Factory audits are important to find a suitable manufacturing partner in China. Here is the basic guidelines for conducting a factory audit.
Choosing a new factory in China as your product supplier can be daunting. As Chinese economy is a home to hundreds of manufacturers with large number of them being substandard companies choosing a supplier is no easy job. An audit corporation that performs factory audit in China is your best bet to find potential suppliers. Here we provide you with a basic idea of what to expect from a factory audit.
The pre-audit phase
Factory and supplier audit comes second, but a professional audit corporation will conduct pre-audit for you. It contacts your prospective supplier and inquire about reviewing samples, factories, questionnaires and several other identification information in the pre-audit process is collected.
Audit objectives
The audit corporation you hire will need to know exactly what your objective is before starting the audit. Generally, every supplier-identification process is based on the objective of finding a suitable manufacturing partner in China. However, if you have any additional objectives make sure you document them and inform third-party auditors about them.
A suitable manufacturing partner is decided based on how modern a facility is or how fluent is the staff in speaking English. A right manufacturing partner for you is the one whose facility is a good fit for your needs, an auditing company will help you find people whom you feel comfortable with. Such companies talk with factory management face-to-face so that they can understand the company at the highest level.
The technical review
The is the core of a factory audit in which most of the factory data are collected. A professional audit corporation will provide you technical review in a well-organized reporting format. Key areas included in the technical review are:
Business registration, ownership and organizational structure
This section of review audits the business and manufacturing licenses, breakdown organization structure and identify current and previous customers of the factory. Also the office staff present at the factory is noted in the review followed by a review of the logistical capabilities with factory management.
Production, equipment, capacity
This section of the report tells you about the capacity of each manufacturing step. This report can be detailed or a general overview based on your requirement of how critical you are about the production infrastructure of your prospective supplier.
Environmental controls and impact
Based on your business requirement this section can be a basic overview or a detailed analysis of data. An audit corporation conducting this review needs to be aware of local environmental standards. Equipment energy efficiency, disposal of waste and waste water, building energy efficiency and air pollution control are audited in this section.
What else you should know?
Above sections of factory audit are common to all audit corporations, but there are few other factors to keep in mind.
Social compliance
You should always put emphasis on working with a socially compliant factory. Your supplier selection process should include social compliance audits and an audit corporation should conduct them outside a standard factory audit.
Factory acknowledgment of the audit
Last but not least, on completion of the audit the factory should be given the opportunity to comment on the audit findings. These comments should be included in the audit report, acknowledged by the factory representative.