Are Your Suppliers Putting You at Risk?

21/10/2016

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Winning new business requires a lot of investment, both in time and money. Before you even have the opportunity to bid, inevitably the likes of ISO 9001 certification are necessary in order to demonstrate credibility – this was true for some 80% of BAB clients who now have certification.

Depending on the contract, there may be other accreditations required in order to satisfy requirements, on top of the usual insurance cover. All this needs to be in place before you can even start to talk about why your organisation is the best fit for the contract. Given the enormous time and cost put into winning a contract, it’s hugely important to ensure sub-contractors and suppliers don’t undermine your efforts.

As a stark example of this, United Utilities were recently fined £600,000 for polluting a 1.7km stretch of brook, killing 900 fish in the process. Despite the media quick to blame the company, the incident was actually caused by one of its contractors.

Environmental incidents like these are being more regularly reported due to the Sentenced Council revising its guidelines in 2014 for such offences, upping fines and relating the size to the operator’s turnover.

New rules meant main contractors have had to review their approach to managing their supply chains, due to like-for-like fines jumping from tens of thousands, to millions of pounds.

With the likes of United Utilities being caught out, the realisation has been that we cannot divest all responsibility when appointing sub-contractors. Indeed, the ISO 9001 standard has recently been revised with a new focus on managing risk – suppliers being a notable example.

With the supply chain having the ability to impact your own quality of work, and reputation as a result, ISO’s quality standard asks you to consider:

  • What is the specific product or service you are buying?
  • What impact does this have on your own business?
  • What are the risks to your business if you experience problems with this product or service?
  • How can you be sure that the product or service you receive will actually meet your requirements?
  • What do you know about the reputation and historical performance of your supplier?
  • What level of confidence do you need in your supplier’s ability to provide you with conforming products/services on a consistent basis?
  • If you decide that conformity to ISO 9001 is important (based on your assessment of the risks associated with the products and services you’re buying), how can you be sure that your supplier does have a QMS that meets ISO 9001 requirements?
Want to learn more about what benefits ISO 9001 brings to an organisation? See our latest White Paper for a comprehensive overview of the world’s most popular management standard.