Second-Party Audit vs. Third-Party Audit

Before we can even think about how second-party audits can support your food supplier approval program, we must first understand what exactly a second-party audit is.

Second-party audits assume there’s a first-party and possibly a third-party audit. First-party audits are self-audits, which are audits and inspections you perform on your own farm and/or facility. These audits and inspections are extremely important for keeping track of your internal expectations on a more frequent basis.

Second-party audits are performed by the corporate office to check on suppliers and/or internal facilities, like corporate-owned and franchise facilities, stores, or restaurants. And third-party audits are done by a completely separate company that has no interest in the success or failure of the organization, so the third-party auditors are completely dissociated and always the most honest.

Why Are Large Companies Using Third-Party Audit Organizations?

Many large companies use third-party audit organizations to perform their own second-party audits on supply chains and corporate/franchise-owned facilities. You might ask, “Why this change from in-house corporate employees to third-party auditors?” 

Many large companies are having third-party audit organizations perform their second-party audits on suppliers and internal facilities for the following reasons:

  1. Corporate staff can facilitate and monitor instead of audit in the field
  2. They can create very specific programs based on risk
  3. It poses less risk if auditors are not in-house
  4. It’s less expensive overall to use a third-party audit organization

Let’s begin with number four because this is the point most people would think is the least obvious. How can you possibly hire a third-party auditor to monitor your internal supplier approval program for less than a full-time staff member or team? Well, most major companies hire people for high dollars and hire benefits. While third-party auditors may cost more on paper, they are much less expensive than the overall corporate package. Also, you’re paying by the service, not by the month. Say you need many audits performed in the first two weeks of every quarter — a third-party audit company can provide many highly trained auditors for just eight weeks a year, leaving the rest of the year at zero expense.
Now that you have a third-party audit organization performing your second-party audits, you can use your internal corporate team to create and monitor very specific food supplier approval programs based on very important risks. For instance, you can monitor what commodities and locations are at high risk of food safety issues, animal welfare issues, food fraud issues, and social accountability issues. Or you can monitor things like what corporate locations are at high risk because of high turnover of staff and/or management or inner-city areas that may be of higher risk of pest control issues. Outsourcing your auditing efforts can allow your internal team to focus on and manage the micro issues from the top.

Companies That Outsource Food Supplier Approval Program Auditing Efforts

We’ve seen this performed by many large companies like Mcdonald’s. They outsource all auditing for every restaurant and supplier, allowing Mcdonald’s to have state-of-the-art supplier approval programs for food safety, social accountability, and sustainability for all their suppliers and very robust quality and safety programs for all their franchisees.

Another example is Sprouts which uses third-party auditing programs to manage its branded suppliers based on risk. They have a very detailed plan and rely on third-party auditors to audit suppliers that fall outside expectations of the acceptable risk.

For more food safety resources, visit the ASI Resource Center. If you would like us to assist with creating a risk-based food supplier approval program for suppliers and corporate facilities, contact us today!

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