Supplier Audit
Definition
A structured on-site or remote assessment of a supplier's processes, quality systems, capacity, and compliance against defined standards.
In Practice
Supplier audits verify that what a supplier claims matches reality. Auditors examine quality management systems, process controls, equipment condition, material traceability, labor practices, and business continuity plans, scoring findings against a checklist derived from standards such as ISO 9001 or the buyer's own requirements. Audits happen at qualification, on a routine cycle for critical suppliers, and after serious quality or delivery failures.
Findings are classified by severity, and suppliers must submit corrective action plans with deadlines. A pattern of unresolved findings is a leading indicator of future supply problems, often visible months before deliveries actually fail.
Example: an aerospace buyer audits a casting supplier and finds calibration records missing on key measurement equipment, a major nonconformance. The supplier fixes it within thirty days. Two years later, that same discipline shows up in the supplier's near-zero defect rate on flight-critical parts.
Related Terms
The formal process of verifying that a prospective supplier can reliably meet quality, capacity, financial, and compliance requirements before awarding them business.
Supplier ScorecardA periodic report that grades a supplier's performance against agreed metrics such as on-time delivery, quality, cost, and responsiveness.
Supplier Relationship ManagementThe systematic practice of segmenting suppliers, managing performance, and collaborating with strategic ones to extract more value than transactional buying alone can deliver.