Why it’s so important to do Factory Audits ?
Congratulation to you ! Finally you found a good supplier to start your business after months 'hard work .
It looks like it’s time to place order and everything looks so perfect ,perfect in communication ,product capacity ,after-sales service and quality is perfect too …
And it seems like this might just be a match made in heaven.
Don’t be so fast ,wait here and we will tell you why .
Don’t miss the key point parts before you place your order .it’s the right time for you to do factory audit .we will share detailed info for factory audits to you and this can help you know more about it .I am sure it will do great help for you and your business .
In this article, you will learn the following:
- What’s factory audit ?
- When it’s best time to do factory audit ?
- Why you need to do factory audit ?
- Social responsibility and security
- Common Social Compliance Audit Standards
- Third Party V Sourcing agent for audit
WHAT'S A FACTORY AUDIT ?
Factory audit (FA) refers to an onsite factory inspection that is carried out on behalf of an importer at the premises of the manufacturer before placing an order to a new manufacturer. The objective of a Factory Audit is to ensure that the factory you choose is capable of producing your goods to your required specifications and within your given timeframe.
When you contact with the suppliers and feel they good ,pick up samples ,test quality …and all is good ,but you can’t make sure all they said it is 100% true .so a factory audit can help you to tell this .when you or your agent /third party come to visit the factory to do audit ,you should focus on below points but not limited to those we talked anyway you need pay high attention to this .
• Is your supplier 'ISO 9001 certified' by a reputable certification body?
• Has the supplier implemented Quality Management System (QMS) standards to manage its key business processes? A QMS can help the supplier achieve greater consistency in the production process.
•The existence and reliability of the factory (monthly production capabilities, the type of machinery used, the main products produced, and in-house/outsourced operations)
• Whether the premises and factory capacities correlate with your order (assessing production facilities, the quality control system for incoming goods inspection, in-process controls and final online inspections); how is packaging material handled; how is non-conforming material handled; how are communication, document control & workflow; and complaints management managed?
• The training and experience of the workforce as well as the working conditions
You will know about 80% of them .Honest speaking ,as a sourcing agent ,we have worked together with hundreds of factories but some of their words or certification they offered is not 100% genius .such as IS099001 or related ,they can pay money to the certification company to get it .so for this ,you need be more carefully .avoid of those problem ,you need to have the capacity to tell how the factory it’s or work together with a sourcing agent due to they are Chinse ,it will be more easy for them .
When it’s best time to do factory audit ?
It’s very important to do factory audit ,so when it’s best time to do it as I have spent long time to find a supplier that I feel good .Based on our experience ,we suggest you can do factory audit based on different case .
A. Do factory audit before buy samples from them
You need to visit them if you want import from China and do long term business .but that’s crazy it takes time and money to fly to China to meet them .
Yes,I can understand that feeling .in this case ,you can work together with a sourcing agent like us to help you do factory audit .at the same time ,we will offer a fully report on this product for you .
You need request your agent to do factory audit before you buy samples from them .honest speaking ,it is not a small amount of money for you buy samples .then why not visit them to check if they really have the capacity to manufacture the items you want ? you can be reliable to buy and test samples once audit is good ,then move step by step .we suggest you need find at least 3-5 factory to check before you buy samples .
B .Do factory audit before you place order
Right ,it’s the right time and necessary for you to do audit before you place order .if you have been in international business for many years ,you can feel how good they are when contact sales or review their product and website ,so you only need do audit before you place order .
Factory audit will help to improve the quality of your supplier chain and also reduce risk of your sourcing process from China.
WHY DO YOU NEED TO DO A FACTORY AUDIT ?
Let’s be real here for a minute… You can’t always trust everything your factory says.
First of all, they could be exaggerating to win your business. Don’t discount the possibility that they might be willing to lie to make a quick buck.
But, even when the people in your factory have good intentions, they will sometimes answer “yes” to your questions when the answer should be “no.” This is common in China and other Asian countries as a way to save face when they don’t know the actual answer or don’t want to disappoint.
Also…Remember that you’re dealing with people who speak English as a second language. So, they may be misunderstanding things and not be digging deeply enough to even realize it.
That’s why you need to be sure you’re on the same page when it comes to standards and definitions.
Conducting an audit removes the likelihood of disappointment over unmet expectations. It makes things crystal clear for everyone.
Should You Just do One Initial Audit or do You Need More?
It’s essential that you perform a factory audit before working with the factory. Once your relationship begins, you should also do occasional follow-up audits to ensure compliance and track improvements.
Regular audits will help you improve efficiency and productivity with your supplier. And they’ll help you minimize risk in your supply chain.
You can also be sure that you’re in compliance with laws and regulations. And you can be more confident in your ability to guarantee quality.
• Social compliance audits and security
There are some important audit you can’t ignore ,we will make a list for you .
- Quality Audits
Do you want your product compliance with international quality standard ?so quality audit is a necessary part.
They’ll evaluate them based on the ISO 9001 standard. And you’ll come out with a much clearer picture of whether or not there are any quality risks to your supply chain.
2.Social Compliance Audits
Is it the factory 100% follow local labor law ? did they pay workers over-work salary based on law ? no kids below 16 years old here ? … this is the basic request for social compliance audits .
