SUPPLIER AUDITING (The 5 minute rule)

ATTITUDE IS EVERYTHING
There are lots of articles, how to books, directions, edicts, etc. about HOW TO PERFORM A A!"#T$,
but none that # ha%e read effecti%el& touch on an area that # consider essential to a 'ualit& s&ste( and an
audit. An article b& M&ron Tribus )*ud+in+ the ,ualit& of an Or+ani-ation b& "irect Obser%ation. in the
/o%e hel0ed 0ush (e to write this. #t is so(ethin+ that # ha%e thou+ht about for a lon+ ti(e1 finall& ha%e
a for(at in which to e20ress it. Thank &ou Marc for this foru(.
,34555 and other con%entional ,ualit& s&ste(s are inade'uate to 'uantif& the (ost i(0ortant as0ect of
'ualit&, attitude. E%er& 'ualit& s&ste( that # ha%e seen tries to (andate what would be there an&wa& if a
su00lier had a stron+ custo(er focus. The& do a e2cellent 6ob of talkin+ around the issue but do not
address it directl&. As with (ost correcti%e actions that we see as 'ualit& 0rofessionals, the current 'ualit&
s&ste(s deal with the s&(0to(s, not the real root cause of the situation, ATTITUDE.
M& (entor in ,ualit& Auditin+ )Ada( 7reen, 89 &rs. a+o. had +reat instincts for a 'ualit& s&ste( that
were de%elo0ed o%er (an& &ears and refined durin+ hundreds of su00lier audits. :efore one su00lier
audit, he said # can tell within 9 (inutes if the su00lier is +oin+ to 0ass the audit.$ # loudl& disa+reed
sa&in+ that this 6ud+(ent cannot be (ade 0urel& on how a rece0tionist +reets us and b& the first
handshake. The e%aluation has to be based on ob6ecti%e e%aluation of the su00liers; confor(ance to the
'ualit& re'uire(ents )at that ti(e it was M#<=#=>985? @ M#<=,=4?9?.. He si(0l& said, #f &ou are in this
lon+ enou+h &ou will know what # (ean.$ )The 0eriodic audits were a re'uire(ent of our s&ste( and we
audited A+ood; su00liers as often as ones with 0roble(s..
# ca(e u0on a dile((a that hel0ed (e to (ore clearl& define this 0roble(. On subse'uent da&s # did two
local M#<=# audits. The first was at a (ediu( si-ed su00lier that had so(e 0roduct 'ualit& 0roble(s.
The& 0assed the audit easil&, 0ro%ided what a00eared to be ade'uate correcti%e actions, but continued
ha%in+ 0roble(s with 0roduct 'ualit& and had little concern about on=+oin+ i(0ro%e(ent of the 'ualit& of
0roduct. We e%entuall& 0ulled out of the su00lier due to on=+oin+, unresol%ed 0roble(s. Modern sho0,
+ood instructions, but the owner;s son )takin+ o%er the business. would (ake decisions to o%erride 'ualit&
and workers; concerns. The workers +ot to the 0oint that their attitude chan+ed )for the worse. in
res0onse to the new owner.
The ne2t da& # went to another su00lier1 located the tin& sho0 down an alle& )B (en in a +ara+e behind
one of the owner;s ho(es.. This su00lier had ne%er shi00ed us nonconfor(in+ 0roduct, we ne%er had a
'uestion as to the 'ualit& of 0roduct or ser%ice recei%ed. Howe%er, the& did not ha%e a docu(ented
ins0ection or 'ualit& s&ste(. )Prescribed that the& de%elo0 an ins0ection s&ste( to co(0l& with M#<=#
re'uire(ents.. The& a+reed wholeheartedl& but needed hel0. The& were local so # was able to work with
the(. Within two (onths, the& had a co(0liant s&ste(. The& went on to ca0ture (ore business and the
last # heard the& had a thri%in+ (ediu( si-ed sho0 +oin+. Had # onl& +raded the( on their lack of
docu(entation )as re'uired b& an& res0ectable auditin+ or+ani-ation. the& would not ha%e re(ained a
su00lier. :ut # was i(0ressed with their attitude. The& e20ressed a sincere desire to do a better 6ob for
their custo(ers. # held off issuin+ (& re0ort until there was 0ro+ress to re0ort, 0urel& on the 0ositi%e
attitude of the 0eo0le.
The 0oint here is the difference in attitude. One sho0 had alread& ca0tured the business but failed to
(aintain an attitude of custo(er ser%ice. The other ended u0 ca0turin+ (ore business because of their
0ositi%e attitude towards custo(er ser%ice. Positive Attitue is the !root "#use$ o% e&"ellen"e
in # 'u#lit( s(stem. o (atters how well written the (anual or 0rocedures are, if the attitude of
or(an :lack 9 Minute Rule 0+ C of >
e2cellence is not behind e%er& word, then the 'ualit& s&ste( will be of little %alue. This attitude (ust
flow fro( the to0 down.
