Chapter 3.4 - Compare the use of audits and other feedback mechanisms to evaluate environmental, social and governance standards

Question 1

Name 4 processes to promote commitment to ESG and ethical considerations

Answer 1

1. Accreditations from professional bodies that certify ethical or sustainable practise
2. Mission statements, visions or values shown on the company’s website
   3.Internal policies that govern the way that business works as a whole giving it ‘direction’
3. Internal processes that govern how individuals work to uphold company policies, mission and vision statements

Question 2

Name 3 ways of ensuring that activities are ESG driven and ethically and sustainably undertaken

Answer 2

1. Monitoring suppliers ethical performance
2. Encouraging dialogue with suppliers to encourage improvements to processes
3. Identifying and addressing potential conflicts of interest

Question 3

Audit

Answer 3

An official inspection conducted either by the procurement organisation itself or by an independent third party, to ensure compliance with requirements and standards

Question 4

Name 6 features of an audit

Answer 4

1. Face to face at the supplier premises
2. A structured series of questions that are aligned to contract requirements, internal processes or policies
3. Carters 10 C’s can be adapted for use when evaluating the performance of an organisation
4. A tour of the supplier workplace
5. Interviews with members of staff in any relevant position

Question 5

Scope

Answer 5

The defined boundaries that limit the extent of a project or study, to ensure that it is focused on the specific situation or problem

Question 6

Scope creep

Answer 6

Changes in the scope or requirements of a project or study over time, either purposely or without authorisation and usually without adjusting for additional time, resources or money

Question 7

Name 6 elements that should be considered when defining the scope of an audit

Answer 7

1. How long the audit will be expected to take
2. The period of time to be reviewed
3. The teams or functions the audit will focus on
4. The extent of work or activities that the audit will focus on
5. Which processes will be looked at
6. Any other elements required for the audit to have clearly defined boundaries

Question 8

What is the purpose of defining the scope of an audit

Answer 8

To ensure that all parties involved in the audit are aware of the content it covers and the limits of this cocerage

Question 9

What happens if audit plans are not followed

Answer 9

There is the potential for scope creep to occur

Question 10

Name 6 ways scope creep can negatively affect the outcomes of audits

Answer 10

1. Time wasted observing the wrong things
2. The audit not being properly completed due to wasted time
3. Money wasted observing other things or carrying out unnecessary checks
4. The audit findings and conclusions not understanding the true root cause of problems that are identified, instead of attributing them to false causes
5. Over-burdening the supplier’s resources if many interviews, documents reviews or access to areas are requested by the auditor
6. Disruption to the supplier’s operations or production processes if operations are halted during the audit

Question 11

Name 7 details the audit plan and scope should contain

Answer 11

1. The name of the auditors
2. The names of any individuals who will be specifically audited
3. The audit’s timescale
4. The period in the past from which information will be considered as part of the audit
5. Any relevant tasks or activities
6. Processes that govern the activities in question

Question 12

Name 4 precautions or preparations companies could take if they knew the audit was going to happen

Answer 12

1. Fraudulently creating new documents that the supplier believes the auditor will want to see, purely for the purpose of passing the audit
2. Cleaning facilities and equipment, to give the auditor the impression that the workplace is always clean and well maintained
3. Suddenly mandating the wearing of PPE by all staff in manufacturing environments where this should be worn but usually is not
4. Coaching staff to ensure that if they are chosen to participate in the audit, they give a particular response, lie or do not speak at all

Question 13

Non-conformance

Answer 13

Where an audit finds that something does not work or us not carried out in line with the rules that govern it. These generally require action to fix the problem

Question 14

Opportunity for improvement

Answer 14

Where an audit identifies potential improvements to a process or ways of working and highlights them for future consideration. These do not always require action, but may be treated as suggestions

Question 15

How should you communicate and non-conformances or opportunities for improvement to the supplier after an audit

Answer 15

Corrective action plan

Question 16

What should a corrective action plan contain?

Answer 16

Specific non-conformances and the requirement they relate to, the action to take to fix the problem

Question 17

What is a key aspect of improvement

Answer 17

Feedbacl

Question 18

Should audit findings be shared with suppliers?

Answer 18

Yes - so that an ambiguity can be addressed at that time

Question 19

Where will you find a formal corrective action plan policies and procedures that provide both parties with a step by step, closed loop formal plan of action for communicating, resolving and closing out any problem that arises

Answer 19

Quality management system

Question 20

What is the reason for a root cause analysis

Answer 20

To allow the buyer not only to address the issue but to ensure that it does not occur again

Question 21

Why are supplier development programmes carried out?

Answer 21

To strengthen relationships with suppliers and to strengthen their capabilities and competencies