Supplier audits, in which third parties verify the management status of the supply chain, are becoming the “new mainstream.” However, from those who conduct supplier audits and those who are in the position of receiving audits, we often hear voices such as “I do not know specific methods and know-how” and “What is the difference between CSR Audit and ISO certification?” So this time, we will explain the theme of supplier audit.
What is Supply Chain Management?
Supplier auditing is a trend behind growing interest in supply chain management. Supply chain management refers to not only the management of the company, but also the management of the business operations of external (business partners and contractors) whether there are any problems. For example, we will check whether the manufacturer and producer of the materials to be procured have any esg-related risks, such as conflict involvement, environmental destruction, violations of laws and regulations, and nonsocial acts such as human rights violations. The main purpose of the transaction is to verify that the continuation of the transaction is not contrary to social ethics.
What is CSR Audit (Supplier Audit)? What is the Difference from ISO Certification?
“CSR audit (supplier audit)” audits the actual business conditions of the suppliers of our business partners as a “means for proving that CSR procurement is being carried out” in-house. There are also second-party audits conducted by the company itself using its own standards, but audits by third-party organizations are also expanding.
In the past, procurement audits mainly confirmed whether there was a problem with the quality of the goods and services purchased, and the general idea was that the appropriateness of general management in the organization of business partners relied on industry standards and ISO examinations. However, in the current CSR audit, the main focus is on confirming whether there are any problems with the organizational management of business partners, the labor situation, and consideration for the environment and society. By directly confirming whether the company’s suppliers have a negative impact on society, whether the safety and rights of workers are protected, etc., we will increase the confidence of our business.
Difference Between CRS Audit and IOS Audit
| CSR | IOS | |
| Subject seeking examination / audit | In many cases, it is requested from the outside, such as requested by a business partner. | This is done voluntarily by the company to obtain management system certification. |
| Selection of executing agency | In many cases, the company to be certified cannot choose the auditing body or the scope of certification. | The company to be certified can choose the inspection body and the scope of certification by itself. |
| Subject to examination / audit | Check the safety and health of the target organization, worker rights, environment, and business ethics in an integrated manner. Interviews with workers (labor unions), wages, working hours, organizational ethical codes, etc. | Basically, we do not know anything outside the scope of the standard (for example, in the case of quality inspection, we do not enter the occupational safety field very much). |
| Scope of examination / audit | l It is rare to look at each department, but often look at trends and governance of the entire organization. Cafeterias, dormitories, dispatch / consignment / on-site contractors, etc. can also be subject to confirmation / interviews. | There are many parts that are examined on a department-by-department basis, and usually dispatched employees, contractors, on-site contractors, etc. are not subject to confirmation / interview. Areas other than workplace / business-related areas are rarely confirmed. |
Therefore, the treatment of workers and safety and health is of particular importance. Interviews with workers selected by the auditor are also conducted on individuals and small groups. On-site contractors and outsourced / dispatched employees are also not distinguished from employees in the audit. Dining rooms and dormitories are also subject to confirmation. If NC (nonconformity) is confirmed as a result of the audit, correction/improvement may be a condition for continuing the transaction, and immediate correction/improvement within a certain deadline is required.