Why You Should Perform a Factory Audit Before Choosing a Supplier

Choosing the right supplier for your business is vital to success, especially when dealing with factories in China and other low-cost Asian countries. There are usually three steps to this decision process:

  • Identification.
  • Screening by questionnaire.
  • Screening by verification.

Each step is more extensive than the previous one. The first step is searching for all potential suppliers, followed by narrowing the list down to 3-5 candidates. The last step is performing background checks and in-depth audits. By the end, you should have one great supplier and a few others to keep as backup plans.

Why Do I Need A Factory Audit?

The main goal of a factory audit (also called factory inspection) is confirming the factory’s capacity to fulfill the orders according to the set timeframe. It assesses the quality control management, the machines, and whether the manufacturer is sufficiently specialized for producing the goods. More thorough audits also check security and social responsibility.

Social responsibility refers to factors such as working conditions, environmental practices, and ethical standards. Identifying potential risks in these areas helps you avoid relationships that will harm you in the long run. Without due diligence regarding business partners, companies might eventually lose credibility and trust.

What Is the Difference Between Factory Audits and Quality Inspections?

In general, quality inspections focus on the goods during production, while factory audits take a broad look at the factory itself before the buyer places any orders. Quality inspections occur at different stages of the production cycle and involve checking, measuring, and testing products’ compliance with the specifications.

How Do Factory Audits Work?

The outcome of a factory inspection is a report assessing the factory’s overall quality management, usually assigning it a score from 1 to 100. Though this is not a guarantee, suppliers with higher scores are less likely to have severe issues than those with lower scores. Audits can involve various steps and evaluations, asking questions such as:

  • Are the factory’s licenses and certifications in order?
  • Can the factory manufacture products with the required quality level?
  • What is the factory’s total capacity for orders?
  • How comprehensive and reliable is the factory’s quality system?
  • Do the written records support the factory’s claims?

Reports can also include information such as the number of customers, employees, and a machine inventory.

Common Doubts About Factory Audits

  • Should I request a factory audit before or after ordering samples?

The sampling phase is crucial to ensuring the supplier understands your requirements, so you should be prepared for frequent interactions. Therefore, buyers must know whether the supplier is a viable option before committing to this process.

  • Are factory audits expensive?

A working day’s cost is usually around $300, though comprehensive assessments can be more expensive. Most factory audits only take one day to complete, but you need to schedule different audits if you have multiple suppliers.

  • Can I audit the factory myself?

Nothing stops you from checking the factory yourself. You will likely want to do that occasionally to confirm details and negotiate prices. That said, proper audits involve expert judgment and various procedures outlined in standards and guidelines, so they are best left to a professional auditor. A trained expert will spot minute details often unnoticed by an untrained eye.

Essential Considerations for Factory Audits

As mentioned earlier, good evaluations in factory audits will not necessarily translate to quality products. The auditing process tends to favor large manufacturers. Due to their size, audits of larger manufacturers may not pay much attention to small orders.

Be careful when selecting suitable suppliers before auditing them. Moreover, carefully consider each supplier’s strengths and weaknesses after reading the audit reports. You should also supplement factory audits with quality inspections.

Assess your exact needs before hiring an inspection company since not all audits cover social and environmental responsibility or security, for example. Depending on the supplier and your business, you might want to conduct an audit focusing on production and quality management, booking specialized audits only when you feel they are necessary.

Conclusion

Building strong partnerships demands your full attention, starting from the choice of manufacturer. While not enough on their own, factory auditing services should be considered essential for importers wishing to stand on a solid foundation. Look for reliable companies that provide detailed assessments covering different aspects.

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