Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

18.3.3 Audits and Procedures for Assessing the Quality of Organizations

Intended learning outcomes: Identify the quality audit. Differentiate between first-party or internal audit, second-party audit, and third-party audit.

An audit is a formal examination [MeWe18]. This is generally understood as an act of hearing that is conducted by third parties according to well-defined criteria and rules.

ISO 8402 [ISO8402] defines a quality audit as a “systematic and independent examination to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve objectives.”

Probably for all areas of life, individuals and organizations are accustomed to periodically taking stock of where they stand, deriving opportunities and goals for improvement, and checking progress toward achieving these objectives.

Possibilities for conducting an assessment include external procedures of the audit type on the one hand and self-assessment on the other. Self-assessment results in strong identifi­ca­tion, strong learning effects, and considerable self-motivation. The disadvantage can be that people, especially if they have little experience in assessing, tend toward mis­judgments and can consciously distort the facts. But external audits also have the subjectivity of persons as a fundamental disadvantage, of those that establish the measurement criteria as well as of those that perform the evaluation according to these criteria. For this reason, the culture of the assessors appears to be the greatest factor influencing the assessment process.

Three types of audits provide an option for more formal assessments (see [Pira97] for further details):

  • A first-party or internal audit is performed by trained auditors who assess individual company areas. The auditors are selected from within the company but are independent of the area being audited.
  • A second-party audit is performed by customers who evaluate their suppliers. Customers are typically interested in details of the product and process design. If the supplier has a quality management system in place, this type of audit can be limited to assessing that system.
  • A third-party audit is performed by external agencies that are specialized in this task. This type of audit can be conducted in connection with quality awards, but it generally does not entail durable improvements. Instead, company-in­ternal employees should be trained in assessment. External agen­cies can then, for example, participate in the company’s inter­nal audit in an advising role on methodology.

Course section 18.3: Subsections and their intended learning outcomes

  • 18.3.4 Benchmarking

    Intended learning outcomes: Differentiate between benchmarking in very different industries and of different sizes at the level of the general management, and benchmarking with other firms in the same industry sector.