Advice for Approaching Your Business’s Supply Chain Audit

Supply chain audits can pose a big challenge to small and medium sized businesses.

The more suppliers a company has in faraway places, the more complicated, time consuming and costly those audits can become. And while larger organizations often have dedicated staff and resources available to check in on suppliers and ensure their standards are being met across the supply chain, smaller companies may find themselves needing to pull staff and resources from elsewhere. 

“When you get into the mid-size and smaller companies, you do struggle with, ‘who’s available to do this?’ and ‘how much time do we have to do this?’, and that’s taking away from their other work,” explains Ken Kirk, President of Sepro Mineral Systems, a Langley, British Columbia-based mineral processing equipment and solutions provider.

That is why Kirk says smaller companies tend to only conduct supply chain audits—which go beyond the scope of their annual supplier quality checks—when necessary. For Sepro, one such occasion arose last year, when one of the industry’s largest players asked the company to conduct an audit to streamline future deals and maintain its status as a preferred vendor.

Sepro Mineral Systems is one of just a handful of companies that manufactures a key piece of mineral processing equipment for the mining industry, and one of the few that can offer custom solutions. As a result, some of the industry’s bigger players refer their clients to Sepro, but getting those referrals requires meeting the supply chain standards of the competition.

“Prospective clients have to make sure that the vendor is worthy of them purchasing the equipment, and making sure the quality level meets our standards and that they’re conducting business ethically,” says Kirk. “It’s quite a process that goes beyond the product itself, such as following human rights and ethical sourcing guidelines, financial health and whether they’re at risk of going bankrupt during a project. Even climate-related initiatives, for instance, do they support our customers objectives.?

Maintaining its place on that preferred vendor list required an extensive review of each of Sepro’s own vendors, challenging the 85-person company to find the time, resources and manpower to conduct checks on suppliers in nearly every corner for the world. 

“Our operation is in British Columbia and most of our vendors are around the world; some don’t speak the language,” he says. “Serbia is a big vendor for us…Peru, Indonesia, Thailand, Mexico…and it’s tough if you don’t have someone that speaks the language completing these types of audits in a foreign country.”

The supply chain audit began in mid-2024 and took nearly nine months, wrapping up in the first quarter of 2025.

“We made it to the preferred vendor list,” Kirk says, adding that the company that requested the audit did request more frequent check-ins with key suppliers moving forward. “They would like to see a little more activity, but that’s been difficult with such a wide variety of vendors, and only two people that can travel there to make a proper review of that operation.”

Now that the process is over, Kirk says he’s able to share some best practices he learned along the way.

1. Cover parts of your supply chain audit remotely

While certain aspects of supply chain audits need to be completed in person, some of that work can also be done remotely, which can not only save auditors time on the ground but in some cases negate the necessity of an in-person visit.

For example, Kirk says he ran all his vendors through a legal search platform to ensure none were named in any lawsuits, sanctions or other legal actions. He also requested what documentation he could gather remotely on their sustainability efforts, financials, and human rights practices.

For that which required a visual inspection, Kirk says he encouraged staff to conduct those audits using remote working tools whenever possible, rather than travelling.

“With video conferencing platforms it’s quite easy to have them walk around with a camera,” he says. “That’s something we’ve been doing on occasion if we have specific points that we want them to walk us through, and we can offer assistance if they run into issues for some smaller things, rather than making the flight down.”

2. Focus on overall impact of your supply chain audit and keep it simple

Supply chain audits often include a wide range of components, but some of the items on that lengthy checklist are worth more time and attention than others.

Rather than getting bogged down in details, Kirk says it’s important to evaluate how much resource and energy each point is really worth, and avoid being a stickler for the stuff that doesn’t really matter or does not have a material impact.

“You don’t want to get wound up in some things that are what I would call immaterial, and I know from experience that audits will often go that way,” he says. “You can get really into the weeds in any audit and spend too much time on something that doesn’t move the needle, so you really want to dial it in.”

Kirk says that audits are intended to answer a specific question, and that there are often many individual factors that are analyzed in pursuit of that bigger answer, making it easy to miss the forest through the trees.

“You have to stay focussed on the materiality, and ask yourself, is that a big deal? Is it worth our time investigating a penny in a company with millions?” he says. “Keep it simple and focus on the material items that you’re trying to audit.”

3. Plan for follow-ups in your audit process

While some parts of your supply chain may not be worth the time and effort required to conduct regular, thorough reviews certain key pieces should be given the time and attention they deserve.

The suppliers of critical components, for example, may require a closer and more frequent look under the hood.

“You can always go through an audit and pass; the question is what happens after you leave?” Kirk says. “Some routine follow-ups and spot checks throughout the year is a good way to make sure your audit is validated.”

For example, Kirk says the drum Sepro uses in its mining equipment needs to be welded to certain standards to maintain performance and reliability under the desired operating conditions.

“That drum will crack in a New York minute if it’s not welded properly, and we’ve had that experience where a couple of drums cracked because of poor welding,” he says. “One little mistake could cause a catastrophic event, which has had some significant financial consequences for us, so we treat these vendors as if they’re an extension of our factory.”

While businesses can’t audit every aspect of their suppliers’ operations, especially smaller businesses, Kirk emphasizes that some checks are worth the extra time and effort.

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