In my previous blog posts in this trilogy about audits, I already discussed the first party audit and the third party audit.
I deliberately saved the second party audit for last. Why? Read more to find out!
The definition of a second party or a customer audit is an audit conducted by an external audit organisation or an internal auditor of your customers’ organisation. Both of the auditors will conduct the audit on behalf of your customer.
The aim of a second party audit is to obtain a qualitative supply chain that meets consumer needs by verifying all current and future suppliers.
The second party audit can be conducted by two types of auditors. The first type being company auditors, or auditors that are employed by your customer. The issue that rises with audits conducted by company auditors, is the same as we discussed with the third party audits by certification auditors, namely the commercial relationship between your company and the auditor.
The internal pressure that the company auditor experiences of its own organisation can be enormous.
A common issue with company auditors is the internal pressure the purchasing department puts on their own auditor: “This is our biggest supplier for this specific material and there aren’t many alternatives, so it’s necessary for you to approve their supply.”
The purchasing department isn’t the only source for the internal pressure on the company auditor. The pressure can also come from the marketing department: “We already invested a lot of money in this supplier and we already purchased a piece of equipment in order to make our future product. As we’ve already invested, our supplier needs to get approved. If you don’t approve them, we might lose a lot of money that we already put into the investment.”
The internal pressure on company auditors might be much bigger than you’d expect. On top of that, their internal pressure might even impact their added value to improve your management system.
The second type of customer auditors are the contracted audits, which can be divided into two subcategories. The first type of contracted audits are audits by certification organisations that conduct audits on behalf of your customer. And as you might know from the blogpost about third party audits, these also might be freelancers doing audits on behalf of the certification organisation.
The difficulty with customer audits performed by this type of auditors is that when you already own one of their certifications, it will be difficult to obtain a non-biased audit.
The second type of contracted audits are the ones that are conducted by an independent auditor. These types of auditors are contracted by your customer, but are not connected to certification organisations in any way. This means they will give you the best chance for improvement.
Independent auditors are the type of auditors that really represent the customer, because you share the same customer. On top of that, the auditor will try to give you a clear and objective view on how you work and where your improvement opportunities lie.
On top of that, there is no financial gain for this independent auditor. No matter what the findings will be after the audit is finished, the auditor’s earnings remain the same.
As I mentioned in the introduction, I deliberately left his audit to the last blog post in this trilogy, because these types of audits will add the most value to your management system.
Why is this the case?
The auditor who will conduct the customer audit has probably already seen various processes in different companies from different industries and different regions. The second party auditor is allowed to give you advice to improve your management system. The auditor’s acquired knowledge and experience will help him or her take a look at your management system from different angles.
On top of that, your customers have an audit standard based on their certification standard, combined with other requirements your client finds very important. This means the customer audit actually goes beyond the third party audit which means they already challenge you in doing better.
Are you considering a supplier audit? Don’t hesitate to contact me for more information!
Do you want to read more about audits? Make sure to read part one and part two of this blog post series!