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Author: Hannah Butterworth

DBS checks for contractors: A guide for housing associations

Every discipline that a contractor resides within will have specific industry standards that they must meet in order to carry out their job, but aside from these, within the housing association, there are internal standards and requirements that contractors must meet. For example, if a contractor is going to come into contact with a vulnerable person, such as the elderly or children, they need to be DBS checked.

What is a DBS check?

A DBS check is a record of an individual’s unprotected convictions, cautions, reprimands and warnings that can also include intelligence held by the police that relates to an individual and their suitability for a job position.

Organisations such as the housing association can request that their staff, volunteers or applicants have been checked, but only if they are working/volunteering/applying for a position that is exempt from the Rehabilitation of Offenders Act 1974.

There are four different types of checks available:

Basic checks

These can be requested by an individual or by the employer for any role and will show all unspent convictions.

Standard checks

A standard check will show any unspent convictions, cautions, warnings or reprimands along with any spent convictions and cautions that are not eligible for filtering. A standard check is suitable where applicants won’t be working with children or groups that could be described as vulnerable.

Enhanced checks

An enhanced check is suitable where the applicant will be working with children, young people and vulnerable groups. This check includes all information described in the standard check as well as intelligence held by the police if they believe it is pertinent to a recruitment decision.

Improve your social housing contractor compliance today >

Enhanced with DBS Barred list checks

This will show the same information as an enhanced check, along with any information that is held on the barred lists.

Why are they important for housing associations?

As housing associations are sometimes described as ‘supported accommodation’, there are a certain amount of services that must be provided in addition to housing, and this includes ongoing maintenance and emergency repairs.

With many housing associations providing homes to the elderly, people with mental health problems or disabilities, vulnerable families with children or even younger single people, it is a requirement that anyone who is carrying out work for the housing association to have an enhanced DBS check.

As mentioned in our blog, Health and safety manager’s guide to monitoring social housing contractors, it’s important to monitor your contractors against your standards and KPIs on a regular basis, a DBS check should fall within this monitoring process.

DBS checks could also be used as a preliminary screening tool for employing new contractors, as those whose results don’t come back as you would like, can be removed from the process.

What else should you think about?

DBS checks for contractors aren’t the only thing that your contractors will need. It’s important that when on boarding any new contractor that you ensure they have all of the right certifications and insurances to show that they can do their job correctly.

As with the DBS check, if there is ever a safeguarding issue where your organisation and the people working with children or vulnerable groups have not been adequately checked, your organisation could be held legally liable, so you need to make sure that you have all of the relevant documents in order.

Contractors management best practice

After reading this blog, you might be feeling a little unsure about how to best manage and monitor your social housing contractors to ensure that they’re meeting requirements. DBS checks are clearly important and need checking periodically – if you haven’t got a system in place to check and monitor these, however, now is the time to begin looking for a solution.

For more information and tips on monitoring and managing your contractors, download our eBook, the Best Practice guide to social housing contractor compliancewhich will teach you all you need to know about the contractor management best practice.

Download the all-in-one PQQ checklist for Housing Associations

Modern Slavery Act: 5 steps to compliant social housing contractors

Modern Slavery Act for social housing contractors

As of January 2016 the Modern Slavery Act (MSA) is in force. The MSA aims to combat crimes of slavery and human trafficking by creating criminal offences and powers of enforcement.

Modern Slavery Act definition

The MSA says that businesses have a role to play in reducing slavery, and has imposed obligations on large organisations, including housing associations, to publish a statement at the end of each financial year that proves they have no involvement with slavery or human trafficking.

While the obligation falls only on large housing associations (those who turnover £36m), smaller housing associations can publish a statement if they wish, and it would be considered best practice for this to be the case.

The obligation on a housing association to consider whether such crimes exist within their business extends to its supply chains which includes anything which enables the organisation to provide services to its end user.

By outsourcing or sub-contracting, housing associations need to consider how to carry out the necessary checks and standard terms should be introduced with contractors to ensure that they are aware of the housing associations stance on modern slavery.

