Auditing suppliers – definition, objectives, content and execution of supplier audits
Assessing existing or new suppliers is a business-critical process for every company, as you usually commit yourself contractually to a business partner for a certain period. Because the quality and reliability of the supplier come before your own value chain, problems arising there almost inevitably spread into your own business.
If deliveries stop, production quickly comes to a standstill. Finding alternatives usually increases costs significantly, and undetected quality defects end up in your own goods and services. This is doubly critical, because you usually have to bear the dissatisfaction of your own customers – or follow-up problems when you yourself are the supplier – alone.
A supplier audit is therefore a sensible, targeted tool for avoiding or minimising future problems through the regular assessment of suppliers. Compared with many other types of audit, auditing suppliers even has a small advantage: the target state is at least partly known – namely the contractually agreed performance and quality. Keeping this target state as the actual state in the long term can be secured with many proven quality management tools and optimised through regular supplier audits.
Supply chain due diligence legislation – such as the German Supply Chain Due Diligence Act (LkSG) – has made the supplier audit even more important. It is no longer only about limiting direct economic risks, but also about legal and reputational consequences: companies share responsibility – at least partially – for ethical, social and environmental misconduct by their suppliers.
Last but not least, monitoring and controlling suppliers has a firm place in many important standards (e.g. ISO 9001, ISO 13485). Even if they usually do not specify concrete points, the focus is on aligning QM systems and on the qualification and competence of the employees concerned.
Definition: what is a supplier audit?
A supplier audit is a systematic assessment and review of a supplier by a company that purchases its products or services. The aim of the audit is to ensure that the supplier complies with defined quality, safety, environmental or compliance standards.
Objectives of supplier audits
Supplier audits are intended to reduce your own risks – in the past mainly economic, today increasingly legal and ethical as well. At the beginning of the production chain there are often suppliers in other countries whose standards on working conditions, environmental protection or quality do not automatically match your own. Supply chain legislation has sharpened this view further.
Auditing suppliers for supplier evaluation
The objectives of a supplier audit vary depending on the reason for carrying it out. For existing suppliers, a supplier evaluation ensures that the contractually agreed services correspond to the actual state and will remain secure in the foreseeable future.
Supplier audit for supplier selection
When looking for new suppliers, an audit is a suitable means of targeted supplier selection and evaluation. The aim is to achieve the desired future state under the best possible conditions – in terms of quality, quantity or cost.
Optimising supply chains with supplier development
In supplier development, audits focus more on improvement and optimisation: better risk management and possibly the expansion of existing business relationships. Auditing the supplier can reveal this potential in a targeted way.
Content of supplier audits
Traditionally, a supplier audit is primarily a product or process audit. The aim is to determine and assess the quality of goods or services and – where possible – to ensure improvement. The desired product quality must, of course, also be measured against your own financial and economic possibilities. The higher the value of your own products and services, the higher the quality criteria that must be applied to suppliers.
If a supplier audit includes a system audit, it can evaluate how well the supplier’s quality management system works and whether the supplier controls its own suppliers properly. In technology-intensive sectors such as the automotive industry or mechanical engineering, system audits are an integral part of the overall assessment.
Process audits can also be part of a supplier audit and are gaining importance with supply chain legislation. The focus is then not only on easily measurable criteria (quality, price, availability …), but also on how well the supplier masters its own processes and can implement and control contractually required processes. Factors that are harder to measure come to the fore – environmental aspects or other social and ethical requirements (e.g. hygiene, data protection, compliance …).
Supplier audits and ISO 9001
ISO 9001 requires in clause 8.4 that you select, evaluate and monitor external providers according to defined criteria. A supplier audit is an effective means of doing this, but not the only one – depending on the risk, self-assessments, incoming inspections or performance indicators may also be sufficient. More on the standard on our page on setting up a QM system according to ISO 9001.
Differences from certification audits
A supplier audit is a classic monitoring audit and is therefore usually less time-consuming and smaller in scope than a certification audit. Follow-up audits usually also require less staff and time.
In contrast to certification, the focus here is more on providing an overview and an assessment. In addition to pure “fulfilled / not fulfilled” requirements, a supplier audit also contains more quantifiable points, for example on machinery, the number and qualification of employees or the information security applied.
Supplier audit, customer audit, certification audit – the terms
If you audit your supplier yourself, this is a supplier audit (second-party audit). From the supplier’s point of view, the same audit is a customer audit. A certification audit, on the other hand, is carried out by an independent certification body (third-party audit). Internal audits examine your own organisation (first-party audit).
If you have a customer audit coming up, targeted preparation pays off: evaluate customer requirements and previous audit results, provide evidence and prepare the employees involved for the interviews. We support you with this too.
Planning and conducting a supplier audit – how is a supplier audit carried out?
Information and documents are already exchanged intensively during the preparation of supplier audits. In addition to initial meetings, documents such as certificates, specifications, internal rules and standards or employment contracts can already provide a good overview. Some of the desired criteria can thus be transferred directly into checklists, which then only need to be verified in practice during the audit. Often – in an increasingly global economy – personal visits by the audit team are no longer essential, and the audit can be carried out using modern remote techniques. This is a major advantage, especially with suppliers abroad.
The audit results in an audit report, which is used for the specific supplier evaluation and allows comparison with other potential partners. This requires a certain uniformity of the evaluation criteria applied.
A positive supplier evaluation can, of course, also be used as a basis for further optimisation to secure the established state in the long term.
Requirements for the supplier auditor
Supplier auditors need audit competence according to ISO 19011, knowledge of the relevant standards and of the supplier’s products and processes. In the automotive industry, IATF 16949 (clause 7.2.4) requires demonstrated competence of second-party auditors; for process audits, VDA 6.3 is the benchmark. We carry out supplier audits for you or train your auditors.
