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Category: Uncategorised

An SME’s guide to approving contractors effectively

Contractors and suppliers provide assets to your business that you couldn’t do without, but along with the products and services that they bring, they could also bring liabilities, problems, or even adverse PR to your business.

Understanding how to approve your contractors or suppliers effectively will become an integral part of running your business, and it all starts with assessing capability:

Assessing capability

This might seem like an obvious place to start, but all too often, even when contractors are asked to do something that they know is outside of their capability, they will attempt to do it because they don’t want to turn down any business.

While sometimes this can work out in your favour, it can be risky and it’s advisable that you have a process in place so that you can effectively assess your possible suppliers. That’s where the following three points come in:

Information

Information is the critical starting point.

Supplier information is needed to establish that a supplier has the capability to provide you with the product or service that you need. This includes checking that they work in the right geographical area, or that they are a large enough business to handle the contract that they are being considered for.

The requirements for the information that you need to gather will vary from business to business, so make sure that you ask questions that are applicable to you and the service that you’re looking for.

Discover the all-in-one contractor management software >

Verification

When suppliers carry an element of risk, it’s often inadequate to take their claims at face value and it is essential, and sometimes a legal requirement to verify that their claims are true.

Any checks that you carry out must be evidence based and carried out by a ‘competent’ person. The checks can include a ‘tick-box’ mentality where you assess the prospective contractors/ suppliers to meet third-party certifications, such as ISO standards and other certifications that a business might need to operate within their industry (it can also include health and safety regulations).

This evidence shouldn’t just be checked once a year either, it should always be live, up to date and easily retrievable.

Authorisation

Once a supplier has demonstrated that they are capable of providing the products and services that you need, it is vital that you let them know exactly what you have authorised them for. If this doesn’t happen, they might agree to carry out tasks outside their verified scope, which could bring unwanted risk into your business.

In time, you’ll have a list full of suppliers that you have approved, so make sure that it is shared across your business. You don’t want any department to stray from this list and appoint any non-approved suppliers, for example, if they’re cheaper on price. In the long run, that decision could be more costly to you.

How can Altius help?

The steps outlined in this blog can be time-consuming, especially if you’re a small business and don’t have a lot of time to put aside for approving suppliers. Nevertheless, ensuring that your suppliers are capable of efficiently carrying out their duties should be high on your priorities – and this is where Altius Exigo can help you.

Altius Exigo Essentials is a solution that was designed to give you complete supplier and contractor management that is flexible and transparent – and it can help you to take care of the steps outlined in this blog. Interested? Sign up to our webinar below and learn how Exigo Essentials can assist you with any supplier/ contractor management problems.

See Exigo Essentials in action

Managing Contractors: Five practical steps for managing contractor compliance

As a business owner, Procurement Manager or Health & Safety Manager, you have enough on your plate without worrying about how changes to health and safety legislation impact on your contractors; and just hoping they all remain compliant is probably not a sensible option. These issues are critical because a non-compliant contractor represents a serious risk to your business.

As a market leader, we have been helping clients work with their suppliers and contractors to improve relationships and ensure overall compliance, by implementing our “Supply-Chain Compliance Framework”.

Follow these four steps to start that journey yourself.

1 – Be clear on your requirements

The starting point for managing your suppliers is to be clear about what you require from them. While this might sound obvious, all too often suppliers are asked to do something that is outside their capability, but they attempt to do it because they don’t want to turn down business. Also, suppliers often fail compliance audits because they are asked to provide evidence of capabilities to carry outwork which they never claim to have a competence for – just because a rigid procurement process says they must do.

Efficient and effective supplier management requires more than a rigid one-size fits all solution. Each supplier should be managed according to the work they will be required to complete. After all, there’s probably little benefit in asking a small electrical maintenance contractor to evidence a Corporate Social Responsibility and Ethical Procurement policy simply because that’s, “our company policy”.

