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supplier vendor audit site visit refusal

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#1 matthewcc

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Posted 11 September 2019 - 02:44 PM

Hello all,

 

What would you do with a supplier that refused to let you audit their facility and operations?  We have had this supplier of ingredients refuse to allow a site visit twice now within the last 10 months.  I recently asked if they would allow a "desk audit" with no site visit, and they didn't respond.  We have never had any of our other suppliers refuse to allow a visit before.

 

We manufacture dietary supplements in the United States under 21 CFR Parts 111, 117, and 121.

 

Thank you,

Matthew



#2 GMO

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Posted 11 September 2019 - 02:56 PM

Depends if it's already audited by a GFSI CB?  If not then I'd be tempted to find another supplier.  If they are and they're just pushing back on multiple audits, I feel their pain and have been there.  Would they be open to a face to face visit (no audit) to understand their objections?  You can normally get a "feel" for an organisation just by walking through the door and if they also are prepared to share a GFSI report that may reassure you.  If not they may be willing for you to audit but with an NDA so it's not widely distributed.  If they're really bloody minded about it though and don't have back up of independent audit, that would be a red flag for me.  What are they hiding?



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#3 QAGB

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Posted 11 September 2019 - 03:06 PM

I have had numerous suppliers refuse to do an audit. Given you work in dietary supplements, your situation is different than my experience.

 

  • You could consider not using them as a supplier and finding one that will allow you to audit them.
  • Consider your supplier's product performance. Have you had any issues with their products in the last year? Do you have issues with getting documentation in a timely fashion?
    • If answer is yes to either - let them know that in order to keep them as an approved supplier, you have to conduct an on-site audit.
    • If answer is no to both - enforce the desk audit/supplier questionnaire. Let them know that in order to keep them as an approved supplier, they must complete this document.

If you were under GFSI certification (maybe you are) the application of this changes a bit. Under BRC I always did the following.

 

  • No on-site audits for GFSI certified facilities
    • Unless we have product performance issues and need to review their process to continue partnership.
  • For non-BRC sites we required supplier questionnaires completed by all.
  • On-site audits were risk based for sites that had no GFSI certification.
    • Sites with excellent performance, and good response to documentation requests were not audited.
    • Sites with less than excellent performance/documentation response were audited.
  • We removed suppliers from approved list if they refused or could not pass our audit. We also would flag previously GFSI certified companies that lost certification - not removing them but ensuring process to re-establish certification was completed.


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#4 pHruit

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Posted 11 September 2019 - 03:08 PM

Just as a counterpoint to the "what are they hiding?" question, which nonetheless is a suspicion that I often share when a supplier declines an audit, how significant is your business to them?

We have declined audit requests from customers simply because it doesn't make commercial sense - tying up my time and that of my team for a day isn't justified based on the amount of money that we actually make from them.

 

When we struggle with intransigent suppliers we rope in the commercial team to assist in applying pressure. Assuming you reasonably pass the "is our business actually worth their time" test, and you can't achieve a reasonable position based on their certification etc, then ask your buyer to call the most senior sales contact he can - have him explain that if you can't approve them as your supplier then you will need to take your business elsewhere. Money is generally effective at making a point ;)

 

Otherwise GMO's final point is very valid - if there is no appropriate independent certification and you can't arrive at a reasonable compromise for another means of approval then it might be time to start looking for alternative sources...



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#5 QAGB

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Posted 11 September 2019 - 03:13 PM

Just as a counterpoint to the "what are they hiding?" question, which nonetheless is a suspicion that I often share when a supplier declines an audit, how significant is your business to them?

We have declined audit requests from customers simply because it doesn't make commercial sense - tying up my time and that of my team for a day isn't justified based on the amount of money that we actually make from them.

 

When we struggle with intransigent suppliers we rope in the commercial team to assist in applying pressure. Assuming you reasonably pass the "is our business actually worth their time" test, and you can't achieve a reasonable position based on their certification etc, then ask your buyer to call the most senior sales contact he can - have him explain that if you can't approve them as your supplier then you will need to take your business elsewhere. Money is generally effective at making a point ;)

 

Otherwise GMO's final point is very valid - if there is no appropriate independent certification and you can't arrive at a reasonable compromise for another means of approval then it might be time to start looking for alternative sources...