As reputation is key for housing associations, for the impact on customers and stakeholders, it’s vital that housing associations take the MSA seriously and make an effort to adhere to the obligation.  With reputation in mind, here is how you can ensure that your social housing contractors are compliant:

1. Verification

This step should take place at the beginning of the on-boarding process – it includes checking that a contractor’s standards and industry certifications are in order before any work begins.

Typically, this can involve you and your team working to verify insurance, certifications and other claims a contractor might make when pitching for work – you should never rely on a contractors claims alone.

At this point you can ask your contractor to provide you with documentation to show that they abide by the MSA.

Improve your social housing contractor compliance today >

2. Authorisation

Authorisation is the process of approving a contractor to deliver work for your company – this means authorising contractors to do specific jobs. Once you are satisfied that your social housing contractors have met your assessment requirements, you need to ensure that they have the relevant information and documentation so that they can begin work.

Once a contractor is authorised, it’s time to put them on your ‘approved contractor’ list – this is often underrated, but it’s important. You don’t want a non-approved contractor to slip through the cracks and carry out work for your housing association, especially if they aren’t biding by the rules of the MSA.

3. Policies and rules

Create policies and rules that clearly explain to your contractors what you expect and want to see from them, this includes requiring them to abide by the MSA laws.

Make sure that you’re using a good IT system to disseminate the information and get acknowledgements back that your policies and rules have been received and understood by the contractor – this will cover you and the housing association, should the worst happen.

4. Monitoring

As explained in another of our blogs, Health and safety manager’s guide to monitoring social housing contractorsyou need a process in place where you can monitor the progress of your contractors against the targets and contractual specifications that you have set for them.

This can be in the form of an audit, which can assist your housing association in identifying areas for improvement and assess the performance of your social housing contractors in accordance with your KPIs, which is crucial to maintaining your high standards and reputation.

5. Implementing contractor management best practice

In this blog, we have only touched on the surface of best practice for managing your social housing contractors. If you’d like to learn more about how you can implement measures to ensure that your social housing contractors are compliant, you should download our eBook, the Best practice guide to social housing contractor compliancewhere you will learn tips about how you can achieve contractor compliance.

Download the all-in-one PQQ checklist for Housing Associations

All-in-one social housing PQQ checklist launched by Altius

Between PAS 91 and the Government’s Public Contracts Regulations 2015, PQQ templates for housing associations have become standardised throughout the industry. Gathering mandatory information has been simplified, especially with the support from online procurement organisations to screen contractors and suppliers in the first place.

However, despite the assistance from the Government on PQQ best practice, this mandatory information is sometimes not enough for procurement, contracts and health and safety managers in the industry.

The use of adapted PQQs or bespoke contractor questionnaires is now common place within the industry, particularly during a due diligence process with new contractors. To help you define a PQQ template that retrieves all of the relevant data needed to meet your specific company requirements, here at Altius we’ve created a checklist to give guidance on developing your own bespoke version.

Introducing the checklist

The All-in-one PQQ Checklist for Housing Associations covers both the basic information you must have on a PQQ, plus key additional information, for example; CRB checks, Modern Slavery, working with vulnerable adults, and health and safety details.

The free and downloadable checklist also include tips on implementing a new PQQ into your current contractor management process, focussing on:

The PQQ process

If you’re currently reviewing your PQQ process, then the idea of doing this in-house or to outsource has probably crossed your mind. The checklist will help you assess your current operations and whether you are best to handle this internally, or outsource if you lack time and expertise.

PQQ collection

Manual collection by posted physical copies, or emailed word documents is certainly easy to set-up, however, postage and compatibility problems mean that this manual way of collecting PQQs and managing contractors is somewhat flawed. Likewise, some software solutions can be too basic on not offer a full solution to meet your internal requirements. The checklist looks at both alternatives, and assesses what is right for you.

Ongoing contractor assessment

Following the introduction of a new PQQ, how are you going to maintain, audit and assess contractors to ensure they are still eligible to work with you? This section of the checklist will look at how a new process, whether it be done in-house or outsourced, can help to not only ensure contractor compliance, but also raise quality within the contractor’s work too.

