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Second Party Audits – What You Need to Know

Part 3 of a 5-part series:

A Second Party Audit can also be called a customer audit or proprietary audit, but at the end of the day, no matter what you call it, you know it will come. Your distribution center, warehouse, manufacturer, or transportation company’s customers are the most important thing to your business. Without them, you don’t have a business. So, passing the audits they will inevitably impose upon you is paramount. We asked Hope Bowman, our Board Certified Entomologist, what you need to know to best survive a customer audit.

Q: Hope, thank you again for sitting down with us about this. Question number one – can you explain what a Second Party Audit actually is?

A: A Second Party Audit is a customer audit that is performed by the client who purchases products or stores their goods in a warehouse to assure that the location meets the customer’s strict guidelines. For example, if a pasta company uses a warehouse they do not own to store the pasta before shipment, the company will want to know that the warehouse is pest-free, has acceptable sanitation and handling measures in place, and is secure. The customer has a vested interested in the warehouse being as secure, clean, and maintained as if it was their own.

Q: Thank you for explaining that. Question number two – is there any way for a business to be “Second Party Audit ready?”

A: Definitely! The first step is to find out from the customer what they will be using as the criteria. For example, if a production area is required to be sanitized every day by the customer, then that procedure will need to be established and followed for each production area. Documentation of establishment of procedures, following of procedures, and floor-level inspections to determine if the procedures are adequate will all be part of the audit. If a warehouse, distribution center, manufacturer, or transportation company has many different customers, it’s prudent to follow the criteria that is from the strictest customer. Performing Internal Audits can help a facility be ready, too.

Q: Excellent information! Question number three (and last one!) – if a company fails a Second Party Audit, what should they do?

A: The worst-case scenario after failing a customer audit is that the customer will discontinue the business relationship. In most cases, however, that is not the case and the customer will work with the provider to meet their expectations. After failing an audit, the most important thing is to look forward to improvements. What are the corrective actions that need to be made and how quickly can they be addressed? After an audit failure, the plan with the corrective actions will be submitted and a follow-up audit will be scheduled to assure that the deviations were, in fact, corrected.

Thanks so much to Hope for all this information. Quality Managers and Sanitarians know that audits are something to be expected, so you may as well be ready for one to come. We hope the information that Hope shared with us today will help you be ready to pass the customer audit you know will eventually come.

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