O%er the course of hundreds of su00lier %isits, Ada(;s A9=(inute rule; has +one throu+h (& (ind (an&
ti(es and # ha%e tried to ob6ecti%el& define what +oes into this sub6ecti%e e%aluation. #t is difficult to
e2actl& define what to look for, since it is the Atotal e20erience; that creates the i(0ression. :elow are
thin+s that # ha%e learned to look for durin+ su00lier %isits and 'ualit& audits and so(e of the tricks that #
use to know what 'uestions to ask, and how # ha%e learned to inter0ret the answers.
Initi#l )hone "#ll or "ont#"t*
"oes the su00lier take +enuine interest in the intent of the audit or %isitD #f the %isit is in res0onse to a
defect or 0roble( &ou will be controllin+ the tone of the initial contact, be constructi%e and 0ositi%eE #f
the 0ur0ose of the %isit is an audit for 0ossible new business, then the tone should be for(al and
structured.
For a first ti(e %isit to a su00lier # ask for the( to fa2 directions. Often the su00liers with a stron+er
Acusto(er attitude; ha%e this readil& a%ailable and si(0l& need to know which direction that &ou are
co(in+ fro(.
# also ask for %erbal directions, which # co0& into (& 0lanner so that no (atter what, # ha%e what is
needed.
Arriv#l #t su))lier$s %#"ilit(
Arri%e earl&, walk in the door 0recisel& on ti(e and if &ou are in the area the e%enin+ before take a ride
b&, &ou could learn so(ethin+ interestin+. E2a(0leF do the& run a full second shift, are a bunch of newer
cars there late )could be last (inute re%iew b& (ana+e(ent of the 'ualit& s&ste( G What should the& be
concerned about if the& ha%e a stron+ 'ualit& s&ste(D., are trucks bein+ loaded after hours )see below.,
etc.
!0on arri%al on the da& of the auditH%isit, # take a turn around the e(0lo&ee 0arkin+ lot. # look for the
st&les, a+e and condition of the cars. #f there is a lar+e nu(ber of older or 0oorl& (aintained cars one of
the 'uestions that # ask is how (an& te(0s are used and what is the turno%er for the current &ear )if these
are hi+h, then the& need e2cellent trainin+.. The older cars i(0l& that the& 0a& less than a%era+e for the
area and (a& ha%e a hi+h turno%er because of this. # also tr& to cruise 0ast the shi00in+ area and
du(0ster. Are these areas a (essD #f the front office and 0roduction areas are neat and orderl& it (a& be
a show 0ut on for the audit, if the back of the buildin+ is a (ess. Also, note an& trailers sittin+ on the
ed+es of the 0arkin+ area. This could be a si+n of te(0orar& holdin+ areas to hide e2cess 0roduct or a
recent re6ection b& another custo(er. #f trailers are 0resent, ask to see the MR: )or re6ect. lo+s )+ood idea
to look at these in an& case.. #f there is lo++ed (aterial that is not 0resent then &ou (a& ha%e 6ust
disco%ered the ti0 of a iceber+. Are the buildin+s and +rounds well (aintained, clean, trash containers
0laced strate+icall&D This (a& indicate 0ride )or lack of. in ownershi0 b& all e(0lo&ees. "o an& 0eo0le
that &ou see on the lot look closel& at the 0assin+ car or is it i+noredD A harsh stare (a& i(0l& labor
0roble(s )since &ou will 0robabl& be dressed in business clothes., or it could 6ust be a +ru(0& 0erson. A
0leasant +lance or wa%e i(0lies self=confidence and (a& indicate a +ood work at(os0here.
Are there Iisitor or /usto(er 0arkin+ s0acesD Are %isitor entrances clearl& (arkedD How are &ou
+reeted at the lobb&D Are &ou e20ectedD Has the rece0tionist been briefed on who to e20ect, is there a
bulletin board that indicates a welco(e )to &ou and &our +rou0.. #s the initial +reetin+ 0leasantD These
are all thin+s that the (ana+e(ent of the co(0an& can arran+e to ha00en if the& ha%e a custo(er focus.
or(an :lack 9 Minute Rule 0+ 8 of >
#f the& are not 0resent then it i(0lies that the& ha%en;t taken the ti(e to tr& to see thin+s fro( a %isitors;
0oint of %iew.