Key takeaway

Categorise your suppliers by grouping them into the types of work that they are likely to carry out for you. Separately, list all the different types of work that are required by your business, and then list the compliance requirements next to each one. Once that is complete, pair the suppliers to the specific compliance requirements. You now have a starting point for your supplier compliance management requirements.

For easy and efficient management of all of your suppliers, Exigo Essentials provides a comprehensive library of compliance templates.

2 – Get evidence of capability

This is an area of supplier compliance that most companies will be managing to some degree. It is intended to make sure suppliers are capable, on paper at least, of doing what you want them to do.

This starts with gathering information that will demonstrate that the supplier meets your business needs; do they do the work you require? Do they work in your geographic area? Do they have the right level of insurance? Are they big enough to conduct the work being contracted out?

Discover the all-in-one contractor management software >

Gather all of the information you require from a questionnaire and obtain documentation – such as insurance policies, professional certifications, etc., that satisfies your compliance requirements.

When contracting work carries an element of risk, it’s often inadequate to simply take the contractors claims on face value. Therefore it is essential, and sometimes a legal requirement, to check their claims.  This may involve verifying the documentation with third-parties, such as certification bodies, insurance companies, etc.

Finally, once the documentation has been validated, it is essential to let the contractor know, and also to record internally, exactly what they have been verified for. If this isn’t done, they may be asked, and they may agree, to do things outside their verified scope that will expose your business to unnecessary risk.

Key takeaway

Collect the information and documentation you need from each contractor and then contact the relevant third-parties where necessary, to ensure the information is accurate and up-to-date. A solution such as Exigo Essentials contractor management software can store and validate you contractor’s documentation.

3 – Communicate your requirements clearly

As with any form of management, supplier and contractor management requires clear and effective communication. You want to communicate exactly what it is that you are purchasing and expecting from the supplier or contractor. This can extend beyond the actual product or service, for example, warranties, manuals, certification, etc.  The contract is not fulfilled until all specified items are delivered.

Ensure all of your company’s policies and rules have been communicated to your contractors. If you have people working on site, on-site inductions are good examples of processes that are implemented on construction sites to make sure everyone knows the policies and rules. Having a readily available repository of your policies & rules that your contractors can access at any time provides clarity to all parties.

Key takeaway

Make sure your expectations are clearly communicated to your suppliers and contractors. Ensure they have access to your rules and policies for clear and transparent communication. Learn more about Exigo Essentials software and the secure document storage vault.

4 – Monitoring

Once your contractors are fully compliant, know exactly what is required of them and how your business operates, the next task is to ensure you get the service you expect.

Conducting audits can be an effective tool for measuring whether or not all the processes undertaken so far, by you and your contractors are achieving the desired outcomes.  Be careful not to use audits only when situations are taking a turn for the worst. Audits are not a tool for fire-fighting, but are most effective when used to facilitate continuous improvement – rather than a tool of last resort.

Discover the all-in-one contractor management software >

Use your audits to assess contractor behaviour and measure them against key performance indicators (KPIs). At the most basic level, assessing behaviour ensures contractors arrive on time, follow policies and procedures or communicate in a polite and courteous manner. KPIs, on the other hand, allow you to monitor outcomes on an ongoing basis. They are very useful for detecting trends and raising standards once processes are established and stable.

Key takeaway

To maintain strong contractor relationships, you should implement an audit schedule to ensure every contractor is audited at least annually. Findings from the audit should be used to improve performance and processes between your business and the contractor.

5 – Bring it all together

Whilst the four steps outlined here are a practical way for managing supply chain compliance, carrying them all out single handily can be a hugely daunting task for anyone. So, for the four steps above there is one simple solution: Exigo Essentials.

Exigo Essentials is a scalable solution designed to give you complete control and help in managing contractors, processes and tasks, and will easily enable you to take care of the steps we have outlined here. Like the sound of Exigo Essentials? Sign up to our webinar below and see how Exigo will help you implement a smarter contractor management process.

See Exigo Essentials in action

How to manage supply chain cyber security risk affordably

According to a Manpower survey, demand for specialist cyber workers has increased four-fold over the past year, with top experts being paid more than £10,000 a day.

