How to Use Virtual Supplier Audits to Manage Risks During COVID-19

by Source Intelligence

on September 21, 2020

As we enter the year’s fourth quarter, companies are taking stock, budgeting, and strategizing for 2021. After the initial COVID-induced rush forcing leaders and their teams to quickly adapt to unprecedented constraints, came the time to make long-term plans to strengthen operations and ensure business viability within the parameters of a “new normal.”


Amidst sad news of businesses closing permanently and jobs lost without notice, we’ll point out that 2020 has not been a bad year for all. Some sectors have experienced incredible growth. Home improvement stores like Ace Hardware Corporation reported a second-quarter up 35% YOY. US e-commerce is expected to be up 18%. We’ll gladly take any good news, keeping in mind that every industry has been impacted by a common challenge: their supply chain is in shambles.


Are there any “business as usual” constants in this new economic landscape? There are. Regulatory compliance and corporate compliance are still very much current topics, more so than ever. The pandemic has by no means annulled accountability nor due diligence responsibilities with supplier audits at their core, albeit via a different process.



Virtual Supplier Audits: The Best Alternative

to Field Assessments



As the authors of McKinsey’s Time for Change report state:

“Players previously bound by physical borders are discovering the efficiency of cross-functional virtual teams and, as a result, will continue to break down silos between product teams and rethink the necessity of in-person meetings and travel going forward.”

While we adopted remote work and social distancing as a necessity to protect people’s health, what we knew to be human relationships and exchanges have lost a component: in-person interactions. Family reunions have been postponed, trade shows moved to online venues, on-site supplier audits got canceled. As early as March 2019, the FDA issued a temporary policy for supplier verification onsite audit requirements.

Even as restrictions ease, many organizations have no pressing intention to resume travel plans or even call employees back to the office.


Ensuring business continuity and supplier compliance, however, is an item that cannot be put on the back burner due to “uncontrollable circumstances.” How, then, can virtual supplier audits take over in-person audits, deliver the same level of accuracy, and cover the essentials we thought accessible by physical presence only? Truth be told, technology has many aces up its sleeve and weighs a lot less on budgets, especially in the case of large supply chains. Remote supplier audits will uncover more insights provided they are built following a solid methodology.




Virtual audits follow the same basic principles as on-site audits with the extra benefit of being more flexible. Start from your objectives and work backward listing all the areas you want to focus on and the data you need to collect for each.


While visiting plants or facilities may reveal attitudinal cues, this is only a matter of perception that can be biased in many ways or simply (and literally) lost in translation. Virtual audits eliminate guessing. You can trigger questions based on previous answers and be a lot more thorough than a cumbersome clipboard and script allow, not to mention it produces much quicker results.




Eliminating physical presence doesn’t exclude using the auditing tool as a communication device. Being transparent about expectations and planning ahead of time ensures better supplier engagement. This step includes access to documents prior to response deadlines, giving your suppliers ample time to do their part. They too are under pressure to meet orders, with limited manpower in some cases.


Data Exchange and Security


Digitization comes with risks, and cyber protection and privacy top the list of modern business concerns. Adopt a solution that offers compliance to local and international laws and establishes different degrees of access or sharing on a strict need-to-know basis. In fact, this aspect of auditing allows you to build a closer relationship with your suppliers by sharing information you may have been reluctant to do in person. Lock down the rights of users and protect yourself with confidentiality agreements.


All the data you need can be gathered without setting foot in the field. Should you still want a visual inspection or need to clarify information, mobile devices have come a long way to bring people together while staying safely apart.


All this being said, jumping on the virtual supplier audit wagon should not be an impulsive decision. Rather, think of it as an integral part of your supply chain practices and adopt an intelligence-based approach that can support you in every aspect of your compliance and ethical sourcing efforts.



Why Source Intelligence is the Best Solution for

Supplier Audits



We are proud to have developed a solution that makes a difference and has been recognized as such.


We’ve been making supply chain risk management tools accessible and affordable to businesses of all sizes, which is more important than ever in these difficult times.


Intelligent Virtual Supplier Audits


Conducting a virtual audit via Facetime or scheduling recurring meetings on Zoom will only get you so far (not far). A truly integrated solution seamlessly bridges all compliance aspects of doing business, be it regulatory requirements, ESG reporting, or supplier assessment and onboarding. Our virtual audit program has been designed to facilitate data streaming and incorporate today’s imperatives of productivity, performance, and actionable insights.


Artificial Intelligence


Artificial Intelligence can perform tasks we cannot; not within an acceptable time frame anyway, which is ASAP. Our AI-powered flexible technology will aggregate data and review/validate supplier documents in the blink of an eye, unearthing correlative connections in the process.




Customized Solution


We customize our platform to match your audit requirements. If auditing your supplier includes obtaining intel on potentials risks of modern-day slavery or conflict minerals, it makes sense to tap into our compliance programs on these specific regulations. You eliminate redundant steps and gain a clearer view of risks and are better equipped to take remediation actions. Get exactly the tools you need without paying for extras that you don’t.


Build a Risk Map


Risk-based supply chain management is more important than ever. From disruptions to threats or financial hardship, being able to map and score risks gives you more visibility into areas that necessitate extra attention. If suppliers are within a hot zone for conflict minerals, corruption, COVID-19, or other critical risks, not only would a virtual audit reveal the facts but also populate your unique risk map according to compliance issues or potentially at-risk sourcing logistics.


HubSpot Video


Dynamic & Collaborative Reports


Ironically, as we are asked to keep our distances, cohesion in teams has never been more important. We’re in this together. Now that handing a file over the desk to a colleague is not an option, blurring the borders of compartmentalization is a must. All who are concerned with supplier data (to qualify, onboard, audit on compliance or resilience) can share info and access intel on our platform. You can determine different levels of access and permissions, bypassing territorial obstacles. Legal, procurement, compliance, and ESG stakeholders can truly and transparently collaborate. Generate dynamic reports for regulatory compliance, ESG reporting duties, and cross-match data to gain recommendation insights.


Dedicated Global Support


Global supply chains care little about the limits of time or distances. Our solution comes with dedicated teams of assessors who can intervene in different languages and are well versed in local culture subtleties. Support is available around the clock: 7 days a week, 24 hours, 365 days.


Using intelligence to select and qualify/re-qualify suppliers is bound to become the soundest post-pandemic digital sourcing practice. It’s only logical that assessing suppliers goes hand in hand with compliance programs with as few tools as possible. Why perform audits with one tool, report via another, and share intel using yet another one? The investment in technology cannot be justified if it’s multiplied. A one-stop-shop is the best strategy going forward.


Let our experts show you what a virtual audit and compliance solution is supposed to do.


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