+HEN ENTERING THE ,-.PANY*
How is the initial +reetin+ fro( the co(0an&D "oes it see( +enuineD #s the 0erson a (ana+er, owner, or
other res0onsible for re0resentin+ the co(0an&D #s the 0erson in salesD # 0ersonall& do not like to ha%e
first contact with sales, and # tell the( so. Their 6ob is to +i%e the best i(0ression of the co(0an& )so is
e%er&one;s. but sales often will allow a slanted %iew to be shown and the& t&0icall& ha%e little
res0onsibilit& to actuall& correct a 0roble(.
What does the A+uide; show &ou firstD )# t&0icall& ask to use the bathroo( when we are well awa& fro(
the lobb&. This allows a look at the Afacilities; that the e(0lo&ees ha%e to use, not 6ust the one u0 front for
%isitors.. #f the bathroo( is a (ess then it i(0lies that (ana+e(ent doesn;t tr& too hard to (aintain
decent conditions for the e(0lo&ees. How &ou are Ahandled; in the first few (inutes is tellin+. Ha%e the&
thou+ht this outD "o the& tr& to 0ut &ou at ease )&ou need to do that for the( also. while the conference
roo( is fillin+D Are &ou +reeted b& (ost that co(e inD Or, do the& ha%e to (ake se%eral calls tr&in+ to
+et 0eo0le to attend an o0enin+ (eetin+. # e20ect to be briefl& introduced to the 0rinci0als that # will be
workin+ with. )# t&0icall& send an a+enda indicatin+ that this should be done first thin+ and schedule C9
(inutes to B5 (inutes for the initial introduction and re%iew as to the 0ur0ose of the %isit. An& lon+er cuts
into on the floor ti(e for the audit, also it causes less disru0tion to the su00liers business.. #f # a(
0resentin+ data or infor(ation )'ualit& audit ob6ecti%es, %erification audit, re6ects, re%iew of 'ualit& @
deli%er&, etc.. then # t&0icall& fa2 or e=(ail before arri%al so that the co(0an& can ha%e the data a%ailable
for e%er&one to see.
On the sub6ect of 0uttin+ the( at easeF Jou will +et little acco(0lished if the su00lier feels that &ou are
the lead re0resentati%e for the #n'uisition. Fro( the first (o(ent tr& to de%elo0 a ra00ort and a 0ositi%e,
+oal directed relationshi0. Most 0eo0le at &our su00liers feel co(fortable in this role. After all isn;t that
wh& the& are &our su00lier, the& are sol%in+ a A0roble(; )0ro%idin+ 0roduct, ser%ice, e20ertise, etc.. that
&ou cannot sol%e &ourselfD Make the (ost of their e20ertise b& de%elo0in+ a 0ositi%e win=win attitude
with the(.
#f there is a 0roble( to be discussed, # t&0icall& ask to ha%e an o0erator and their su0er%isor at the
o0enin+ (eetin+ )de0endin+ on the 0roble(.. #f # sense o00osition to this it i(0lies that (ana+e(ent
(a& be tr&in+ to filter infor(ation to and fro( e(0lo&ees. Makes (e wonder wh&. )K theor&
(ana+e(ent st&le, inco(0etent o0eratorD. #f the hourl& e(0lo&ee )o0erator, tool @ die (aker, etc., i.e.
0rocess Aowner;. is at the (eetin+, but ed+&, then the& (a& not be co(fortable in the sa(e roo( with
(ana+e(ent, a+ain # wonder wh&. #f the& are there, a00ear at ease, attenti%e and can contribute easil&, it
sa&s %olu(es for the 0artici0ati%e st&le of (ana+e(ent, their trainin+ (ethods, and willin+ness to share
leadershi0. # often ask directed )and direct. 'uestions1 0oliticall& correct 'uestions are not 0art of (&
forte. #f a defensi%e attitude co(es u0 # (a& be 0ushin+ too hard or it (a& be a warnin+ of so(ethin+
else +oin+ on. An e2a(0le of this in a (eetin+ for(at, es0eciall& when so(ethin+ doesn;t see( to rin+
true is to start the wh& 'uestionin+ (ethod )Poka=Joke.. This can (ake so(e (ana+e(ent %er&
unco(fortable as &ou near a root cause, es0eciall& if the root cause (a& be their lack of follow=u0. An&
well=%ersed 'ualit& 0rofessional tends to kee0 their (ouths shut since the& (a& ha%e alread& asked the
'uestions and the& likel& alread& know where the 'uestions are headed. Reco+ni-in+ this, # tr& to direct
the Awh&; 'uestions to (ana+e(ent.
Ti(e s0ent obser%in+ the 0rocess and talkin+ to o0erators is often the (ost %aluable ti(e that can be s0ent
while in the facilit& workin+ a s0ecific 0roble( or 0erfor(in+ an audit. #f the 0ur0ose of the %isit is a first
or(an :lack 9 Minute Rule 0+ B of >
ti(e 'ualit& s&ste( audit, # (a& take a little (ore ti(e in the o0enin+ )and closin+. (eetin+ so that the&
ha%e a clear understandin+ the sco0e and results of the audit.