 

 

I generally agree with this stance. 

 

I did have trouble with one supplier that was not GFSI certified, and had some issues with product performance as well. By BRC standards, we're supposed to have them conduct at least a supplier questionnaire, but in this case, I didn't think a questionnaire was sufficient due to the issues at hand. 

 

They flat out told us we didn't buy enough to be worth their time, so we fast tracked a move to a new supplier that met standards.



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#6 matthewcc

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Posted 11 September 2019 - 04:11 PM

Depends if it's already audited by a GFSI CB?  If not then I'd be tempted to find another supplier.  If they are and they're just pushing back on multiple audits, I feel their pain and have been there.  Would they be open to a face to face visit (no audit) to understand their objections?  You can normally get a "feel" for an organisation just by walking through the door and if they also are prepared to share a GFSI report that may reassure you.  If not they may be willing for you to audit but with an NDA so it's not widely distributed.  If they're really bloody minded about it though and don't have back up of independent audit, that would be a red flag for me.  What are they hiding?

They have SQF level 2 certification.  Perhaps I'll ask if they're willing to share the report.  However, that's only a piece of paper, and they've had quality issues that I can't really go into here, to the point that we're considering switching suppliers.  Thus, it's not a routine audit request given poor recent performance.  We need to get answers and don't have them currently.  Any certification report from them would need to have enough transparency (and evidence of working toward goals) to provide adequate quality assurance.



#7 QAGB

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Posted 11 September 2019 - 05:47 PM

They have SQF level 2 certification.  Perhaps I'll ask if they're willing to share the report.  However, that's only a piece of paper, and they've had quality issues that I can't really go into here, to the point that we're considering switching suppliers.  Thus, it's not a routine audit request given poor recent performance.  We need to get answers and don't have them currently.  Any certification report from them would need to have enough transparency (and evidence of working toward goals) to provide adequate quality assurance.

 

 

As they are SQF Level 2, that's at least good news. Some companies won't issue a report to you, and some will only do so with a NDA. Most are pretty open to sharing the report though. 

 

In this case, I would require conducting an on-site audit from them because of the experienced quality issues. I'd let them know that in order to remain an approved supplier, they must allow the audit. 

 

At this point, you should really start doing some research on other suppliers of that material, and get your procurement and management team involved to let them know of a possible switch (if this supplier still refuses). That way everyone is aware before the red flag is thrown, and you already have your options developed.



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#8 SQFconsultant

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Posted 11 September 2019 - 08:40 PM

If they are telling you they have an SQF Level 2 cert ask them if that was the last cert they have as everything has switched over when 8.0 came in.

If just a stumble and they meant to say 8.0 yes, I would attempt to get the full audit report and copies of their corrective actions submitted and approved.

If the audit is good and it's quality issues that remain and they are refusing a site visit it could be because they don't want a direct customer to see everything butay be open to you contracting with an auditing company for a 2nd or 3rd party audit that targets the quality issues.

Frankly, if they won't go for that - you need to find another supplier.


Warm regards,

 

 

Glenn Oster

Glenn Oster Consulting, LLC

 

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#9 GMO

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Posted 12 September 2019 - 10:53 AM

They have SQF level 2 certification.  Perhaps I'll ask if they're willing to share the report.  However, that's only a piece of paper, and they've had quality issues that I can't really go into here, to the point that we're considering switching suppliers.  Thus, it's not a routine audit request given poor recent performance.  We need to get answers and don't have them currently.  Any certification report from them would need to have enough transparency (and evidence of working toward goals) to provide adequate quality assurance.

 

It sounds like you've not really identified the problem statement.  So for example, your first post said the supplier refused to let you audit their facility and operations but is that really the problem?  If you'd not had quality issues would you want to audit?  No you've admitted yourself it's not routine so why is an audit the answer to a quality issue?

 

So for me, the problem statement is "there have been xxx quality issues with this supplier and we have not had any progress in resolution" and the next steps are to find out why.  For me that's not achieved in an audit.  An audit has all the connotations of confrontation etc, it's wide ranging and not specifically focused.  What would be better would be to ask for a technical meeting.  In this perhaps you can start to work on root cause analysis together with the supplier team and that could include visiting the production area.  But it's a focused visit based on the problem you have, not punitive but trying to find out why.