Download the checklist

To get your hands on a copy of the All-in-one PQQ Checklist for Housing Associations, and see how you can begin to implement the right PQQ into your contractor management system, click here.

Download the all-in-one PQQ checklist for Housing Associations

5 key speakers to watch at PfH Live 2016

Key speakers at PfH Live 2016

This event has now passed.

Procurement for Housing is set to welcome over 8,000 delegates to their biggest exhibition and conference yet, PfH Live 2016 in Manchester. Last year saw some great insight from the panel sessions on key industry topics and issues – and this year is no different.

Over the three-day event, PfH, combined with the Housing 2016 conference and exhibition, will welcome more industry experts from across the country to share their experiences and expertise on better procurement for housing associations. Of the many seminars and panel sessions set to be hosted in June at the Manchester Central Convention Centre, here’s five that you must take the time out to watch.

1 – Mark Easton – BBC (with a guest panel)

Just over one year on from the general election, the government are delivering their policy agenda at pace. So far housing policy has been at the centre of this, from Right to Buy, pay to stay and the introduction of starter homes and a renewed emphasis on creating a nation of home owners. With four more years left of the parliament, what do Number 10, the Treasury and DCLG really think about the future of the sector? Add the EU referendum into the mix, which falls five days before the conference, and we have a potentially very interesting four years and possibly beyond.

2 – Nicola Robinson – CIPS & Fiona Adams – Stonewater Housing Association

The supply chain is the backbone of the business and is also an enabler for effective business strategy execution. In this session, you will explore how to create, control and leverage your spend throughout the entire supply chain.

Improve your social housing contractor compliance today >

3 – Jo Meehan – University of Liverpool

The importance of contract management and how it can be leveraged to gain more influence to effect positive strategic change and impact procurement at sourcing stage.

4 – Magnus Walker – PfH

Driving procurement excellence in volatile markets can be challenging and we have to know how to offset the risk to ensure best value is obtained. In this session, you will take lessons from one of the most volatile markets – energy – and will hear challenges and experiences from the sector to offer practical insight.

5 – Isabel Hardman – The Spectator (with a guest panel)

The guest panel will examine and explore what social housing may look like in 10 years and how the sector should/could respond to this. Themes to be discussed include: what will the mission be? What will the Housing Benefit bill look like in 5-10 years?

Going to the event?

Let us know your views on the exhibition, conference, and the key speakers you have seen throughout the event and post your thoughts on the comments box below.

Download the Best Practice Guide to Social Housing Contractor Compliance

Health and safety manager’s guide to monitoring social housing contractors

Keeping on top of all your social housing contractors can be a tough task, especially when you have to oversee a variety of areas, from plumbers, electricians to even window cleaners. Every project that each of your contractors’ works on is different, with different policies, requirements and targets.

But, by having a stringent process in place for monitoring your contractors, you can make your job a little easier, and the management of contractors a lot more effective.

Here at Altius, we believe that contractor monitoring can be done effectively in all housing associations in three steps, behaviour, audit and KPIs. Below, we talk about each of these steps in detail:

Contractor behaviour

The physical monitoring of contractors is crucial to ensuring that your contractors are complying with the policies and rules that you have set for them. While completing an on-site assessment is more time consuming than a desktop audit, you will also gain a greater sense of knowledge that you wouldn’t have achieved otherwise.

Monitoring the behaviour of your contractors on-site also gives you the chance to make sure that they’re performing against the specific requirements the housing association asked. For instance, if they’re working in areas with vulnerable adults or children, it’s important that they are suitably trained and are performing their duties without disruption.

Improve your social housing contractor compliance today >

Remember, people behave differently when they know that they’re being observed, so use processes that are discreet. While you’re conducting your observations, make sure to give contractors feedback, including areas where they could improve and credit for doing their job well and to your standards.

Introducing audits

Many companies – housing associations included – don’t think that audits are necessary until they realise that one of their contractors is underperforming, by which time, it is often too late to fix the problems.

