Regulation and sustainability
Auditing your own suppliers
When the demand reaching you has to be passed upstream.
The moment comes when the demand you receive from a customer has to be passed to your suppliers. And there you discover what your customer already knew: asking is easy, getting it delivered is not.
The three levels of demand, and what each costs
| Level | What you ask | What response you get |
|---|---|---|
| Declaration | That they sign they comply | High. Almost everyone signs |
| Evidence | That they prove it with documents | Medium. The organised ones do |
| Audit | Going to see it | Low, and expensive. Only for critical ones |
Important
Start at level one with everyone and escalate only with those who matter. Demanding level three from two hundred suppliers is not rigour: it is an expensive way of achieving nothing, because you cannot audit two hundred and they know it.
How to decide who escalates
Watch out
A supplier who signs a declaration and does not comply leaves you worse off than one who honestly says they cannot: with the signed declaration you accepted something you never checked, and that is on record.
What makes them respond
The same as any request: ask for little and specific, with the full name of what you want, a real deadline, and a reason that matters to them. "Our customer requires it of us" works better than you would think: most understand because the same happens to them.
Worth knowing
Keep the request even if no answer comes. Before your customer, "we asked on X and received nothing" is a very different position from "we did not ask".
›Can I require it contractually?
On renewals it is standard; check with your adviser.
›What if a critical supplier refuses?
That is information for a commercial decision, and worth taking expressly.
›Does a third-party audit help?
It is usually most efficient for critical suppliers, and avoids duplicating effort with their other customers.
A real case
The situation
A company demands documentary evidence from its 180 suppliers and 40 respond.
What you do
- Keeps the signed declaration for everyone
- Escalates to evidence only with the 20 critical ones
What you get
Gets 18 of the 20 that matter, instead of 40 scattered among those that do not.
The situation
Suppliers are asked for less than is asked of you.
What you do
- Passes the same list back up the chain
What you get
The gap stops sitting on your balance sheet.
The situation
Each supplier replies in a different format.
What you do
- Requests specific documents to a single destination
What you get
What is received can be compared.
The situation
Chasing thirty suppliers occupies a person.
What you do
- Requests and chases automatically
What you get
That person reviews instead of nagging.
The situation
A client asks about one supplier by name.
What you do
- Checks that supplier's file
What you get
You answer with a list rather than an enquiry.
The situation
A supplier's documentation expires without warning.
What you do
- Records third-party expiries too
What you get
The gap closes before the question.
This article answers
- audit my suppliers
- supplier sustainability questionnaire
- how do i require from my supplier what is required of me
- second-party audit