by Shauna Wilson
The global supply chain has forever changed the institution of work, and it’s now changing how we should conduct internal audits. Telecommuters, remote workers, and multinational business supply chains are experiencing different communication issues than those experienced by a traditional co-located work force. These issues can be largely attributed to lack of technical training, inaccessible and/or obsolete documents, and miscommunication.
Communication issues are not new, I remember supporting co-located manufacturing teams that would declare communication issues were the root cause of their problems. Honestly, that declaration used to frustrate me as I tried to work with the operators to improve their processes. But after years of research, communication is not limited to shift crossovers or status meetings; it also includes actions, the written word as completed records and procedures, instruction, and interpretation. Cultural challenges between countries and companies, language barriers, and working in virtual environments contribute to the complexity of communication.
It is for this reason that many believe it best to meet face to face (FtF) to plan strategies, resolve big issues, and build trust among remote team members. However, the reality to meet FtF can be cost prohibitive, wastes valuable time traveling, and does not guarantee success working remotely. Communication issues are exacerbated due to lack of computer technical training, nonverbal cues used in building trust, and invisible feedback loops.
In a global supply chain, ineffective communication processes may appear to an auditor as broken systems or process issues. For example, process changes with unclear direction or instruction at a contract manufacturer may result in a delayed product hold. Perhaps the release of a new product is behind schedule, which affects various global supply chain activities resulting in:
• Missing product numbers
• Incorrect drawings at the supplier
• Unapproved suppliers resulting in the purchase of defective components
• Wrong shipping labels at a distribution center
The objective of this article is to apply ISO 9001’s communication criteria to customer and supplier-related interfaces often found in global supply chains. As internal auditors, we analyze the whole business system and assess how the integral parts fit together. Scoping barriers prevent internal audits from crossing boundaries into other companies. But to gain supply chain efficiencies, companies should incorporate an audit to understand communication issues that cross over company boundaries.
ISO 9001:2008 clause 5.5.3, Internal communication, requires that effective communication processes are established ensuring communication takes place regarding the performance of the quality management system (QMS). According to ISO 9001, effective communication is defined as the following:
• Transmit and receive information quickly for response (input/output/feedback).
• Build trust among team players.
• Transmit the importance of customer satisfaction, process performance, etc.
• Identify opportunities for improvement.
Figure 1 compares the above communication parameters to ISO 9001 sections that require specific communication to occur between a company and its customers and suppliers. For example, contract review is a process used to ensure that customer requirements and delivery dates are understood. Customer service builds trust while customer feedback processes focus on understanding the customer likes and dislikes about the product or service. These traditional processes represent some level of customer communication either in person, by e-mail, or submitted forms.
Figure 1: Auditing communication: Internal communication
ISO section | Transmit/receive information for quick response | Build trust | Transmit importance | Identify continual improvements |
7.2.3 Customer-related communication | Enquiries (phone, website)ContractsOrder handlingAmendment input
Order forecasting |
Customer serviceSeeking feedbackVisit the customer | Customer orderCustomer feedbackCustomer complaintsAmendment initiated | Customer surveys |
7.4 Supplier-related communication | Supplier selectionApproved suppliersSupplier issuesPurchase order | Supplier partnershipsCultural trainingCross-company training | Scorecard metricsConstructive feedback | Supplier reviews |
8.3 Control of nonconforming product | Product issue alertSeparate good from bad productDate code traceability | CM partnershipsCultural trainingResponse methods | Inform the public | Supplier, CM, and DC reviews |
Conventional approaches to clause 7.2, Customer-related communication processes, point to contract or purchase order review, but in a commodity-based supply chain, customer orders may originate from the company website and be directly fulfilled from a distribution center. The ability to verbally talk to the customer is greatly reduced or even eliminated. How is customer communication accomplished to ensure questions are answered? Internal audits could include auditing the company website, reviewing for ease of use and available methods for the customers to ask questions, and confirming their orders. How is customer survey information used to understand how the customer felt about his or her ordering experience? How did the company website help to build trust with the customer? If the instant chat was used, what issues were discussed and then reported into the organization to be used to either update the website or enhance a product or the return process? Was the chat session successful? Call the call center with a problem to understand that experience.
What communication methods are used cross-functionally, or company to company to address customer feedback? What medium is used, and were the right people notified? Does all of this seem overwhelming? Perhaps there are so many different parts of the organization spread all over the world that it’s hard to know where to begin the internal audit of the company website. (See figure 2.)