By introducing audits at the beginning of your working relationship with social housing contractors, they won’t just see audits as a negative undertaking, carried out only to find problems with their processes. Having their backing with audits will be of benefit to you both.

The audit process should be combined of desktop and on-site audits, which involves checking contractor information and certifications against the standards set by the housing association, and then physical monitoring of contractors should you decide that this is required. For more information on using this multi-layered approach, take a look at our blog ‘How to conduct your social housing contractors audit effectively’.

Key performance indicators (KPIs)

KPIs are practical and objective measurements of progress used to monitor performance, and should be used when you’re monitoring social housing contractors. They are designed to compare the performance of a contractor to a predetermined goal, or against the required standard of practice.

Your KPIs should be set at the beginning of your working relationship with all contractors, which give you a benchmark for assessing their performance. Remember, the KPIs that you set will vary depending on the job that the social housing contractor will be doing for the housing association, try to be as specific as possible so that you can have a clear indication of how they’re performing in their role.

As you can see, this step goes hand in hand with the previous two when it comes to effectively monitoring social housing contractors – so, all three should be implemented to your monitoring process.

Best practice

The monitoring of your social housing contractors is just one stage in the process of gaining contractor compliance, and works best when implemented alongside the other steps our supply chain performance framework, namely ‘capability’ and ‘management.

If you’d like to learn more about how to achieve compliance with your social housing contractors, you should download our eBook, the Best practice guide to social housing contractor compliancewhich shares with you, tips and recommendations to ensure that your contractors are compliant.

Download the all-in-one PQQ checklist for Housing Associations

How to conduct your social housing contractors audit effectively

Social housing contractors

When it comes to your social housing contractors, as a procurement manager, you have got a lot to monitor and manage, ensuring that they’re all compliant with your housing association regulations. One way of staying in complete control of your social housing contractors is by conducting audits…

On-site auditing, when effectively implemented, can arguably be considered one of the most important tools in the quality system tool box. By introducing audits into your housing association you can identify areas of ineffectiveness, enabling you to take corrective action, and ultimately support continuous improvement.

The right people

As well as figuring out whether you have the time internally to complete contractor audits, you need to ensure that these people have the right training and qualifications to complete such assessments.

While your in-house team might have the correct qualifications to complete an audit, you need to consider whether or not it would make more sense to organise further resource, such as administrative staff to help chase and organise the details that will come back following an audit.

There is always the opportunity to outsource your audits to a company that specialises in audits too, as they will handle the whole process for you, documentation included. This might be beneficial if you’re struggling to find the right people and the resource needed internally – keep in mind that the end result of any audit is to manage your contractors better.

Desktop audit

Using the desktop audit initially, you can check your contractor information, such as their certifications, insurance documents and background to make sure that they meet your requirements – keep an eye on certifications that are coming up for renewal!

This type of audit could also help you to open dialogue with contractors concerning opportunities for improvement and how they could bring a mutual advantage, perhaps a course training them specifically to work with vulnerable adults.

Improve your social housing contractor compliance today >

On-site audit

If following your desktop audit, you determine that further checks are required, this is when an on-site audit should be considered. If there’s a particular problem that you have identified with a contractor you should take action to investigate and identify the cause of the problem by carrying out an on-site audit.

From this point, you can suggest corrective actions and submit them for approval, once approved the changes can be implemented and tracked using KPIs to monitor effect and performance.

This multi-layered approach allows you to assess your contractors as efficiently as possible, while ensuring any problems are resolved.

Continual monitoring against KPIs

Conducting your audit is a way of monitoring your contractors – by doing this, your team can regularly check the compliance of contractors, provision of resource and the ability to continue working with the housing association in the future.

Don’t wait until you notice that a contractor is underperforming before you start to implement the auditing process, by this point, it is often too late. Your audit should be undertaken on a regular basis and use a multi-layered approach of desktop and on-site audits.

Define your policies

Even if you have all of the previous points in place, you won’t achieve an effective audit of your social housing contractors if your policies aren’t up to scratch.

