A Supply Chain Audit

We will now focus on steps involved in completing an audit of a supply chain ([59]). The goals of this supply chain audit are to (1) understand the architecture of the current supply chain and (2) identify potential sources for improvement. 

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But before approving the expansion, Industrial s management wanted a supply chain audit of the entire system. This meant an analysis of all physical and informational flows throughout the system. Industrial wanted a complete analysis of every step in the supply chain, inside and... 

The first step in a supply chain audit is to map chain structure and ownership as well as associated flows of physical products and information (orders) between members of the supply chain. The role of a supply chain map is to get a picture of the overall supply process and where the particular retail store fits. It reminds the manager that the current supply sources may need to evolve as the product characteristics change. 

The next step in a supply chain audit is to examine how capacity is deployed by understanding its product-based allocation, which is related to design choices across locations and product types and across locations. Thus, we will first consider how products can be separated based on their demand volumes and consequent impact on capacity requirements. The next step will be to consider if product design specifications can be standardized to improve supply chain performance. Finally, the impact of a consolidation warehouse on required capacity will be considered. 

This example suggests that supply chain costs can be decreased by adjusting the supply process to match product characteristics. Thus, in this step of a supply chain audit, the question is Are the supply chain capacity and its deployment tailored to product characteristics If not, how can supply chain costs be reduced by such adjustments ... 

This chapter focused on examples of supply chains and their underl dng supply chain architecture, using a Four C conceptual framework. The Four Cs refer to chain structure and ownership, capacity, coordination, and competitiveness. The supply chain audit permits an understanding of current choices and an approach to evaluate alternate choices for supply chain architecture. The goal of this chapter was to explain the Four C choices made in different successful supply chain contexts. 

The open and seamless lines of communication that often exist between supply chain partners tend to have a leveling effect on the IT security posture of all involved. Just because your firm takes information security seriously, it should not be assumed that partners do the same. Twelve percent of the respondents in our study reported terminating a relationship with a supply chain partner over security concerns. Treat interconnected IT systems as a special case of the untrusted network. Audit and protect it accordingly. 

For medical devices, inspectors expect to see a process improvement program in place encompassing all activities within the supply chain, including the systems that support it. Activities that would provide evidence that such a program is in place include the implementation of documented processes such as Corrective and Preventative Action (CAPA), self-inspection, and internal audits." Organizations should ensure that where an SOP has been put in place to initiate a process improvement activity, the SOP is adhered to. For example, if a quality audit SOP states that all areas shall be subject to audit at least once every 2 years, then inspectors will expect to see evidence that this has been the case. Failure to do so is likely to result in a citation similar to that issued to Krieger Medical, Inc. ... 

A good transportation risk management system includes periodic audits of the management system, its technical elements, and compliance across the supply chain. The purpose of an audit program is to provide feedback on transportation risk management efforts to improve or enhance current operations such as determining ... 

Salama K, Luzzatto D, Sianesi A, Towill D (2009) The value of auditing supply chains. Int J Prod... 

Audit supply chain partners before, during, and after establishing a collaborative relationship. Amazingly, many firms link themselves to partners without knowing anything about their security posture orprac-tices. Thirty-seven percent of firms never audited their supply chain partners, and only 23% of the firms in our study audited prior, during, and after a partnership. 

Grazyna Wieteska is Assistant Professor of Business Administration at the University of Lodz. She has several years business experience in the area of B2B relationship management and risk management. Since 2007 she has been employed at the Unit of Operational Processes Excellence at her home university. She lectures on supply chain risk management, business continuity management and logistics audits at a variety of business schools in Poland and abroad. 

Fahmy Salama et al. (2009) Supply chain and operations audits represent a fundamental step for systematically capturing market changes and for adequately supporting impovement projects in this way. 

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