Customer Audit Eligibility: Minimum Requirements & Best Practices
Hi everyone,
I would like to ask if there any general guidelines or industry practices when it comes to allowing customers to conduct audits at our facility.
For example, do companies typically set a baseline - such as the customer's annual sales volume or order size - to determine whether a customer is eligible to conduct an audit?
Appreciate if anyone could share their company's approach or my best practice in this area. Thank you.
Hi Carine
In my experience audits are conducted if there is no accreditation (are you accredited) and the customer isn't happy with the SAQ completed or if you have had on going issues of sending out poor quality products. Have they explained the reason for auditing you?
yes, we are accredited. No reason was given for the audit. In this case, any reason given to reject their audit
It might be worth asking why they want to audit? Are you included in all the conversations? could it be a commercial reason to understand your capabilities and opportunity to do more work with you?
Good morning, Carine. I absolutely set a threshold for customer audits. This is typically discussed with upper management and sales and then agreed upon by pertinent parties involved. You are going to have to find the correct balance that works for your facility and team. You might find that it's best if sales is the one that tells the customer they don't meet the criteria when a request is made below threshold, sometimes quality will have to do that.
But if you have a wide range of customers with a wide spectrum of purchase levels, you should set a threshold for audits.
I'm going to play the devil's advocate
How much is their business worth to you? We are audited quarterly by CFIA and annually for SQF....................we still have 3 customer audits/year and those are non negotiable------if you want that business, it's part of the package
Yup, we base it on how much you mean to us. Oddly enough, it seems like the little customers squeak the most. In my experience larger customers aren't as needy and trust the GFSI cert as proof we're walking the walk.
We don't have a specific number as a threshold, but unless you're one of our biggies, we're not doing it, and even then we push back most of the time. I think we've had 2 or 3 customers through our building in my 20 years here?
Yup, we base it on how much you mean to us. Oddly enough, it seems like the little customers squeak the most. In my experience larger customers aren't as needy and trust the GFSI cert as proof we're walking the walk.
We don't have a specific number as a threshold, but unless you're one of our biggies, we're not doing it, and even then we push back most of the time. I think we've had 2 or 3 customers through our building in my 20 years here?
I had one who purchased 2 LTL's over a 2 year period and then sent me an itenerary for their company employee to come audit my facility as well as an estimate of me paying their salary, airfare from Mexico (we were in Houston but still), and their meals/lodging.
Customer audits are a pain in the neck and from your post I'm guessing these aren't on of your big ones- do they spend enough with you throughout the year to make it worth a day of your time? If not, perhaps offer them a half day audit to include a tour of the facility and a cursory glance through your critical documentation and they can take it or leave it
Current company sells to a couple of large retail customers, and they pretty much dictate they get to audit (or cutsey way of saying it is "visit") whenever they want or they'll take their millions in purchases elsewhere.
Back at my first spice job, we got the small company through SQF to eliminate 10+ customer audits each year. They still got audited by a couple of the big-big customers we had, but they started telling the smaller ones that any on-site audits would only be done if they accepted a $3,500 fee to come audit us. Couple of them agreed and went for it anyway, others decided that a few copies of our programs atop our SQF audit was suddenly acceptable. This was 12-13 years ago and I think those companies just hadn't updated their SOP's to accept GFSI audits as part of their supplier approval.
Hi, could you pls share ur threshold for mine reference.
Good morning, Carine. I absolutely set a threshold for customer audits. This is typically discussed with upper management and sales and then agreed upon by pertinent parties involved. You are going to have to find the correct balance that works for your facility and team. You might find that it's best if sales is the one that tells the customer they don't meet the criteria when a request is made below threshold, sometimes quality will have to do that.
But if you have a wide range of customers with a wide spectrum of purchase levels, you should set a threshold for audits.
Hi, could you pls share ur threshold for mine reference.
It's been different at each facility I've worked. It will vary depending on comfort level of ownership/management/sales, as this should be primarily a business decision. i've always based it on total purchases (volume) from the previous year. If you have a customer that purchases 20% of your total sales annually, you're not going to want to even suggest to them that their business isn't enough to warrant a day long audit. If you have a customer that comprises <2% of your annual sales, do you really want to be tying up a day or two putting you behind on things that could be taking you away from your bigger or more profitable customers?
I work for a packaging manufacturer and most of the customer requirements we receive state that we need to be open to them auditing us. We generally won't say no but will push back if the requested dates are not convenient. We have also taken to stating we are open to 2nd and 3rd party audits AT THE CUSTOMER'S EXPENSE. We are already paying for GFSI (BRC) certification, if that's not good enough then you can pay for someone else to audit us.