How should Buyers use Sedex Audit
Buyers particularly in Europe and Asia are more and more using ethical audit to determine risks in their supply chain. The supply chain risks are typically of 3 broad categories
- The branding risk because of bad publicity because of unethical practices in the supply chain
- Logistics risks because disruption which could come from less compliant supply chain
- The risks of quality and consistency
While the ethical audits do determine these risks – it is not easy for brands and buyers to take just a report from any ethical audits and manage these risks effectively.
The major challenges to this process is
- Managing information
- Managing long term relationships with supplier given that the minimum wage and the political climate of supplier location varies very fast in these times
- Managing follow-up of risks uncovered in one audit
Given that there are already challenges in the management of supply chain risks – it becomes very costly if the brand also has to manage the conduct of ethical audits themselves – this is where they use platform like sedex. While information is easily available for sharing between the multiple buyers, sedex does not guarantee any quality and veracity of this information.
The brands /buyers should understand that they are still responsible for the conduct of the audit. It has not been uncommon when good and experienced buyers have insisted that the audit be done by their approved auditing agency. It is common for manufacturers to get themselves audited by local consultants and get a report. This is the single most common drawback for audit reports uploaded on the sedex platform. While it is important to note that many types of audit reports can be uploaded on the sedex platform –not all types of report have the veracity and authenticity and this judgement had to be done by the buyer.
How can you judge the audit Report:
Before you start reviewing a report you should be aware of the
- major labour related issues in the region
- major legislation for labour and environment
- major subcontractor and overtime legislation about the region in which the factory is located.
Review the report for these issues and auditor treatment for these subjects.
HOW TO ASSESS A AUDIT REPORT
- What type of audit trails were investigated by the auditor for these issues?
- What type of documents were assessed and referred to in the audit report?
- Are the photograph taken with time-stamp?
- Are the photograph taken with a Geographical Stamp?
- Is the summary report for each issue in the report detailed enough?
- Any declaration about the conflict of interest mentioned in the report.