FOR SUPPLIERS
“Avoid a tick-box exercise. Instead, employ a collaborative approach with all parties within your supply chain, with clear corrective action plans and milestones that are mutually beneficial. To nurture this, provide your trading partners with simple ways to provide accurate evidence of audits, including real-time images and issue logs.”
IMPLEMENT AN ELEMENT OF SURPRISE
“Whenever you audit a supplier, you should drop in unannounced; letting your supplier know that you’re coming gives them the chance to hide any evidence of poor workmanship, as well as brief staff on what to say if you speak to them.
“If you want to guarantee that every product in your supply chain is being manufactured to legal and ethical standards, you should also pay a visit to the subcontractors related to your main supplier. It’s time-consuming, but there really is no other way to get an honest picture of the entire supply chain leading up to you.”
TRANSPARENCY IS VITAL
“Shorter supply chains provide vital transparency, accountability
and control. We work with more than 43 producer groups in 14 countries, but our supply chain is deliberately simple: from supplier, to roaster, to customer. This allows us to ensure that the coffee that we source is 100pc traceable to each producer.
“A short and efficient supply chain has enabled us to remain flexible and responsive to demand across all levels of our business and day-to-day operations. Our total supply chain transparency is an important sales tool; our customers want to know exactly where our coffee comes from.”
CONSIDER HOW COLLABORATION CAN DE-RISK YOUR BUSINESS
“Long-term relationships with suppliers are crucial, linking an ethical and sustainable supply chain with the quality of your product.
“Between 2010 and 2014, there was a coffee-killing fungus outbreak known as leaf rust in Latin American coffee farms. We monitored development of the disease among coffee producers from whom we source. We were aware that reduced yields would directly influence the income of farm workers.
“We oversaw an innovative solution, creating a service facility for farmers that was applied by a team of trained workers to combat the rust. The initiative was a success – treated trees remained healthy with minimal losses across the supply chain – and wouldn’t have been possible without our auditing.”
REMEMBER: IT’S NOT NECESSARILY ABOUT CATCHING PEOPLE OUT
“SMEs are far more time-constrained than large organisations, so audits shouldn’t involve a 1,000-question assessment regarding their conformance to a range of industry standards. Instead, any procurement and compliance audit should think carefully about potential areas of weakness in their supply chain and focus on understanding these better.
“The aim should be to help SMEs improve practices in these areas, as opposed to catching them out.”