 

Then of course if they reject that request it's clear they don't want to resolve the issue or they have something to hide but for me it's not an audit you need and to build relationships with this supplier for mutual benefit it seems a more cooperative approach is called for?  That still may feel intimidating to them but at least it's more open and collaborative than saying "we need to audit you!"



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#10 QAGB

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Posted 12 September 2019 - 02:18 PM

It sounds like you've not really identified the problem statement.  So for example, your first post said the supplier refused to let you audit their facility and operations but is that really the problem?  If you'd not had quality issues would you want to audit?  No you've admitted yourself it's not routine so why is an audit the answer to a quality issue?

 

So for me, the problem statement is "there have been xxx quality issues with this supplier and we have not had any progress in resolution" and the next steps are to find out why.  For me that's not achieved in an audit.  An audit has all the connotations of confrontation etc, it's wide ranging and not specifically focused.  What would be better would be to ask for a technical meeting.  In this perhaps you can start to work on root cause analysis together with the supplier team and that could include visiting the production area.  But it's a focused visit based on the problem you have, not punitive but trying to find out why.

 

Then of course if they reject that request it's clear they don't want to resolve the issue or they have something to hide but for me it's not an audit you need and to build relationships with this supplier for mutual benefit it seems a more cooperative approach is called for?  That still may feel intimidating to them but at least it's more open and collaborative than saying "we need to audit you!"

 

 

This is true - but I think a number of customers use this tactic. There are customers that want to do their routine yearly audit as required by their own company policy. Then there are customers that will tell you that they audit you on a "risk-based" frequency. That risk is decided by the customer, so usually it's due to volume, product type, and/or complaints. I have had at least one customer come in to conduct an audit because they were unhappy with a particular issue, and they really wanted to understand our manufacturing and confirm our process (not so much come in and yell at us for doing things incorrectly).

 

I also agree that another way to handle it is to have a technical meeting. I've had both good and bad experiences with those as well, so it really depends on how Matthewcc wants to handle it. Audits can be collaborative; I always used them as a time to understand my suppliers' processes. I want to see their successes and their challenges, and to understand why they do what they do. Plus it goes along way for showing you are using your supplier approval process.



#11 matthewcc

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Posted 12 September 2019 - 02:22 PM

It sounds like you've not really identified the problem statement.  So for example, your first post said the supplier refused to let you audit their facility and operations but is that really the problem?  If you'd not had quality issues would you want to audit?  No you've admitted yourself it's not routine so why is an audit the answer to a quality issue?

 

So for me, the problem statement is "there have been xxx quality issues with this supplier and we have not had any progress in resolution" and the next steps are to find out why.  For me that's not achieved in an audit.  An audit has all the connotations of confrontation etc, it's wide ranging and not specifically focused.  What would be better would be to ask for a technical meeting.  In this perhaps you can start to work on root cause analysis together with the supplier team and that could include visiting the production area.  But it's a focused visit based on the problem you have, not punitive but trying to find out why.

 

Then of course if they reject that request it's clear they don't want to resolve the issue or they have something to hide but for me it's not an audit you need and to build relationships with this supplier for mutual benefit it seems a more cooperative approach is called for?  That still may feel intimidating to them but at least it's more open and collaborative than saying "we need to audit you!"

I should have mentioned that we've tried that.  I'm very mindful when I talk to them that I don't want to be confrontational, punitive, or intimidating, but the supplier has been mostly unresponsive or resistant.



#12 GMO

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Posted 12 September 2019 - 03:38 PM

I should have mentioned that we've tried that.  I'm very mindful when I talk to them that I don't want to be confrontational, punitive, or intimidating, but the supplier has been mostly unresponsive or resistant.

 

Ah.  Then I suggest you walk away.  If they're not prepared to investigate the quality issue themselves nor collaborate with you then what do you have left?  All you can use is commercial arguments which eventually includes saying goodbye.  I'd get the alternative lined up though before you tell them and not be swayed by any argument to stay.



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#13 zanorias

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Posted 12 September 2019 - 04:57 PM

If alternative suppliers for the product(s) are feasible I would look down that route, this supplier seems uncooperative at the least. Also not ideal in a potential situation i.e. trace/recall if you need to rely on them. 







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