By making sure that your contract requirements, policies and project specifics are clearly outlined to your social housing contractors, you will be able to avoid any claims of misunderstanding when you carry out your audit. These documents should also be readily available for any of your contractors to access at any time, should they wish to do so.

Contractor compliance best practice

Conducting effective audits with your social housing contractors is only part of the process when it comes to ensuring total contractor compliance. If you’re looking to achieve better compliance within your housing association, you should download our new eBook, the Best Practice guide to Social Housing Contractor Compliancewhich takes you through achieving compliance, step by step – while giving you tips along the way!

Download the Best Practice Guide to Social Housing Contractor Compliance

5 qualifications you should expect your social housing contractors to have

Social housing contractor qualifications

Reputation is extremely important when it comes to the success of a housing association, and a lot of a housing association’s credibility is built on their contractors and the work that they carry out, in terms of quality and timescales.

With this said, it is becoming increasingly important for contractors to hold and maintain recognised and up to date qualifications to prove their ability to work, alongside their relevant experience and references.

While many contractors might argue that taking time out to get training, or re-register their qualifications is the last thing on their minds, especially as another contract beckons, those that do hold qualifications will stand out from the crowd – making it easier for you to decide which contractors to employ next.

As a procurement manager, you’ll be dealing with a wide range of contractors and sub-contractors, all carrying out different projects for you – so there’s a lot of different qualifications out there for contractors (way too many for us to cover here), but here are 5 qualifications that you should look out for when on boarding your social housing contractors.

1. PRINCE2 (Projects in controlled environments)

Used extensively by the UK Government, PRINCE2 is also widely recognised and used in the private sector, both in the UK and internationally – it is used to show that an individual or business has a process based method for effective project management.

Gain a better understanding of your prospective contractors >

In order to gain the accreditation, contractors will have had to show that they have a common and consistent approach to projects, ensuring that they are controlled and organised from the start, the middle and to the end.

They will have also had to provide proof that they regularly review the progress of the project against the original plan, and provide justification of the project to the business. These skills will be beneficial when hiring social housing contractors to carry out projects for you.

2. MSP (Managing Successful Programmes)

MSP represents proven programme management best practice in the successful delivery of transformational change through the application of programme management.

A contractor that holds this qualification will have had to prove that they are able to utilize best practices in programme management to successfully deliver transformational change, carry out coordinated organisation and implementation of projects to achieve outcomes in a timely manner and also to manage the solutions developed and delivered by projects into the organisations operations while maintaining a high level of performance and effectiveness that you would expect.

3. Involvement with the CPD

The CPD are Continuing Professional Development is the term used to describe the learning activities that professionals engage in to develop and enhance their abilities. Being part of the CPD shows that the contractors you are looking to employ stay up to date with the latest training workshops and are continually looking to improve their skillset.

Engaging with CPD activities ensures that both academic and practical qualifications don’t become out-dated or obsolete for your contractors which means that you will have greater reassurance that all qualifications are at the level that they need to be for working with the housing association.

4. ISO 9000 – Quality management

The ISO 9000 family addresses various aspects of quality management that provide guidance and tools for contractors and organisations who want to ensure that their products and services consistently meet customer’s requirements and that quality is consistently improved.

Standards are based on a number of quality management principles that include a strong focus on the consumer, the implication of management process, and the approach to continual improvement.

5. ISO 14001 – Environmental management

The official definition by the ISO agency of ISO 14001 is ‘an internationally agreed standard that sets out the requirements for an environmental management system. It helps organisations improve their environmental performance through more efficient resources and reduction of waste, gaining a competitive advantage and the trust of stakeholder’.

Using contractors that hold the ISO 14001 qualification will help the reputation of your housing association as it shows that the housing association is committed to meeting its corporate social responsibility goals, which can help to maintain the trust of stakeholders.

Checking the viability of prospective contractors

As a procurement manager, you will know that the Pre-Qualification Questionnaire (PQQ) templates have become standardised throughout the industry. However, sometimes this mandatory information isn’t enough when it comes to on boarding your contractors, especially if your housing association has internal standards in place.

