Practical check: Audits in the supply chain

Management Summary

Those who do not assess their partners outsource third-party risks—straight onto their own balance sheet. The way forward is not a monster project but a well-designed staged model for audits: start small, deepen based on risk, translate results into KPIs, and consistently follow up. The goal is not paperwork but impact: verified controls, clarified contact paths, tested emergency routes. Anything else is self-reassurance.

Why many supply chain assessments fail

• Questionnaires without evidence: nice answers, zero proof.
• Uniform audit depth: the cloud provider is treated like the regional maintenance service—nonsense.
• No escalation logic: findings stall, deadlines have no teeth.
• Zero link to operational supply-chain security: no logging path, no 24/7 contacts, no drill experience.
  In short: formalities instead of due diligence. That does not ensure results.

The staged model: Three audit depths, clear triggers

Stage 1 – Desk Review (all partners)
Lightweight audits with evidence: policy excerpts, certificates, process proof, named 24/7 contacts. Triggers: new supplier, annual refresh, contract changes.

Stage 2 – Remote Audit (high-risk services)
Screen sharing/interviews, system spot checks, proof of controls (e.g., MFA screens, log exports). Triggers: internet exposure, access to sensitive data, incident history.

Stage 3 – Onsite/Targeted Test (critical paths)
Substantive on-site reviews or targeted technical tests (e.g., auth flows, restore drills). Triggers: core process relevance, admin access, linkage to your emergency operations.

Mandatory content per stage (concise but sufficient)

Stage 1 – Must-haves

• Company data, responsible persons, 24/7 contact route (emergency).
• Minimum controls: phishing-resistant MFA for admins, patch SLOs, backup concept, roles/permissions.
• Compliance evidence (if available) + validity.
• Incident reporting path: timelines, format, contacts.
• Logging path: what is logged, how long, how it is shared?

Stage 2 – Must-haves

• Live proof: MFA on critical access, session hardening, offboarding process.
• Vulnerability management: cycles, SLO compliance, sample tickets.
• Backup/restore: latest logs, integrity proof.
• Change/deployment path: four-eyes principle, approval trails.
• Drill evidence: customer emergency contacts involved? Yes/No + date.

Stage 3 – Must-haves

• Targeted tests: auth chain, rate limits, emergency login, out-of-band communication.
• Restore drill under time pressure, documented times.
• Supplier subcontractors (N-tier): who accesses what and where? Evidence.

KPIs that matter (and enforce steering)

• Coverage rate of assessed partners (Stage 1/2/3) by risk class.
• SLO fulfillment for findings: % closed on time, average closure time.
• Drill rate: share of critical partners with a passed 24/7 contact and restore drill ≤ X months.
• Incident reporting time: time from first indicator to partner notification.
• Escalation hit rate: how often defined escalation levels are used (proof of real governance).

Without quarterly reviews and hard escalation, KPIs are decoration.

90-day plan for effective supply chain audits

Day 0–15 – Inventory & risk classes

• Complete partner list with data access, exposure, admin rights.
• Risk classes (low/medium/high/critical) based on your business processes.
• Stage mapping: who falls into Stage 1/2/3—with justification.

Day 16–45 – Templates & evidence

• Three lean questionnaires (S1/S2/S3) with mandatory evidence, no free-text novels.
• Define standard evidence (screens, ticket IDs, logs, drill records).
• Contractual anchors: evidence and drill obligations, reporting deadlines, due diligence rights.

Day 46–75 – Execution & escalation

• Stage-1 rollout to 100% of active partners.
• Stage-2 for all “high”: schedule remote sessions, verify evidence.
• Sharp escalation logic: deadline → reminder → management ping → temporary access restriction.

Day 76–90 – Drills & embedding

• Stage-3 for “critical”: one restore drill + emergency contact test under load.
• KPI review vs. baseline, adjust measures, roadmap for next quarter.
• Feed lessons learned back into templates (remove/tighten questions).

Governance that works—without overhead

• One audit owner, one system: all evidence in one ticket/GRC backlog, prioritized by business impact.
• “No evidence, no pass”: every answer needs proof—otherwise open.
• N-tier visibility: critical subcontractors must be in your view, or the supply chain stays blind.
• Test the emergency path: once per year together—not just in a PDF.

Conclusion: impact over paperwork

Lean, risk-based audits are not an end in themselves. They force partners to show controls—and you to enforce consequences. Those who approach supply-chain security this way reduce real attack surface, improve response times, and make third-party risks measurable. In short: fewer promises, more proof. Anything else is expensive cosmetics.