ISO Standards have been compiled to help organizations efficiently and securely manage various aspects of their business, from quality management (ISO9001) to information security (ISO 27001), and many more. They prove an organization’s credentials to vendors who are looking for organizations to trade with and are therefore beneficial to have. Many vendors will evaluate a potential supplier’s ISO Standards before doing business with them and may continue to evaluate throughout their trade agreement.
Why do Vendors Evaluate an Organization’s ISO Standards?
ISO Standard 9001 requires an evaluation of suppliers, and vendors will have several reasons in which to do so. When looking for a supplier, vendors will want to assure that they abide by basic financial checks as well as resource capability and suitability checks. The basic levels would depend on the vendor, and type of product or service they require. Each vendor will have their own ‘scorecard’ that suppliers will be marked against. Having an ISO accreditation assures that an organization has a greater opportunity to gain the new business.
A vendor’s evaluation of its supply chain will be to ascertain the following:
- Costs and Financial Stability – A primary driver for any organization is that their costs are manageable. A vendor will evaluate its supply chain to determine if there is a way of improving their cost management. A vendor will also want to know that a supplier is not under risk of hitting financial difficulties, due to its management practices, as they will have an impact on their ability to fulfill seller commitments.
- Compliance – If a vendor adheres to the processes set out in their accredited ISO Standard, they will want to ascertain that their supply chain does as well. Therefore, an evaluation of their compliance with ISO Standards will continue to assure a better service for their organization.
- Lead time and Quality Checks – Vendors are constantly on the look-out for the highest quality product, which can be provided in particular lead time. Evaluating the lead times of a supplier assures a vendor that they will continue to receive their product, or service, efficiently. The quality checks also assure vendors that the product or service provided is at a constant sufficient level, something ISO 9001 accredited suppliers will be proficient at.
- Information Security – for those vendors that require the exchange of vital, secure data they will want to assure that their suppliers handle the data in the same way as themselves. Suppliers risk losing business if they cannot guarantee compliance with the associated ISO Standards.
- Environmental and Eco-Friendly Compliance – eco-friendly practices are becoming more popular with the general population. Therefore, vendors are working harder to match the requirements set out by their buyers. Each step of their product’s journey will be scrutinized and so a vendor must confirm that each step along the supply chain complies with the same ISO Standards, allowing them to advertise the eco-friendliness of the product. These vendors will be looking for the suppliers who follow standards such as ISO 14001 and ISO 18601.
Vendors want decreased costs, consistent standard compliance, better quality and lead times, as well as a supplier they can trust and create a long-lasting relationship fulfill. They will evaluate and monitor their supply chain to abide by the risk-based thinking of ISO standards, to mitigate risks of non-conformance within their chain.
As a supplier, it is not only beneficial for current trade agreements to meet the ISO standards but can open new stronger markets to trade with. To assure your organization is abiding by the standards it is necessary to undertake audits itself, providing self-confidence and reducing your own risks of losing a trade agreement with a vendor.
Hire a specialist to handle the audit, one who understands ISO Standards expertly and can also offer suggestions to improve your current practices.