This is where the use of adapted or bespoke PQQs come into play. If this is something you feel that your organisation needs to identify the correct social housing contractors, you should download our eBook, The all-in-one PQQ checklist for housing associations that can give you guidance to create your own version.

Download the all-in-one PQQ checklist for Housing Associations

Free seminar briefs businesses on revised Health And Safety Sentencing Guidelines

Businesses are invited to find out how to protect themselves against stiffer penalties under the revised Health And Safety Sentencing Guidelines at a free seminar in Leicester on Tuesday 26 April 2016.

Keynote speaker Phil Taylor, Head of Health and Safety for supermarket group Morrisons, will join compliance and legal experts from joint hosts Altius and Howes Percival LLP to explain the updated Sentencing Guidelines.

The expert speakers will advise businesses on what they need to do to comply with what Health and Safety Laws, including CDM 2015, and what measures they can take to ensure they don’t get caught out by bigger fines and possible prison sentences under the revised Sentencing Guidelines.

Nowhere to hide with new guidelines

With stiffer sentencing guidelines for health and safety, corporate manslaughter and food safety and hygiene offences, now introduced in England and Wales, organisations should tighten up health and safety compliance and push it further up the board room agenda, says Gary Plant, Managing Director of health and safety compliance specialist Altius.

He continued: The new guidelines mean there is nowhere to hide when it comes to facing up to health and safety breaches and even if procedures and policies are robust in your own organisation, you could face exposure from suppliers. It is business critical for organisations to scrutinise their health and safety policies, training and compliance, and ensure that risk is assessed across the entire supply chain and standards are applied and continuously monitored.”

The Information on Revised Health And Safety Sentencing Guidelines half day seminar (10am to 2pm) will take place at Howes Percival’s Leicester offices.

Event details

Date & time

Tuesday 26th April, 10:00am – 2:00pm


Howes Percival LLP, 3 The Osiers Business Centre, Leicester, LE19 1DX



Book your place at the free seminar >

The perfect supplier audit: A Q&A with supply chain industry expert

The development or use of audit systems ensures that your team can regularly check the compliance of suppliers, the provision of resources, and the ability to continue serving your company in the future. Reminders and records of previous audits are invaluable when dealing with a large supply chain.

Many companies implement auditing when a supplier is underperforming, by which time it is often too late. Additionally, this means suppliers see audits as a negative undertaking, carried out only to find problems in the process.

To find out more about creating the perfect supplier audit, Altius Managing Director Gary Plant answered your most commonly asked questions.

What is the current situation regarding auditing of suppliers and how effectively do organisations handle these?

The term audit, in a non-financial context, is used somewhat loosely to cover a multitude of supplier checks or interventions undertaken by a customer organisation, or their agent. The most commonly used meaning is where the checks are undertaken at the supplier’s site and this is my focus.

There are many examples of large numbers of audits being undertaken in some sectors, particularly where there are safety risks. Why should this be the case? The audit is used as a tool to check the supplier is doing what he is supposed to be doing, i.e.meeting legal requirements, behaving how the customer expects him to, knows what he is doing, acting safely and, most importantly, not causing the customer any problems.

Is there room for improvement?

If the audit finds problems, and many do, what does this mean? A common conclusion is that the supplier is not good enough and he’s told to do better. Sometimes he’s replaced completely. It’s not uncommon for more audits to be commissioned, since the results show that there are problems and they need to be identified and dealt with. Could it be that what the audit is really telling us is:

Best Practice Guide to Supply Chain Compliance Now Available >

Most suppliers want to do a good job and keep their customers happy. We need to make sure we choose these suppliers, make sure they understand what we want (and don’t) and use audit processes to monitor whether or not both parties are getting this right. Once we do get supplier selection, wider assessment and communication right, we can do fewer rather than more audits, which will save both time and money.

What is the key to a successful audit of suppliers and supply chains?

The key to a successful audit is to clearly define its purpose. The famous Pablo Picasso quote “Computers are useless. They can only give you answers”, could be adapted to audits, which could be described as only exposing problems and, therefore, not always constructive. While it’s convenient to blame the supplier’s shortcomings, this is unlikely to make things better.

