Supply Chain Audit
Supply chain auditing is a systematic and multi-dimensional assessment of the entire supply chain process (from supplier onboarding to end-product delivery). Its core objective is to verify the supply chain’s compliance, efficiency, sustainability, and risk control capabilities, ensuring that the supply chain is stable, secure, and meets the company’s strategic needs.
Ensuring supply chain stability: proactively identify compliance risks, quality hazards, and efficiency bottlenecks to prevent supply chain disruptions caused by supplier violations or logistical interruptions, thus ensuring the continuity of product delivery.
Reduce operational risks and costs: Reduce penalties and product recall costs due to supply chain non-compliance, improve efficiency through process optimization, and reduce waste in procurement, logistics, and other aspects.
Enhance supply chain competitiveness: Select high-quality, compliant, and sustainable partners to strengthen supply chain resilience and collaboration, while meeting customers’ needs for compliant and green supply chains and improving brand reputation.
Supporting the implementation of corporate strategy: Aligning the supply chain with the company’s compliance requirements and sustainable development goals, laying the foundation for the company to expand its market and carry out international cooperation (such as meeting the requirements of overseas customers for supply chain social responsibility).
Core Elements
Audit Target
It covers all stakeholders and links in the supply chain, including suppliers (raw material/component suppliers, outsourcing service providers), procurement processes, production/processing, logistics and transportation, warehousing management, inventory control, distribution channels, after-sales traceability systems, as well as the implementation of supply chain-related management systems and personnel.
Review Basis
This mainly includes national/industry regulations (such as labor laws, environmental regulations, import and export compliance requirements), international standards (such as SA8000 social responsibility standards, ISO 26000 sustainable development standards), internal supply chain specifications (such as supplier access standards, quality control requirements), customer agreements, or industry best practices.
Reviewing Entity
Audits can be divided into internal audits (jointly conducted by the company’s procurement, quality, and compliance departments for daily management and control) and external audits (implemented by third-party professional organizations or client-commissioned teams for supplier certification and compliance endorsement).
Core Review Dimensions
Compliance Audit
Verify whether each link in the supply chain complies with laws and standards, including supplier qualification compliance (business license, production license, etc.), labor compliance (employee rights protection, working hours and wages compliance), environmental compliance (production pollution discharge and waste treatment meet standards), import and export compliance (customs declaration process and tariff payment compliance), and data compliance (supply chain information transmission and storage security).
Efficiency and Cost Audit
Assess the operational efficiency and cost control capabilities of the supply chain, including procurement cycle (order response speed, delivery timeliness), logistics and distribution efficiency (on-time transportation rate, loss rate), inventory turnover rate (avoiding backlog or shortages), supply chain collaboration efficiency (speed of information synchronization with suppliers/distributors), and the rationality of the cost structure (control of procurement costs, logistics costs, and management costs).
Sustainability Audit
Focusing on the long-term stability and social responsibility of the supply chain, including the supplier’s sustainable capacity (stability of raw material supply and capacity flexibility), environmental friendliness (energy conservation and emission reduction, green production), social responsibility (eliminating child labor and ensuring labor safety), and supply chain resilience (the ability to respond to emergencies, such as raw material shortages and logistics disruptions).
Risk Control Audit
Identify potential supply chain risks and assess mitigation measures, including supplier risks (reliance on a single source, falsification of qualifications), quality risks (non-conformity rate of raw materials/products), logistics risks (transportation delays, cargo damage), geopolitical risks (changes in import and export policies), financial risks (stability of supplier cash flow), and the effectiveness of risk warning and response mechanisms.
Standard Implementation Process
Planning Stage
Define the scope of the audit (e.g., a certain type of supplier, a certain branch of the supply chain) and objectives (e.g., supplier access audit, annual compliance review), form a cross-departmental audit team (including procurement, quality, compliance, and logistics personnel), develop an audit plan and checklist, and collect relevant laws and regulations, corporate standards, and basic supply chain data (e.g., supplier directory, procurement records).
Implementation Phase
Evidence of supply chain operations is collected through document review (verifying supplier qualification documents, test reports, and compliance certificates), on-site inspection (visiting supplier production workshops and logistics warehouses to observe process execution), personnel interviews (communicating with supplier managers and frontline employees), and data verification (comparing indicators such as delivery timeliness and quality pass rate).
Analysis and Reporting Phase
Compare the evidence with the audit basis, identify non-compliance items (such as non-compliance, inefficiency) and risk points, assess the severity and scope of the problem, write an audit report, and clarify the problem description, risk level and targeted rectification suggestions (such as changing suppliers, optimizing logistics solutions, and improving compliance systems).
Rectification and Follow-up Phase
Issue rectification requirements to relevant responsible parties (such as suppliers and internal procurement departments), formulate rectification plans and timelines, the audit team tracks the rectification progress, verify the rectification effect through re-evaluation, and incorporate the audit results into the supplier rating system to form a closed-loop management of “assessment-rectification-verification-optimization”.
SUSTECH
SUSTECH is an innovative technology service company with artificial intelligence, big data, and blockchain at its core. We specialize in ESG (Environmental, Social, and Governance) testing, certification, and compliance management, helping companies achieve their sustainable development goals. Through digital and intelligent means, we are redefining the testing and certification industry, making ESG compliance more transparent, efficient, and credible.
Core Advantage: Technology-enabled ESG Compliance
Intelligent ESG Data Acquisition and Analysis
- IoT Environmental Monitoring: Real-time collection of data on enterprise carbon emissions, wastewater discharge, energy consumption, etc., and automatic generation of ESG reports.
- AI carbon footprint calculation: Based on supply chain data, it accurately calculates the carbon footprint of a product throughout its entire lifecycle, in accordance with international standards such as ISO 14064 and GHG Protocol.
ESG Certification and Rating Optimization
- Automated compliance checks: AI compares data against global ESG standards (such as GRI, SASB, TCFD) to identify ESG risks for enterprises and provide improvement suggestions.
- ESG Rating Enhancement Solution: Combining industry best practices, we develop actionable ESG optimization strategies to help companies improve their ESG ratings from MSCI, S&P, and other ranking bodies.
Blockchain-based Evidence Storage and Transparent Traceability
- Tamper-proof ESG reports: All test data is stored on the blockchain to ensure traceability and auditability, enhancing the trust of investors and regulators.
- Supply chain ESG penetration management: Tracking supplier ESG performance to ensure compliance with the requirements of major international manufacturers.