In response to the cyber security issues in the industry, supply chain compliance expert Altius has launched a cyber security software package for those many businesses whose payroll doesn’t stretch to employing £10,000 per day experts.

Altius Exigo

The Altius Exigo software, with licenses available from £167 per month, is a low cost solution for addressing compliance across supplier networks. It gives organisations the option to configure their own compliance framework, either by adapting existing templates and processes or creating new ones using built-in tools.

Exigo has been successfully piloted by global creative agency Leo Burnett to improve management of information security and data privacy across its complex and large supply chain. This is enabling the  world-leading advertising and marketing services agency to reduce risk, ensure compliance and automate management reporting.

Cyber security

“The eye-watering pay packets of cyber security experts demonstrates the demand for specialist support from nervous businesses, particularly in the wake of recent attacks on organisations such as Sony and TalkTalk,” said Len Simmons, Technical Director for Altius.

Discover the all-in-one contractor management software >

He continued “It is essential that businesses check IT security and data compliance among their suppliers – ensuring that these organisations have robust policies and measures in place to prevent common security failures. Organisations may have risk well managed within their own immediate business, but failings by their suppliers could expose them to data and security breaches that have the power to destroy reputations, business partnerships and profit margins.”

Erik Hart, VP Director, Information Security and Infrastructure Solutions at The Leo Burnett Group/Arc Worldwide, said: “Altius has helped us create efficiencies in the way we assess the security and compliance of our suppliers. By utilising the Altius portal we can create automated touch points with our suppliers, as well as generating reporting, as needed, on various data points.”

The software

The Exigo software is cloud-based, so requires no hardware or software installation. It can be integrated with existing enterprise systems and has an in-built audit trail to create full visibility of supplier compliance and enable instant retrieval of records and information. It also provides automated report generation and data exportation compatible with other business formats, such as Excel.

In addition to managing information and data security compliance, the software can be configured to assess performance and compliance for many other areas of business areas, such as health and safety, environmental bribery and corruption policies, CSR, quality, and environmental and employment law.

Altius software and compliance management services are used by many leading organisations as part of their risk management strategies. Clients include Morrisons, Selfridges, Airbus, Trust Inns, Punch Taverns, Arcadia Group, Superdrug, Bellrock, B&Q and Debenhams.

Do you like the sound of Altius Exigo? You can request a software demo here.

Exigo_Essentials_Free_Demo

What Harry Potter can teach us about supplier positioning and management

Just as the fictional school of Hogwarts sorts its aspiring wizards and witches into four houses in the Harry Potter fims, a supplier positioning matrix sorts suppliers into four categories and aids you and your company by minimising the cost of compliance.

Supplier positioning matrix

High risk / High value

Supppliers need to be trusted partners working closely to achieve shared objectives. A deep two-way understanding is needed, especially when dealing with assets that are direct components for your business.

High risk / Low value

Processes need to provide efficient mitigation against risks. Pertinent information needs to protect buyer is essential. This strategic security and investment in facility maintenance and tooling can negate risks associated.

Improve your contractor performance with compliance. Find out more >

Low risk / High value

Buying power can be used to achieve the best deal for customers. Buyers need enough information to get the best from the market. This tactical profit approach is synonymous with consumer purchases such as energy and cars.

Low risk / Low value

Using the simplest possible process to find and use suppliers, only basic information is needed for these tactical acquisitions. Furnitue and stationary are such examples of these kinds of purchases.

Supplier differentiation

By differentiating suppliers on the basis of level of risk and value of business you can prioritise use of compliance resources and use strategies that reflect risk and spend to minimise the cost of supply chain management. For example, it’s not necessary to audit all suppliers, which is an expensive way of achieving compliance. This method can be reserved for where the risk and contract value warrants it.

The most basis checks can be reserved for low risk/low value suppliers, such as stationery vendors, where financial health checks will probably suffice. It’s important to ensure financial solvency of all suppliers and processes such as Company Watch, which is a standard element of the Altius compliance service, make this easy. .

