Why factory audit is so import for business Check up and products processing?

Factory audit is a procedure of quality inspection services, and include: Manufacturer's identification & background, Manpower, Production capability, Machinery, facilities & equipment, Manufacturing process & product lines, In-house quality control system such as testing & inspection, Management system & capability

Looking for a new factory to work with in China can be daunting. With pressures from poor rice production on the rise and labor throughout China unstable, more China-based manufacturers are closing shop every day. For these reasons I think it’s an opportune time to review the key aspects and goals of performing a factory audit in China, either in regard to current suppliers that are underperforming, or as you are identifying new potential suppliers.

The pre-audit 

Prior to a factory audit you will most likely be going through the process of supplier identification. This can include several aspects, such as contacting with factories by phone or e-mail, having factories complete questionnaires, and reviewing samples that have been manufactured by a factory and sent to you. It is a good idea to have any data you have collected during this pre-audit process organized and available during the audit.

Audit objectives

Make sure you know exactly what your objectives are before starting the audit. In general, the objective of any supplier-identification process (which often includes factory audit) is to identify a suitable manufacturing partner in China. If there are additional objectives based on your particular action plan, ensure they are documented and well understood by your team or third-party auditors.

What is a “suitable manufacturing partner?”There are a lot of mega-size and relatively professional factories in China. Keep in mind, however, that just because a factory has the most modern facilities and a staff that speaks English doesn’t mean it is the right fit for your company. The key to finding a suitable manufacturing partner is identifying people whom you feel comfortable with, and whose facility is a good fit for your needs.

Any factory audit in China should also include a chance for you or your company’s representatives to sit down face to face with the factory management. Not only will this allow you to collect data in regard to the more technical requirements of the audit, but it will also allow you and the factory personnel to introduce each other’s businesses at the highest level.

The technical review

This is the core of the audit, where most of the factory data are collected. It’s important to have a well-organized reporting format so that the data you get stay organized and are presentable within your organization.  Following are a few of the key areas of the technical review:

Business registration, ownership, and organizational structure. In this section you should identify the ownership breakdown of the organization, ensure business and manufacturing licenses held are current and appropriate, and identify current and previous customers and countries of export. It’s also beneficial to note the factory’s approximate sales volumes for the past and current year (both domestic and export sales). You may also want to review and photocopy the factory’s organizational chart.

Office departments and administration. Take note of the office staff present at the factory. Determine if the location you are visiting is simply a manufacturing location, or also includes some administrative and management functions. Review the logistical capabilities with factory management and review the appropriate paperwork.

Infrastructure, facilities, cleanliness, and security. Inquire about power outages at the facility and check for documentation. Check to see if the factory has its own power-generation capabilities, and if so, at what level. Note the general infrastructure of the buildings and equipment, and also the surrounding infrastructure such as roads, ports, and the local community. In regard to security, check the security guard areas and records. If required, check for other security measures such as video and automatic alarm systems.

Production, equipment, and capacity. This section can be completed in detail (e.g., measuring the output and capacity of each manufacturing step), as a general overview, or anywhere in between. The level of detail gathered should be sufficient for you to make future decisions about working with this factory. It’s important that when you’re evaluating capacity, you are doing it in regard to the item that you are expecting to produce. In this section, you should also take note of the factory’s production record keeping and organization.

Quality control, testing, and product standards awareness. Check for clear separation between quality control (QC) and production departments, and documentation to support it. Check records and documentation in regard to internal QC, in-process QC, and final QC. Evaluate the factory’s own testing facilities with regard to your product category. Determine if the factory is knowledgeable and confident in regard to the product and safety standards of your country.

Environmental controls and impact. This is another section that can either be completed as a basic overview or with detailed gathering and analysis of data. There are various third-party agencies that specialize in such audits. Points to note include equipment energy efficiency, building energy efficiency, disposal of waste and waste water, air pollution, and knowledge of local environmental standards and adherence to them.

Material supply chain. Take note of the main material suppliers for this factory. Evaluate the factory’s ability to deal with change in its supply chain. Check for documented systems for evaluating suppliers on a regular basis.