Safety reputation starts off-site: Pre-qualification company
While an organization may be operating at its safest possible standard, there remains an obligation to ensure products are produced in safe environments before it even arrives on-site.
Upholding a safe supply chain not only benefits employees on the ground floor, it’s a practice that sees improvements in the bottom line, as well.
A safe and sustainable supply chain should be a priority for companies and the means of getting there can actually be quite simple.
Screen suppliers
The first step in supply chain management is to make sure the right suppliers on hand. Using a prequalification form, or a third-party agency, you can verify the following for contractors:
• their regulatory forms
• their insurance statistics
• their contractor certification.
Review each document and check for inconsistencies among suppliers, or issues with incident ratings. This will provide the information needed to compare the data with company expectations. Those who do not meet expectations can be eliminated.
Eliminate poor performers
Poor performance puts business at risk. Eliminating suppliers that cannot meet expectations mitigates that risk and can protect against incidents.
Elimination begins by grouping together company requirements and suppliers who are not able to meet the standards set. This can be done within three steps:
• establish insurance, incident and safety requirements
• review the documentation collected on each contractor and supplier
• contractors who do not meet your minimum requirements should be eliminated.
There may be exceptions a company is willing to make in its supply chain management process. Decide ahead of time what these exceptions can be and write them down as a reference point to return to should there come a situation where you need to.
Contractors and suppliers who fall under the exception section should be marked as such. Note in their file that an exception was made, the reason for the exception and any deadline that you wish to assign to that exception.
For example, if a contractor is allowed on-site who had a higher than average incident rating and the goal is to see it decreased, establish a deadline for it to be dropped by and check back with the contractor at that time. Qualification can be conditional upon reducing that rating.
Add suppliers who have been pre-screened
Once poor performers have been eliminated, more contractors will likely need to be brought on board.
A simple way to do this is to use previously prequalified suppliers as part of your standard supply chain management process. It can be done quickly by joining a consortium, where you can select from a searchable database of contractors in a variety of industries that have already been prequalified. Or, you can seek out suppliers from other firms in your industry.
While suppliers from a consortium database may be required to fill out additional information, there are benefits of knowing that many of them already meet, or even exceed, company expectations. This speeds up the process to bringing a new supplier on-site, as much of the work to pre-screen that vendor has already been done.
Keep data current by requesting annual updates
We all know how quickly data can become out-of-date. Contractor data is no exception. To ensure that an organization has the correct information when making informed supply chain management decisions, suppliers should be asked to update their information annually.
Each year, suppliers should send an updated prequalification form with new incident ratings, safety statistics from the past year, along with any “business critical” updates on their firm. This information should be added to their file, or if a consortium is being used, it should be added to their online database so that it can be easily accessed.
Centralize data, share across departments
Contractor data is of no consequence if it cannot be shared. There are several departments that need supply chain management access: purchasing, safety, and security are just a few.
These departments should have access to the same data as everyone else in the company, so they can also make informed decisions about the company’s supply chain. By centralizing data online, issues that can come from a company-shared spreadsheet can be prevented and time will be saved from duplicating work and updating the document.
Once the data is online, a user interface can be used so departments can assign login privileges to the people required to access that information. This way data is kept safe and only shared as it is needed. If the company are part of a consortium, this is taken care of.
Look for sustainability
The sustainability of vendors should play a major role in supply chain management. Safety is an important element and will be dealt with by prequalifying contractors and performing audits on high-risk trades.
Sustainability is often overlooked. It will not matter if a safe supplier was selected if he or she is not in business one year from now. Including sustainability questions in the prequalification form will help to ensure that the following is covered:
• business continuity
• financial stability
• environmental impact.
Each of these items is paramount in determining the long-term likelihood of retaining a supplier. Remember, safe supply chain management is an investment of time. Be sure to do so with suppliers who are going to stick around.
Implement audits for contractors involved with high-risk trades
For companies who must maintain a higher standard of prequalification, audits are the right way to go. During an audit, a safety professional will confirm the contractors being reviewed for hire comply with company requirements.
This is typically done via a manual, implementation or field audit.
A manual audit is a review of the contractor’s quality or safety manual. It considers all services performed and helps the contractor to add any missing items to their manual.
An implementation audit is a review of policies and procedures set forth in the contractor’s quality or safety manual to ensure they are being implemented correctly.
A field audit is an on-site inspection to see how contractors are performing in the field.
Putting it all together
Supply chain management becomes simpler and more effective when these seven steps are followed. Over time, incident ratings will drop and the supply chain will be more sustainable as long-term relationships are developed.
Selecting safer suppliers also reduces the likelihood of an incident or litigation. Not only will there be an enhancement in safety and sustainability, but the company’s bottom line will improve as well.
Catherine Gutierre is the marketing manager at PICS Auditing in Irvine, CA. PICS is a contractor prequalification company, which evaluates contractors to promote workplace safety from the initial stages of production.