Supplier audits abroad: USA, Asia, India
For overseas suppliers, travel costs and time are often the reason why audits do not take place. Remote or hybrid audits close this gap: part of the audit – documents, interviews, a live tour of production – takes place via video, and critical points are checked specifically on site. With our patented iVision® remote audit solution we carry out supplier audits worldwide.
Auditing suppliers under supply chain due diligence laws
While auditing suppliers used to be driven mainly by economic and quality reasons – improving your own product quality, reducing procurement costs, preventing supply shortages – legal reasons are now often added. The German Supply Chain Due Diligence Act (LkSG) has applied since 2024 to companies with 1,000 or more employees in Germany. An amendment – including the abolition of the reporting obligation and fines only for serious violations – is in the legislative process. At EU level, the scope of the Corporate Sustainability Due Diligence Directive (CSDDD) has meanwhile been limited to very large companies.
For suppliers, little changes: large customers pass on their due diligence obligations contractually – for example through codes of conduct, self-assessments and social audits. Those who are prepared make auditing their own suppliers an integral part of quality management. The current legal situation is decisive in each case; this text does not replace legal advice.
Supplier audit checklist – step by step to a successful supplier audit
| Audit phase | Checkpoints | Status |
|---|---|---|
| 1. Preparation | Define the objectives and scope of the audit | ⬜ |
| Put together the audit team | ⬜ | |
| Prepare the audit plan (incl. timing & responsibilities) | ⬜ | |
| Analyse previous audit results | ⬜ | |
| Prepare the questionnaire / checklist | ⬜ | |
| Agree the audit date with the supplier | ⬜ | |
| Request documents from the supplier | ⬜ | |
| 2. Execution | Welcome & introduction of the audit team | ⬜ |
| Explain the procedure and objectives | ⬜ | |
| Tour of production & warehouse | ⬜ | |
| Check the QM system & certificates | ⬜ | |
| Interview specialist staff | ⬜ | |
| Review documents & evidence | ⬜ | |
| Record nonconformities and potential | ⬜ | |
| 3. Follow-up | Prepare the audit report | ⬜ |
| Agree an action plan with the supplier | ⬜ | |
| Define implementation deadlines | ⬜ | |
| Plan re-checks / follow-up | ⬜ | |
| Document results (e.g. in the ERP system) | ⬜ | |
| 4. Avoid mistakes | Unclear audit objectives | ⚠️ |
| Insufficient preparation | ⚠️ | |
| Missing documentation | ⚠️ | |
| No tracking of actions | ⚠️ |
Safer and better supply and value chains – with PeRoBa® Unternehmensberatung GmbH
Experience and practical expertise are the reasons why PeRoBa® Unternehmensberatung GmbH has a large customer base, particularly in the demanding automotive and mechanical engineering sectors. In these industries, more than anywhere else, the supply chain must be under control – because failures and problems cost a great deal of money and reputation.
We are not just a consultancy, but actively advance quality management with our own developments. Our patented iVision® software is a proven system for remote audits and further teleworking processes. Whether with a laptop, smartphone or smart glasses, iVision® integrates smoothly into existing software landscapes – including for supplier audits and the challenges of supply chain legislation.
Book a free, no-obligation initial consultation or call us: +49 8106 / 2308992.
Quality is a philosophy and our passion.
Frequently asked questions about supplier audits
What is a supplier audit?
A supplier audit is a tool for regularly assessing existing or new suppliers. It helps to avoid or limit future problems in the cooperation.
Why are supplier audits important?
Problems at the supplier have a direct impact on your own value creation: supply failures can bring production to a standstill, alternative sourcing increases costs, and undetected quality defects end up in your own products and services.
What makes auditing suppliers easier?
The target state is at least partly known: the contractually agreed performance and quality. Maintaining this state over time can be secured with proven quality management tools and improved through regular audits.
What role do supply chain due diligence laws play?
They extend the view beyond economic risks to legal and reputational consequences: companies share responsibility for ethical, social and environmental misconduct in their supply chain. Supplier audits help to identify these risks.
What is the difference between a supplier audit and a customer audit?
It is the same audit from two perspectives: if you audit your supplier, you carry out a supplier audit (second-party audit). For the audited supplier, it is a customer audit.
Can a supplier audit be carried out remotely?
Yes, fully or partly. Document reviews, interviews and live tours via video are particularly suitable for suppliers abroad; critical points are checked on site if necessary (hybrid audit).
About PeRoBa®:
PeRoBa® Unternehmensberatung GmbH has specialised in management systems since 1991. The company has been headquartered in Baldham since 2011 and also maintains an office on Prinzregentenstraße in Munich. PeRoBa® advises, audits and assesses to support clients in introducing and implementing their management systems, and also offers audits, QM training, seminars and workshops. Since January 2016, the in-house, patented software iVision® – Smart Remote Audit Solution has been on the market.
Dr. Roland Scherb is the founder and Managing Director of PeRoBa® Unternehmensberatung GmbH, certified to DIN EN ISO 9001, ISO 14001 and ISO 27001 and based in Baldham. He is President of the Bundesverband der Auditoren e. V. (German Federal Association of Auditors), head of the ISO Certification Competence Forum at BVMW e. V. (German Association for Small and Medium-sized Businesses) and a member of the DIN working committee NQSZ NA 147-00-07 GA on the revision of DIN EN ISO 19011. He is also a book author as well as a trainer and lecturer at renowned educational institutions on management systems and the associated core methods.
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