US retailers streamline C-TPAT audits of overseas factories

logo-ctpatSince its post-9/11 inception, the US Customs C-TPAT program has helped the trade — and national security — by establishing a risk-based approach towards import cargo security.  Many large US retailers are involved in the program, taking steps to ensure that their foreign suppliers pass muster.  Recently, several large retailers have voluntarily joined forces to greatly improve the auditing of their suppliers’ factories.  Their pilot program has met with great success, and they hope that other retailer join forces for a wider rollout.

According to an article in the November 2013 print edition of American Shipper, “Common security lens,” an unanticipated byproduct of the C-TPAT program has been “audit fatigue” — foreign contract manufacturers inundated with extensive audit requests from US retailers and their third-party auditors.

The result has been increased costs for suppliers to comply with these often duplicative audits, which require “managers to spend time answering questionnaires, preparing for on-site audits, accompanying audit teams during plant visits and paying for third-party auditors when retailers outsource verification.”   Moreover, since the average factory is audited multiple times by different retailers annually, there is “confusion about whose standards to follow, inefficiency… and a focus on passing the audit rather than fixing any underlying problems.”

To address these issues, about 10 top US retailers — including Target, Home Depot and Levi Strauss — partnered to standardize audits in global supply chains.  With input from US Customs and third-party auditors, they created a harmonized audit checklist that incorporates the eight major areas that CBP requires for C-TPAT certification, essentially “agreeing on minimum security requirements” while leaving the details of compliance up to each factory.

The advantages of a standard approach to security are numerous:

  • Factories benefit by:
    • having more clarity and consistency about requirements
    • undergoing fewer audits, which enables them to focus on production and security.
  • Retailers gain by:
    • lowering costs of doing business
    • focusing time and resources on corrective action, education and training
    • exchanging best practices with other retailers and brands

After a successful pilot which resulted in some tweaking to the audit checklist, the working group of retailers hopes to broaden the program to include other retailers, by creating a website and LinkedIn group, and presenting at US Customs’ next C-TPAT conference.

 

One thought on “US retailers streamline C-TPAT audits of overseas factories”

  1. Standardized audits in global chain is a good idea of reducing costs of doing business and concentrating more on expanding business in the relevant circles. Audit is an activity which helps businesses attain greater transparency, global acceptance and remove irritants which may drive away the potential clients. Standardized auditing parameters, agreed upon by the top retailers like Target, Home Depot etc in collaboration with US Customs, create an ideal situation for the companies interested in doing business in a stress free environment.

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