Few people would have thought, six months ago, that the world would be fighting a global pandemic with many countries in some form of lockdown and economic activity drastically reduced. For this discussion, we will focus on the food industry and how it can ensure its operations and safe and hygienic for all participants, from producers to consumers.
The pandemic’s impacts on the food industry have been wide and varied, from restaurants closing to panic buying-induced shortages of commodity items. The challenge for businesses is to adapt their operating models to meet new requirements and prevent waste.
Yet we have already had a taste of such conditions. The 2010 ash cloud shut down most of the European airspace, delaying audits and impacting local freight movement. COVID-19 has similarly halted operations, albeit on a global scale and for an unknown duration. Physical audits and inspections have come to a halt, yet they are cornerstones of a supplier management program.
What, then are our options? To put audits on hold, defer scheduled inspections, conduct assessments remotely? Putting a program on hold is a short-term solution, but are remote or virtual audits truly a viable solution?
Third-Party Audits
In the third-party space, a few standards permit remote auditing. Examples include Red Tractor in the UK and some organic certifications in Europe. Their protocols require agreement from the scheme owner and, where applicable, the accreditation body to permit a remote audit. These audits may include taking video footage in real-time and interactions over the internet.
Depending on the scheme, the risk assessment activity either replaces the certification cycle for the year or facilitates an extension, with the physical audit performed later. For accredited programmes, ensuring compliance with IS0 17065 Conformity assessment — Requirements for bodies certifying products, processes and services is a crucial requirement. In other areas, risk assessment has been the preferred tool to facilitate certificate extension until a physical audit is possible, although this is under constant review.
Second-Party & Customised Audits
Supplier management through second-party programmes offers greater flexibility to adopt remote auditing, as they are created, managed and updated by those who can determine the best fit for their operating model.
The option to simply extend the audit window, conduct a risk assessment and then review impact to the programme is more straightforward in this case. However, adopting remote auditing (with or without video assessments) enables the programme to continue. Reducing the potential challenges of a backlog of audits as the pandemic and its associated travel restrictions ease is a significant benefit. Second-party audit programmes also maintain a risk aware culture amidst increasing supply chain challenges and consumer pressure.
Businesses must carefully consider which suppliers are suitable for remote auditing. Best-in-class suppliers with well-designed programs may be easier to audit but are less likely to be problematic. By contrast, suppliers of concern would typically require a physical audit, and remote audits may be difficult to conduct.
SAI Global Assurance and Remote Auditing
It remains unknown when auditors will be able to resume site visits and physical inspections. ‘Unknowns’ are regularly emerging as remote audits continue, and we have already seen that technology’s role is critical. Similarly, all parties require a clear understanding of the remote process and scope and how to ensure a robust audit with reliable results.
Positive responses to SAI Global Assurance conducting remote audits have been encouraging. As a valued partner to our clients’ audit programmes, the potential benefits, both to address challenges presented by the current crisis, and significant potential for future use, are evident.
Remote Auditing: Quick Fix or New Normal?
The longer-term question as countries emerge from the crisis will be to identify the right balance between physical and remote audits.
Remote audits have several significant benefits. They eliminate the costs of physically sending auditors to a site – and as technology develops, they can deliver increasingly accurate reflections of the audit site’s condition.
They are also highly flexible. Especially in the client-specified (i.e. second-party) space, remote audits can be scheduled quickly in response to problems or to assess a supplier for initial listing before incurring the expense of a physical audit in remote locations.
Adopting remote auditing as a regular part of the supply chain management process also allows programmes to continue despite barriers such as travel restrictions and social distancing. If the global ‘new normal’ retains such restrictions, then remote auditing has the potential to become an essential longer-term option.
Yet one thing is sure: a remote audit cannot fully replicate a physical audit’s face-to-face interaction and information-gathering. As businesses emerge from their various lockdown regimes, this value must be weighed against remote audits’ flexibility.
Remote auditing can provide an alternative to physical audits and help the industry through the COVID-19 pandemic. Its full measure of success will be the extent of its permanent introduction into supply chain management as a regular complement to physical audit. It’s likely by then to have earned its place as a regular part of the auditor’s toolkit.