Figure 2: Auditing communication: Customer-related communication
ISO section | Transmit/receive information for quick response | Build trust | Transmit importance | Identify continual improvements |
7.2.3 Customer-related communication | Website purchaseE-mail receiptCustomer questionsWebsite updates | User-friendly websiteInstant chat availableService number to call | Return policy and processCustomer hotline to call for product problems | Customer |
The fragmentation of supply chains is leaving many companies in the dark about what is going on in their supplier tiers. The more companies outsource activities, the less control they have over customer satisfaction, product quality, and communication; thus giving more importance to pursuing internal auditing that goes beyond the four corners at a single location. A website audit will eventually lead to supplier-related processes if product issues or returns are logged through the website.
Figure 3 details possible audit trails to pursue when aligning communication with supplier-related processes from a global supply chain perspective. Supplier far-flung communication could stem from the contract manufacturer (CM) at the first tier to a third tier component provider. Supplier contracting may restrict knowledge of lower-level suppliers; however, this doesn’t mean a supplier audit cannot ask how communication (regarding build capacity, material, or labor issues) with lower-level suppliers are managed along with the selection process for second and third-tier suppliers. Areas to confirm include online meeting productivity, ongoing cultural training, and issue response process performance.
Figure 3: Auditing communication: Supplier-related communication
ISO section | Transmit/receive information for quick response | Build trust | Transmit importance | Identify continual improvements |
7.4.3 Supplier-related communication | Build plansApproved suppliers listSecond-tier supplier issuesThird-tier supplier issues | Weekly meetingsCultural trainingProduct issue response processeAuditing techniques | Scorecard metricsSupplier eAudits• Risk management• Social responsibility (labor, environmental)
• Escalation processes |
Supplier reviews |
Audit for consistent action, if annual supplier audits are contingent on expenses, and that the message is clear to the supplier. Rather than postpone a supplier audit, use technology to audit far-flung suppliers to ensure timely reviews occur. E-audits use collaborative programs, WiFi, and mobile device cameras to collect evidence in audits. Incorporate quality control, social responsibility, and risk management criteria to the e-audit checklist, communicating the importance of these areas to the supplier. Use e-auditing methods to instantly see specific product or process issues at the contract manufacturer’s location.
Communication breakdowns are often more prevalent in reverse-flow activities such as product returns, rework, and product holds. (See figure 4.) ISO 9001 section 8.3, Control of nonconforming product, provides review criteria applicable to global supply chains, but the complexity will depend on the number of companies involved. For example, if a company placed a product hold, an e-audit reviewing separation of nonconforming product could be used to audit the distribution center, contract manufacturer, and supplier. Questions to confirm communication include how the product issue surfaced, who needed to be contacted, risk assessments, separation of bad product, and then notification of the product hold. Is there a documented process for risk assessment and what communication medium and records are used to initiate a product recall?
Figure 4: Auditing communication: Nonconforming product
ISO section | Transmit/receive information for quick response | Build trust | Transmit importance | Identify continual improvements |
8.3 Control of Nonconforming Product | Product testing resultsComponent recallDate code traceabilityRisk assessment | PartnershipsCultural trainingTraining in response Methods | Hold processSeparate good product from badInform the publicRecall process | Supplier, CM, and DC reviews |
We have all experienced the effect of the Internet and how it has made the world smaller because of the vast ability to connect with people in distances. The same effect could occur as companies find ways to tighten and streamline their supply chains to tackle communication issues. Internal audits that tie the supply chain communication must have executive management support in the supply chain. Defining where the supply chain communication breakdown occurs and working together to resolve communication issues will build trust and response processes resulting in an effective and efficient supply chain.
About the author
Shauna Wilson, president of Amazon Consulting Inc. has focused her consulting talents on performance management, international standards, and building high-performance internet teams. She has been at the forefront with her concept of InterneTeaming, leading the way to more collaborative methods for working over the internet. Working from home globally, Shauna understands what it takes to work remotely. Contracting with corporate 500 companies, Shauna has tested her revolutionary communication methods.
Wilson, an IRCA-certified QMS auditor, collaborated with J.P. Russell to write a handbook on how to conduct remote audits—eAuditing Fundamentals: Virtual Communication and Remote Auditing—from ASQ Quality Press.