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What Are the Benefits of Supplier Quality Audits?

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What Are the Benefits of Supplier Quality Audits?

What Are the Benefits of Supplier Quality Audits?

While you want to trust and count on your suppliers, do you really know for sure that they have the proper procedures in place, that the procedures are being actively applied, and that their employees follow their established procedures?

Supplier quality audits are the process of verifying that each of your suppliers is adhering to both industry standards as set by the law and independent organizations, as well as your own company and brand standards.

Audits are widely recognized as a pertinent part of doing business.

While there are many reasons for this practice, here are the six biggest benefits of performing supplier quality audits.

1. A Reduction of Risk

A significant amount of risk accompanies extended supply chains, outsourcing, and globalization. The risks include:

  1. Quality
  2. Safety
  3. Business Continuity
  4. Reputation
  5. Cost Volatility
  6. Supply Disruption
  7. Non-Compliance Fines
  8. Safety Incidents
  9. And More

2. Better Contractor Management and Business Relationships with Suppliers

Your business can gain ground when costs are reduced, contractor management is streamlined, brand reputation is protected, and long-term profitability is achieved. This is easier done when the following tasks are taken care of efficiently:

  1. Supplier Prequalification
  2. Supplier Audits
  3. Worker Management
  4. Insurance Monitoring
  5. Analytics

3. Expert Guidance on Safety and Sustainability Performance

While you already have strategies in place to manage the health, safety, and behaviors within your own organization, how do you know your suppliers, contractors, and vendors are similarly motivated?

Supplier quality audits actively foster an aligned culture of health and safety through:

  1. Contractor Prequalification
  2. Document Management
  3. Auditing
  4. Employee-Level Qualification and Training
  5. Insurance Verification
  6. Business Intelligence

4. Closer Alignment with Your Compliance Standards

Your business is under pressure to maintain compliance with:

  1. Country-specific regulations
  2. Industry standards and regulations
  3. Corporate policies and standards

5. Better Procurement Decisions

Procurement teams are under a lot of pressure to find, qualify, monitor, and manage suppliers, all while lowering the cost of doing so. With supplier quality auditing, procurement managers can make better and more cost-effective procurement decisions by:

  1. Mitigating risk through communication, evaluation, selection, and monitoring services.
  2. Gaining unprecedented visibility into safety statistics, risk profiles, and historical data.
  3. Reducing lead time and improving efficiency with ongoing guidance and support throughout the procurement process.
  4. Maximizing data quality on the entire supply chain.

6. Sustainable Business Practices

Today, an organization committed to improving the environment through sustainable growth is required to meet both regulatory requirements and societal expectations. Managing the long-term value of your company and its brand is party dependent on properly managing the environmental, social, financial, and economic impacts throughout its supply chain. All of this can be done more easily with thorough supplier quality audits.

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How To Improve Supply Chains With Machine Learning: 10 Proven Ways

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Bottom line: Enterprises are attaining double-digit improvements in forecast error rates, demand planning productivity, cost reductions and on-time shipments using machine learning today, revolutionizing supply chain management in the process.

Machine learning algorithms and the models they’re based on excel at finding anomalies, patterns and predictive insights in large data sets. Many supply chain challenges are time, cost and resource constraint-based, making machine learning an ideal technology to solve them. From Amazon’s Kiva robotics relying on machine learning to improve accuracy, speed and scale to DHL relying on AI and machine learning to power their Predictive Network Management system that analyzes 58 different parameters of internal data to identify the top factors influencing shipment delays, machine learning is defining the next generation of supply chain management. Gartner predicts that by 2020, 95% of Supply Chain Planning (SCP) vendors will be relying on supervised and unsupervised machine learning in their solutions. Gartner is also predicting by 2023 intelligent algorithms, and AI techniques will be an embedded or augmented component across 25% of all supply chain technology solutions.

The ten ways that machine learning is revolutionizing supply chain management include:

  1. Machine learning-based algorithms are the foundation of the next generation of logistics technologies, with the most significant gains being made with advanced resource scheduling systems.
  2. The wide variation in data sets generated from the Internet of Things (IoT) sensors, telematics, intelligent transport systems, and traffic data have the potential to deliver the most value to improving supply chains by using machine learning.
  3. Machine learning shows the potential to reduce logistics costs by finding patterns in track-and-trace data captured using IoT-enabled sensors, contributing to $6M in annual savings.
  4. Reducing forecast errors up to 50% is achievable using machine learning-based techniques.
  5. DHL Research is finding that machine learning enables logistics and supply chain operations to optimize capacity utilization, improve customer experience, reduce risk, and create new business models.
  6. Detecting and acting on inconsistent supplier quality levels and deliveries using machine learning-based applications is an area manufacturers are investing in today.
  7. Reducing risk and the potential for fraud, while improving the product and process quality based on insights gained from machine learning is forcing inspection’s inflection point across supply chains today.
  8. Machine learning is making rapid gains in end-to-end supply chain visibility possible, providing predictive and prescriptive insights that are helping companies react faster than before.
  9. Machine learning is proving to be foundational for thwarting privileged credential abuse which is the leading cause of security breaches across global supply chains.
  10. Capitalizing on machine learning to predict preventative maintenance for freight and logistics machinery based on IoT data is improving asset utilization and reducing operating costs.

Read more at How To Improve Supply Chains With Machine Learning: 10 Proven Ways

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