Outsourcing Audit - Internal Audits and External Audits

The author of this article, Craig Thompson, holds certifications as a Certified Quality Manager (CQM), Certified Quality Engineer (CQE), and Certified Quality Auditor (CQA) and is an RAB/QSA-certified AS9100/ISO 9000 Lead Aerospace Auditor (previously AIEA). Mr. Thompson has extensive experience working in the Aerospace, Oil & Gas, Automotive, and Manufacturing Industries. Craig has also developed supplier process flow maps for OEM manufacturers of complex machines for both aerospace and automotive.

As a Director of Quality for over 20 years in manufacturing industries, I often struggled to maintain both the internal and external audit programs while staying on budget. Additional challenges were to not compromise operational flow with the personnel performing auditing activities, and lack of interdepartmental cooperation and auditing pool turnover. In the constantly evolving worlds of Supplier and Quality Management, the next step of the manufacturing environment is outsourcing those auditing activities. Though this concept is not new, it has been consistently gaining popularity, and may be applied to any industry or certification type. I have written this article to point out the significant pros and cons of outsourcing internal and external audits. However, it is important to note that should you outsource an audit, it must be done by a reputable certification body or a consulting company.

Auditing by external firms is an easier program to establish, implement and outsource versus internal auditing. This is due to the financial and personnel resources, a company must allocate to effectively manage the process. The cost of outsourcing external audits is comparable, or slightly higher, than the amount spent by keeping the activities in-house. However, the savings come from not tapping into the personnel capacity of your facility. In addition, another key benefit is the availability of a Subject Matter Expert’s (SME) flexibility in timing and travel. Utilizing an established and respected consulting firm offers the advantage of having SME staff available for any type of provider in any type of industry. Utilizing a consulting company will also ensure an independent review of a supplier’s processes and procedures to achieve your standard of excellence.

Many of the previously mentioned advantages are the same for outsourcing your internal auditing program. The biggest advantage is the independent review of your processes and overall management systems. The unbiased approach of a third party is essential in ensuring the effectiveness and efficiency is being met for all processes within the scope of your certification. A drawback to outsourcing the internal audit program is management’s willingness to accept the findings and conclusions of the auditor. In this situation, a consulting company is a better choice than a certification body, since the latter cannot perform consulting activities.

“The cost of outsourcing external audits is comparable to keeping activities in-house.”

For years as part of the executive staff, I know firsthand that the key to company’s success is development and management of both internal and external providers. I also realize that it is becoming even harder to identify high quality auditors that are willing to help strengthen a company through good audits. In the current climate, the outsourcing of auditing activities makes the most sense to stay within ever tightening budgets, less loss of manpower from their normal duties, no extra training dollars spent for auditor certification, and increased expertise for specialized processes and standards. Based on my experience, using a certification body has the potential to cause more harm than good, if they would even consider it. The advantages of outsourcing your internal or external auditing activities is a great risk management tool to ensure the management system has few to no gaps come certification time.

Craig Thompson is a PPAPandAudits.com consultant with extensive Management, Process Improvement, Lean Manufacturing & Problem-Solving experience with a very diverse list of Quality Standards and Tools. Mr. Thompson desires to be a vital contributor to a manufacturing operation in need of immediate assistance. When not working, Craig is busy writing articles for various topics in the Automotive and manufacturing industries. Craig envisions a new automotive era that’s fully emission free.