Where should organisations start, or what should they demand of their audit supplier?

The audit should be undertaken for a specific purpose, for example, to ascertain whether or not the supplier’s operatives are aware of the customers’ requirements with respect to safety. An audit of a contractor could be undertaken to check that their operatives know what the customer’s policies and procedures are with respect to contractors working on their premises.

Without this clarity of purpose, it is likely that the supplier, and indeed the audit provider, will fail to meet the customers’ expectations.

What kind of issues need to be examined?

Any audit should be limited to matters that pose risk to the client’s business, yet they are frequently used unnecessarily, e.g. to ensure effectiveness of a supplier’s quality management system, despite the fact that the quality of the supplier’s products presents no risk to the customer. Audits are too often undertaken because it’s standard policy, without questioning the sense of that policy.

How can this be done effectively, without just relying on what suppliers themselves say?

Audits can confirm that there is evidence that the customer’s requirements have been met. Where that evidence cannot be found, we can’t know whether or not the requirement has been met. What the supplier tells us doesn’t really change that so we can’t be sure we’re safe from the original risk.The supply chain process needs to be adjusted to make sure the evidence is available in future. It could be as simple as making sure the supplier knows we want it.

How far down the supply chain should such audits go?

It could be argued that the ideal scenario is that no audits are done at all because the customer has total confidence in the supply chain process and supplier and doesn’t need to spend any money checking. In the real world, some monitoring is necessary, but it should be effectively targeted as part of a wider compliance framework. This will minimise cost and reduce timescales.

Audits are a valuable monitoring tool for suppliers, but they are expensive. Who should monitor your supplier’s suppliers? Surely they should. If you require them to have effective supplier management in order to fulfil their obligations to you, then they should be able to provide evidence they’ve done so.  Have you made them aware of your requirements?

Best Practice Guide to Supply Chain Compliance Now Available >

If, however, you decide to audit your supplier’s sub-suppliers, in doing so you take away your supplier’s responsibility to do it. If something goes wrong, they will rightfully point out that you audited them and said they were OK.

What are the limitations here, either due to practicalities around working with suppliers or the limitations of the audit providers themselves?

Audits are a tool that will help you understand if your processes for buying-in goods and services are working, that’s all.  They won’t help if you choose the wrong suppliers because of a poor selection process. They won’t help if you fail to enlighten the supplier as to what you do and don’t want from them. They happen very late in your process and are a sample at a point in time and at a single location.  The very best audit service provider will add little value if they’re not given a clear idea of what you are looking for evidence of.

Is there more that can be done?

Audits are, however, invaluable when used in the right circumstances. Use them to find out if your processes have worked, particularly for processes that bring about specific outcomes or protect you from risks associated with purchasing goods and services. If the audit uncovers shortcomings, it may be an indication that your processes didn’t work, rather than a supplier failing. This is an opportunity to examine whether you need to fix the process, rather than doing more audits or blaming suppliers.  Do that and the audit is worth doing.

Is there a need for procurement to work together with other procurement organisations across sectors to put pressure on both auditing organisations and suppliers to improve the quality of audits?

There are nearly always benefits from working together to bring about improvements. I would suggest, however, that if things aren’t improving in your supply chains, it isn’t because you need better audits!  If your audits say everything is fine when it clearly isn’t then you need better audits, but if your audits are uncovering poor suppliers, then you either need better supplier selection procedures and supplier management processes, or you need to examine whether your auditors are asking the right questions.

How else could such audits be made more effective?

Audits are most effective when they are used for their intended purpose. If your freezer is keeping food at +10C, you don’t buy a better thermometer.Get a clear idea of the risks associated with buying in products and services and understand what you will require from suppliers to protect yourself from them. Choose suppliers that are capable of doing what you want.

Make sure they understand what you want, including what will be done or delivered, the behaviour you expect and the evidence you require.  Use audits to see if everything is as you asked. If it isn’t, make improvements for next time and use audits to see if things have improved.  Repeat as necessary!