Performing a social compliance audit based on the SA 8000 system/BSCI /ICS and others famous audit standard will provide evidence that the factory is not in violation of local labor laws.
3 Security Audits
This form of audit is a voluntary government-business initiative that is aimed at building cooperative relationships that improve the security of the international supply chain as well as U.S. border.
Businesses must ensure the integrity of their security practices. They must also communicate and verify the security guidelines of their partners within the supply chain. Highlighted below are the benefits of C-TPAT audit:
• It ensures the security of the supply chain
• It verifies the manufacturer’s compliance
• It also improves the security of the U.S. border.
The following conditions must be audited during C-TPAT audit:
• Vital Items
• Conveyance Security
• Container Security
• Physical Access Controls
• Personnel Security
• Procedural Security
• Physical Security
• Security Training and Threat Awareness
• Information Technology
Companies with C-TPAT certification must ensure that they have a documented process that will help them in determining and reducing risk in their international supply chain. This enables factories to have low risk, thereby leading to expedited processing of their cargo and Customs examinations.
Common Social Compliance Audit Standards
Big brands like Walmart, Disney, Macy’s, Target, Costco and Sears are known for the highest standard of the supply chain management in the world .you need to know the common audit standards in market ,this will help you to improve your supply chain quality and brand value and better to work together with those brands .As an international sales ,you need to know something about this .
BSCI refers to a comprehensive, European platform for companies that is linked to the BSCI code of conduct. It helps to monitor and enhance the global standards in supplier countries.
The provisions for this platform are based on the standards of the International Labor Organization (ILO), the UN Charter on Human Rights and national laws and regulations.
This is a worldwide platform that caters for the exchange of information on ethically sustainable production in the supply chain. It enables members to effectively manage their suppliers and mitigate risks through the exchange of information on ethical performance.
Tis helps to make improvements that have to do with ethically sustainable business practices throughout the chain of production.
ICTI (International Council of Toy Industries) is committed to the promotion of toy safety standards, reduction of hindrances to trade as well as advancement of social responsibility in the toy industry.
It helps to address environmental concerns, lawful employment practices and safety at the workplace.
Developed in 1997 by Social Accountability International, SA8000 refers to an auditable certification standard that helps organizations to develop, maintain and apply socially acceptable practices in the workplace.
It helps to create a common language and standard for gauging social compliance.
EICC was founded in 2004 by a group of leading electronics companies. It is a nonprofit group of electronics, retail, auto and toy companies that are focused on supporting the rights and welfare of workers (around the globe) that are affected by the electronics supply chain.
EICC members are accountable to a common Code of Conduct and they use different EICC training and assessment tools to support improvement in the social, environmental and ethical responsibility of their chains of supply.
WRAP (Worldwide Responsible Accredited Production) refers to an independent, objective, non-profit group of global social compliance experts that help to promote safe, lawful, humane and ethical manufacturing practices around the globe.
From below chart ,you will easy know this 6 common social audit standard
Third Party V Sourcing agent for audit
You can benefit lots from factory audit ,here we conclusive the main advantage for your reference :
• Review your potential and existing suppliers business and production processes.
• Encourage your supplier to improve their services
• Choose a supplier that is right for your order
All all know that but some of my business partners told me that they don’t have enough time to do come to China or do it by yourself ,now you can find a third party or sourcing agent to help you do it .
Actually speaking ,you can do audit by yourself .You can check everything by yourself but don’t 100% trust your suppliers when they answer “Yes “or “No”.they may tell you they have strong R$D capacity with own designers and engineers but check it by yourself to meet their engineers and designers ,you will find their maybe only 1-2 guys in the office or may no one … don’t doubt this ,I have experienced and this is some factory did .
So now the issue is coming ,your agent or third party will help you avoid this .
Your reliable sourcing agent will be your eyes and hands in China ,we can work together with you as your team to offer product sourcing /factory audit /quality check and shipment .
A sourcing agent will offer you fully service and they know your demands quite well .you can ask them to do factory audit and report to you .this is one of the best way .but honest speaking ,they may not as professional as third party .
There are some famous third party to offer factory audit in market ,the most famous one is SGS /TUV/BV .we have to admit that they are very professional in different area and with good reputation in market .but you can’t guarantee that they don’t take money under the table .
I have worked with one famous brand and they requested factory audit by Third party to do factory audit .it is common things in market that your factory can easily pass the audit if you are generous enough to offer they red pouch in some ways What’s more ,it’s too hard for the third party to know clear for your request .so if you are work together with brand who request audit like BSCI /sedex and other standard ,you must ask third party to do audit .they are trustable .but if you just do your own brand or some kind ,ask your sourcing agent or go by yourself .this is the best choice for you .
If you want to ensure that you’re choosing the right factory, do an audit. It will give you a valuable snapshot to help you know what’s really going on there.
You’ll know whether the factory has the capability to make your product and the capacity to make it on time. And if you choose to work with them, you’ll have a way to encourage improvements over time.
You can ensure the quality, social compliance and the security of your supply chain. And you can put yourself in a position to be successful with your product.
What are you waiting for?
It’s time to move things forward and schedule your audit! Insight Quality is fully equipped to perform all of the audits mentioned in this article. If you’re interested in an having an audit for your business let’s talk.
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