The su00lier has alread& +i%en (e a stron+ i(0ression of their (ana+e(ent st&le, co((it(ent and %alue
that the& 0lace on custo(ers )and e(0lo&ees. in the first 9 (inutes on their +rounds. This initial
i(0ression is seldo( wron+ when &ou know what to look for and kee0 an o0en (ind in inter0retation.
Don$t misunerst#n, # do not base (& entire e%aluation on the first 9=(inute i(0ression and then work
to tr& to su00ort this Afeelin+;, but e20erience has tau+ht (e that this first i(0ression is seldo( wron+
)Ada( was ri+htE.. There ha%e been onl& a few occasions where the first i(0ression was not a +ood
indicator of the stren+th of the su00liers; co((it(ent to 'ualit& )seldo(, but often enou+h to cause one to
kee0 an o0en (ind..
The su( total of the %isit should be to 0ro%ide (& co(0an& with an e%aluation of the stren+th of the
su00liers; current 'ualit& s&ste(, co((it(ent to 'ualit&, and (ost i(0ortantl& a 0rediction of the abilit&
of the co(0an& to constantl& i(0ro%e. The rote 0art of assi+nin+ nu(bers to indicate co(0liance to
s0ecific re'uire(ents reall& is a (inor 0art of the audit and these nu(bers can be hi+hl& (isleadin+ to
(ana+e(ent. A hi+h nu(ber in this case (eans onl& that the& ha%e satisfactor& docu(entation and that
the& follow it well. # can teach (ost an& 9
th
+rader to 0erfor( this t&0e of fill=in=the=nu(ber audit. #f this
is all that the auditor does then the& are doin+ both the su00lier and their host co(0an& a disser%ice.
The (ana+e(ent attitude of the su00lier is (ost i(0ortant, but it is also the (ost difficult to re0ort in
ob6ecti%e ter(s, es0eciall& to the su00liers (ana+e(ent. Tri0 re0orts to &our co(0an& should alwa&s
include this infor(ation. Jour own (ana+e(ent (a& need to be briefed on the (eanin+ of the re0ort
since it is often not 0resented in a wa& that lends itself to a 'uick +lance. To (ake it as eas& as 0ossible
for (& (ana+e(ent to understand the tri0, the be+innin+ of the re0ort, of course, states the intent of the
su00lier %isit. The ne2t headin+ will usuall& be RE/OMME"AT#O3 )or 3!MMAT#O. which +i%es
a 'uick distillation of the results. #f # a( reco((endin+ that we not do business with the su00lier, # sa&
so strai+ht out. "o not be afraid to state this if &ou feel stron+l&. # ha%e felt that wa& a few ti(es, said so
and the su00lier was used an&how due to other issues )sole source, best 0rice, etc... #n e%er& case the
su00lier ended u0 causin+ (an& 0roble(s and we e%entuall& +ot out after s0endin+ (uch to correct the
0roble(s. Jour co(0an& is 0a&in+ &ou to tell the truth and to use &our head. After a cou0le of e0isodes
where &our reco((endations are o%erridden or i+nored &our (ana+e(ent (a& start 0a&in+ attention. #f
&ou don;t relate what &ou ha%e seen and felt, then &ou are 0artl& to bla(e for use of a substandard
su00lier and later others ha%e so(eone to 0in bla(e on. # ho0e that &our co(0an& has (o%ed be&ond this
but e%er&one rela0ses to fin+er 0ointin+ beha%ior at ti(es.
The ne2t and lar+est section is "ETA#< where # +o into the ob6ecti%e data su00ortin+ how the
reco((endations were for(ed. The ob6ecti%e data is su00ort for the thin+s that ha%e been noted whether
the& be attitude andHor the s0ecifics noted. E2F 'uantit& sa(0led, nu(ber of defects )if an&., areas
sa(0led, 0eo0le (et, and an& other 0ertinent obser%ations. The (ain 0ur0ose of this area is as
back+round and an accurate a00raisal of where the su00lier is and 0ossible reco((endations for
i(0ro%e(ent. 3eldo( does (ana+e(ent read this section since it could 0ossibl& be se%eral 0a+es, but it
is necessar& to kee0 as 0art of the su00liers file for subse'uent tri0s b& &ourself and others. Also, if a
nu(erical ratin+ is taken fro( a Acanned; audit sheet, this is the area that # describe the ratin+.
# t&0icall& send the su00lier a co0& of the tri0 re0ort unless there is a stron+ reco((endation for not
doin+ business with the(. Then # will si(0l& send a Athank &ou for &our ti(e; note.
or(an :lack 9 Minute Rule 0+ > of >