Interview: Evolution of Supplier Audit in the Era of “Social Distancing”

         (Pic Courtesy: Adam Whitfield)

An estimated 450 million people are working in global supply chains, and many of them face health risks due to the COVID-19 pandemic.

Global Procurement Organizations have an accreditation process to ensure that their suppliers are vetted on several key parameters such as sustainability, financial risk, and information technology security.

The aim of such an accreditation process is to:

• Align suppliers with the organisation’s supplier code of conduct, and
• Reduce supply chain risk.

On-site audits are an important element in supply chain management; they can ensure that suppliers adhere to the company’s code of conduct and other metrics.

However, ensuring compliance is no easy task, and thus, is a major operational inconvenience to procurement teams, especially given the travel restrictions and social distancing norms issued by local authorities across the globe in the wake of the pandemic.

Online Search Interest for the Term “Social Distancing”

The chart above shows that online search for the term “social distancing” peaked in March and April. This is unsurprising, because people across the globe were trying to familiarise themselves with the full import of the term.

As per Google data, the following related queries also gained major traction:

• Social distancing signage
• Social distancing at work
• Social distancing rules

These queries show that people are worried about being infected at their workplace. The search interest data also reveal their eagerness to learn about maintaining distance from their colleagues if and when they are called to work.

Not only going to work, but also conducting on-site audits poses a challenge in these times. However, technology has mitigated this problem to some extent.

Several audit service providers now offer virtual assessment tools through which the compliance of a supplier site can be assessed remotely, using video conferencing. Such tech tools offer procurement teams an alternative way to understand compliance levels at sites without physical inspection.

Beroe spoke to Adam Whitfield, Quality Assurance & Audit Programme Manager at Achilles Information Ltd., to understand how audits are being conducted amidst COVID-19 restrictions. Achilles is a prominent supply chain auditor and offers supply chain risk and performance management solutions.

1. How did the ongoing Coronavirus pandemic impact the way Achilles conducts audits at third-party sites on behalf of customers?
   
   As we take tentative steps into the “new normal,” we are witnessing the adaptation of industry as it navigates a path through these uncertain times. At Achilles, we have had the unique opportunity to watch businesses adapt to life in the new normal and to support them in overcoming the challenges of adaptation.
   
   Those visiting London during rush hour could cast their mind back to the common sight of construction workers on the underground, heading to sites, or returning from a night shift. But all that changed once the infection rates began to spike.
   
   Here in the UK, several of our clients recognised the potential issues posed by their own site activities at the start of the pandemic and decided to halt work as COVID-19 cases steadily increased.
    
2. How challenging was it to conduct audits during the peak period of COVID-19 restrictions imposed by countries across the globe?
   
   Delivering audits during this time has not been without challenges. However, it has also proved to be extremely rewarding and informative. Through the power of technology, our auditors have been able to continue their assessments, and are now gradually returning to visit work sites.
   
   Microsoft Teams and Skype for Business have enabled auditors to liaise with companies prior to visiting their premises. Sending documentation in advance and even “meeting” people prior to arrival ensures that everyone is aware of their responsibilities upon arrival. We even had an auditor direct a site supervisor remotely, using a webcam. The supervisor was able to walk around the site and present evidence to our auditor who was at home, tens of miles away.
    
3. Has there been a change in the operating model?
   
   The gradual return to visit work sites has seen some of the biggest changes to the way companies handle operational work during the new normal. For example, before arriving at the site, many companies request copies of risk assessments or health declarations, as part of their initial COVID-19 control measures. Many also share copies of their own documents to outline the controls that are in place and the rules you are expected to adhere to when visiting.
    
4. Is it not a common practice to ask for copies of risk assessments or health declarations?
   
   While this level of pre-visit communication may be commonplace in some industries, it was certainly not the norm pre-pandemic, and it highlights the underlying caution being exercised by many.
    
5. The term “social distancing” was not even in daily use until the beginning of February this year. How has this concept now worked its way into supplier work sites?
   
   The World Health Organization (WHO) has repeatedly called for adopting social distancing measures to reduce the risk of transmission. For those working in environments where it is not physically possible to distance, we have seen the use of “work pods”—small teams designated to travel and work with each other. Occasionally, individuals have been assigned their own tools and storage areas to prevent cross-contamination through hard surfaces, such as equipment handles.
   
   Perhaps the most widely reported issue during the peak of the pandemic was the lack of personal protective equipment, or PPE. Many companies have had to procure types of PPE that they would have never considered prior to 2020. Facemasks, shields, gloves, and hand sanitizers are now almost as likely to be seen in risk assessment documents or on site as a hard hat.
    
6. COVID-19 may pose a health risk to workers in supply chains across the globe. Can you elaborate on the checks and balances that are required to prevent workers unwittingly being infected?
   
   One of the most important audits we deliver for our customers is our responsible sourcing audit. Assessing a company’s supply chain against recognised labour standards is more important than ever. 
   
   De-centralising offices quickly has reduced the control some companies have when it comes to workforce management. While the use of technology has assisted from a business continuity perspective, it does increase the potential for recruitment processes to be exploited by individuals for whom right to work checks or age verification have been undertaken remotely.
   
   The hours that staff members work have also changed dramatically. Many people that we spoke to during audits would say the change has been for the better; however, there are some who unfortunately are now working excessive hours, with little or no opportunity to refuse. The rapid increase in demand for PPE and new supply routes has seen reports of labour rights infringement and exploitation. Many of our customers are keen to ensure that the changes in their working practices and additional controls to ensure the safety of their staff do not have a negative impact further down their supply chains.
    
7. Has the pandemic accelerated the need to look into the work practices of suppliers too, because of the inherent risks involved?
   
   Companies now have to consider not only the changes to their own practices but also the practices of their suppliers. As in our personal life, what we do as individuals often has far-reaching effects on those around us.
   
   Of course, this has always been the case in business, but more than ever, the current changes may create a large ripple that will be felt thousands of miles away. By working with our customers and their supply chains, we hope to continue to help lessen the impact of the virus on us all.