Getting the auditors in
Link-up – the auditing processes for suppliers to the rail industry – is to be expanded to indicate different levels of competence among qualifying companies
For many years the rail industry has audited its suppliers in accordance to a supplier’s potential for risk. And, of course, this is an essential process for every buyer, ensuring that the important safety requirements are met. However, the way the industry approaches supplier audits is fragmented and in need of change. Firstly, there is a significant level of confusion in the industry over the boundaries between the three key tiers of auditing that exist.
On one level, there is the qualification of a supplier to certified standards, such as the ISO standards for health and safety, quality and environment. On another tier, there is the technical audit, Risas, relating to track-side safety for products and services. But in the middle, there is a critical tier which concerns the pre-qualification and auditing of a supplier’s management processes and systems relating to the way a supplier deals with health and safety, quality and other important policies within the organisation. On Britain’s railways, this audit is offered through the Link-up scheme run by Achilles.
A number of industry members wrongly assume that the Link-up audit is a technical one, evaluating the technical and contract specific capabilities of an organisation. This is just one aspect of the rail industry’s auditing structure that needs to be made clearer, but there are further areas that can be improved and upgraded to provide greater value.
Link-up, the industry’s supplier qualification scheme, is a collaborative community of 3,500 suppliers, of which some 1,300 undergo a prequalification audit on an annual basis. The assessments are undertaken by a team of highly skilled and fully qualified auditors who conduct the in-depth analysis of management processes and systems at an organisation’s head office. At present, this is an exercise which determines whether a supplier is compliant to the defined minimum standards or not, hence, whether a supplier has passed or failed the audit. There is no grading of a supplier in terms of its maturity and approach to its management processes, offering little visibility to buyers of a supplier’s continuous improvement efforts and long-term performance in this regard.
For many suppliers, this is doing them a disservice, as top performing companies are seen in a similar light to those merely attaining a pass. What is more, the auditing process, at present, offers little advice, guidance or feedback to suppliers on how that organisation might improve its processes.
Clearly, there is a great opportunity to change for the better and this is exactly what Link-up is in the process of doing. Under the new Steering Group for Link-up, a Working Group on auditing has been established to find a more ‘value added’ means of conducting supplier audits. Discussions are underway to put in place a ‘star’ system that will rate suppliers on the maturity of their management systems in regard to supplier risk. Suppliers will receive valuable feedback on ways of improving their system, promoting ‘best practice’ and raising standards across the industry. After all, if you only ask for minimum requirements, what is the incentive to go the extra mile? These proposals are similar in many respects to auditing schemes run by utilities and construction industries, where they have been successfully proven to deliver significant benefits for both suppliers and buyers. It is also expected that Link-up will offer a central repository for information relating to the various audit schemes. Users of Link-up will be able to access the results of supplier audits undertaken by other schemes making compliance far more visible to buyers.
Ultimately, the aim is to further align the pre-qualification audit programmes across the industry and to closer integrate the requirements of London Underground/TfL. This would bring huge advantages for many suppliers, reducing the burden of duplicate audits, taking out complexity and reducing costs for the industry.