Sleeping well the night before an audit…..

Does the word “audit” elevate your blood pressure? Keep you up at night….. or wake you at 2 am wondering if you truly understand the difference between “shall” and “should”?

Whether it’s an internal controls audit, a certification, such as IATF 16949, or a self-assessment, such as MMOG/LE, the results of audits have an impact on current and future business for most manufacturing operations. Satisfactorily completing these certifications says a lot about the credibility of the supplier to consistently produce a quality product. With this at stake, manufacturing leadership takes a dim view of failing audits and pass along the stress to those in charge of ensuring passage.

So…. Is there a way to not only take the stress out of audits but also speed up the process and reduce the amount of time spent with the auditors? Well…. Yes…. there is.

Understanding the language of the audit, i.e. the shall versus should, is the first objective. This tells you what MUST be complied with and what is simply a guideline for which you have some latitude for non-compliance. These are not truly cut and dry as there are some “should’s” that may be critical to the quality of your product or your business. If so, treat them as a “shall.”

All “shall’s” must be documented. Ok…. Done. I have a process, procedure, and work instructions as needed. Next!

WHOA! Here’s the trick question…. How would you demonstrate compliance to that “shall” process or procedure to an auditor whose main purpose in life is to find a gap?

Demonstrate…. Using objective evidence.

This doesn’t mean talk your way through it. Remember.. these “shall’s” are critical to ensuring the on-going quality of your product, so this is not, or should not be a one-time demonstration. You should be able to demonstrate on-going compliance, which means a history of good, well-documented, organized data. And as an auditor, I love nothing more than asking for evidence …. And then waiting until you can go find it, or find the person who can find it, or…… Getting the picture?

The goal is to take control of the audit from the start. How? Through the use of Objective Evidence Books. For each “shall” or critical “should” do the pre-work to ensure you have everything in one spot: process/procedure, flowchart, sampling of internal audit data, etc. Want to really impress the auditor? Be able to demonstrate compliance over time through Layered Process Audits and include some non-compliant data so you can demonstrate Fast Response and Problem Solving when a non-compliance is found.

Case in point. I was a new Supply Chain manager at a component plant for a major automotive company. Shortly after taking the job, it was announced there would be an Internal Controls Audit in 90 days. Yep, I panicked. My team and I received a copy of the questions being targeted by the audit as was customary and went to work. We pulled copies of all the related documented plant processes and procedures and then went to work gathering the necessary objective evidence to prove compliance. In some cases, sadly, we could only prove NON-compliance but decided to include this data along with corrective actions we were taking. Come the week of the audit, we nervously greeted the auditor and led him to the conference room we had prepared for his week-long visit. On the conference table were several brand-new binders. We explained how the information in the binders was structured and gave him our contact information should there be questions….. and then went to our offices and waited…and waited. At the end of three days, the auditor called and asked to go to the manufacturing floor to view a few areas in question. On the fourth day, he congratulated us on a job well done and departed, a day early, after giving us a perfect audit score.

Having used this process for the last 15 years at multiple plants and in multiple countries, I can attest to the fact it works. It doesn’t matter what type of audit is being conducted (lean, internal controls, IATF, MMOG/LE, etc.). The power lies in the proper use of

Objective Evidence Books combined with Layered Process Audits to not only ensure compliance to “shall’s” but to also ensure non-compliance s are quickly found, documented, and remediated, providing a wonderfully detailed audit trail for the next time an auditor knocks at your door.

I sleep VERY well the night before an audit…. Do You?

Written By:

Becky S. Ferrell, Key Associate

With over 35 years of Global Supply Chain experience, Becky has worked with major automotive manufacturing and Tier One / Tier Two suppliers to identify opportunities and improve their operations. During an extensive assignment in Asia, Becky used her training to effectively improve both Greenfield and Brownfield facilities, while serving as a mentor to the Supply Chain personnel. As an experienced Lean and Supply Chain calibrator, she is able to identify issues and offer assistance in developing gap closure plans. Becky currently serves as a board member on the Greater Detroit chapter of APICS, and is a certified instructor in CSCP.

At High-Value Manufacturing Consulting, we realize manufacturing facilities today struggle with a number of planning, operational, and resource challenges. As a world-class manufacturing consulting firm, our goal is to help our clients assess current manufacturing issues, plan for future needs, provide concrete recommendations, and provide the skilled resources required for strong problem-solving capability.

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