Smart technology and outsourcing routine processes can help make assessment simpler and reduce cost. It’s important to use your resources where they will bring benefit to you and your customers, i.e. the ‘Strategic Critical’ supplier category, where you’ve got the most to lose and the highest chance of losing it.

Free guide to managing contractors

To help businesses better manage contractors, Altius has created the free guide, Improving Contractor Performance with Compliance: A Guide for Facilities Managers. The guide can help you find a better approach to supplier management, give tips on objective decision making, and help you find the right tools for monitoring contractor compliance. Download your free guide by clicking here.

How to introduce your own supplier audit in five steps

One of the greatest challenges of supplier audits is actually introducing it into your workplace in the first place. Both you and your suppliers understand the importance of such audits to mitigate risk, ensure supply chain integrity and stay within the boundaries of the law.

To ensure your own supplier audit is adding-value to your operations and supply chain from first integration, take into consideration these five steps for better auditing practice:

The right people, the right tools

A strong platform internally is required before even contemplating going out to audit suppliers. This requires you to build a team that you can trust to audit, input data and analyse as effectively as possible.

For those firms operating on a global scale, sourcing local freelancers will save you money on travel costs for your core team, but caution is required to ensure you employ the right auditors for you.

Likewise, having the right tools available to your new team is critical to begin the auditing process. This doesn’t just include your internal supply chain software, but also the templates/questionnaires/audit forms that your team will have to complete for each supplier.

Schedule regular audits

How often you should hold audits depends entirely on the size of your supply chain. 12 months is seen as the most popular timeframe to complete audits – but sticking to your schedule and taking the time out every year to dedicate yourself to the process is hard to do.

It’s inevitable in most organisations that supplier numbers continue to grow year-on-year. This growth, coinciding with your existing and ageing database over time means you’ll be exposed to the most basic changes which could disrupt your daily activities. Supplier names, locations and lead contacts, are just three examples of this situation. To combat this, be firm with yourself and your team to ensure regular audits take place.

Best Practice Guide to Supply Chain Compliance Now Available >

Identical supplier standards

To maximise the benefits of your audit and the standards of your organisation, it is essential to audit your suppliers based on the same aspects – no matter where they are in the world. For organisations with global suppliers, this is more important for you.

As well as having a standardized approach, based on UK industry standards that lead the way in global supply chain management, you should ensure that your people and tools can achieve the same higher standard to meet your expectations.

Can a local freelancer 2,000 miles away carry out the same supply chain check as the rest of the team could? This is just one question to think about when introducing your new supplier audits.

Closed-loop process

Once the auditing process has been completed, now is the time to bring that data together to ensure that consistent results are achieved and reporting can be made to share the results with the relevant stakeholders in your organisation.

Ensuring you have a closed-loop process means that audits in the future become easier over time to complete. Verification of existing suppliers, including changing their basic contact details, can be completed more efficiently internally.

Measure audit success and report

After audits, you should be measuring and reporting the success of the latest one you’ve completed. This allows for you and your team to implement improvements and fine tune your auditing process. Questions to ask yourself at this stage include:

These measures can greatly enhance your resource planning and management in the future.

Photo credit: Bruce Guenter

Best practice guide to supply chain compliance

10 facts that will stagger all supply chain managers

When in control of a supply chain, being able to identify and mitigate risks that could be disruptive to your supply chain is likely to be high on the priority list. Or so you would think… Sometimes this doesn’t seem to be the case.

So, here are 10 facts that will definitely stagger all supply chain managers in the industry:

Share this infographic on your site:

If you would like to learn more about how we can help you mitigate supply chain risk, please get in touch today. In the meantime, why not take our supply chain health check questionnaire so that you can see just how well you know your supply chain and where there is room for improvement.

Or download our eBook below and discover how to improve your contractor’s performance…

Download Improving Contractor Performance with Compliance: A guide for Facilities Managers

Photo credit: Tanya Hart

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