Eight critical KPIs for assessing your supply chain performance

After choosing a supplier to carry out the work you require, your attention should shift towards the contract, and what can be done to ensure it is fully executed. Between you and the supplier, you should be: ensuring you both fulfil your expectations of each other, manage the risk and any supply chain vulnerability, and deliver continuous improvement and learnings.

To do this, key performance indicators (KPIs) should be identified at the start, and monitored against on a regular occurrence, to ensure the supplier is performing to the standard you require. Of course, the KPIs you look to monitor against will differ depending upon the supplier’s work.

To give you a head start, here’s some objective KPIs you could look to implement:

1 – Delivery time and completion

For suppliers who will deliver goods to you or your clients, how often are deliveries made on time? How many of these deliveries result in issues, damaged or incorrect goods? The supplier should take the lead in assessing these KPIs on a frequent basis, making sure information and performance are shared in regular meetings.

2 – Level of non-conformance

Whether they’re delivering a product or service, how many times, or what percentage, has the supplier’s work resulted in something that doesn’t meet your standards. As well as recording the incidences, this KPI should also focus on what specifically has gone wrong, and what can be done to eradicate it in the future.

Non-conformance can also be attached to the controls and restraints you put in place as part of managing your suppliers. If you’ve expressed that an electrician should not enter the second floor, of the building for example, this should be recorded and fed back to the supplier’s operational team.

3 – Invoice accuracy

While financial details should have been organised from the start of on-boarding your new suppliers, the accuracy of invoices of suppliers that work with you frequently, could become a KPI to track. With so much on your plate already, the last thing you want to be doing at the end of the financial year is to be chasing suppliers for their final invoice of the year.

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Delays in invoicing, as well as inaccuracies in the amounts, can lead to disruption not just in your supply chain, but in your whole organisation too.

4 – Project milestones

One-off or infrequent suppliers would find project milestones more useful. No matter what the project, time and cost are always two of the biggest KPIs that supply managers need to keep track of.

There’s always going to be incidences that increase the money or time spent on a project, but by clearly planning and talking through the project with your suppliers, you can hold them accountable too.

5 – Customer complaints/returns

Probably one of the biggest frustrations for a supply chain manager is discovering that a customer has complained about the quality of product or service from one of your suppliers. As well as feeling let down by your supplier, the fact that your business was the ‘face’ of the purchase makes it an even hard pill to swallow.

Of course, there are always going to be complaints and returns for some products, it is a case of assessing what the natural amount of comebacks you may face, based upon the number of products or services you sell. This also provides a great learning curve for your relationship with your new supplier to eradicate problems as early on as possible.

6 – Flexibility

The ability for suppliers to change depending on yours or your customer’s needs is essential in a fast-moving economy. Can your supplier meet your two-week deadline change? Are they able to be flexible enough to change their logistics 24 hours later? Whatever your requirements, flexibility may be a KPI that suits you and some suppliers.

7 – Levels of waste

At a time when corporate social responsibility is a big part of a business’ goals, the pressure on large organisations to control what their supply chain does too is increasing. Recycling, landfill disposal, carbon footprint and CO2 emissions are just four areas that you may wish to track and monitor your suppliers on.

8 – Communication and compliance

As well as attending monthly meetings, or updating you on the latest project, you could monitor your suppliers based on their compliance feedback. Have they given you the latest version of their insurance when their last policy expired? How long have they taken to get back to you on your compliance questions? Do they still hold the industry certifications they need to undertake work?

If your suppliers fail to meet the basics of giving you compliance information, who knows what they may be hiding when it comes to the physical work you signed them up for in the process. This is why continual improvement, communication and relationships with your suppliers are important.

The right KPIs for the right suppliers

From these eight examples above, you will understand that key performance indicators have to be chosen in line with what the supplier will do for you. While you will always expect that suppliers will perform at 100% all of the time, this is un-sustainable and a suitable target KPI should be set between the two of you to deliver a quality service while giving room for continuous improvement.

To find out more about KPIs and how they can help to increase the performance of you supply chain, download our free guide, ‘Introduction to Supply Chain Compliance Best Practice’.

Best practice guide to supply chain compliance

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