Do You Know Why Factory Audits Are Important in China?

To get any final products of good quality, it is essential to do factory auditing. Only after performing a suitable level of factory auditing with the help of a Chinese sourcing agent, it will be possible to understand what are the various strengths and weaknesses of that particular company. 

The basic objective of performing this kind of factory audit will be to ensure that the manufacturer that will be your future manufacturing partner will follow the proper procedure or the necessary standards that are needed for producing any kind of product. 

As an example, let’s say that a certain factory is capable of producing both electronic computers and also other electronic instruments for their customers. Now you have decided to produce your electronic sub-assemblies, as the company appears to be capable of producing that.

However, you need to evaluate whether the manufacturing facility has got the entire necessary infrastructure available to accommodate your electronic subassembly and follow all the procedures needed to ensure the quality that you are expecting.      

Now suppose you have tied up with any Chinese company to produce your product as you have evaluated the company who has got the necessary expertise to produce your product. Then you will prefer to have a Chinese sourcing agent who should be able to do a factory audit before you consider the company as your production partner. 

Let’s first try to know what exactly will happen when the factory audit will be done.

1. Initial factory evaluation 

As far as the initial factory evaluation is concerned, it is one of the simplest of all other factory audits. It will concentrate on the general yet crucial characteristics of your prospective manufacturing partner for the process of supplier selection. 

The audit report usually includes, but will not be limited to, the following items:

  • Factory profile that will include address, main products, and main export countries of the world.
  • Staff count that will include the production line worker numbers, engineers, and QC staff.
  • The production process will include a description of the various production steps needed.
  • Equipment and machinery will include the type, number, and conditions of different production machines.
  • Quality management will mention procedures and SOPs.
  • Official documents will include a business license, export license, and other required certificates
  • The facility will include pictures of the workshop, warehouse, and QC room.

2. Manufacturing audit

A manufacturing factory audit determines whether your prospective supplier is really capable of creating a product that matches your company’s criteria, correcting costly interruptions, and preventing any costly disruptions in the future once your production begins.

The following are the benefits of doing a manufacturing audit:

  • Will verify the manufacturing facilities of your supplier whether they are capable to produce the product that you intend to produce through them. 
  • Will ensure a proper alignment with the sourcing policies of your company and also the policies of your suppliers
  • Will identify and mitigate potential operational, quality, and also any other ethical risks
  • Will evaluate the competence of the management of the factory.

3. Ethical audit

By performing ethical audits, it will help to ensure that social accountability is examined. With rising demand on all businesses to be also socially responsible – for providing healthy, safe, and ethical workplaces, as well as sound labour policies and remuneration.

By doing this audit will guarantee that the proper working conditions are followed. Ethical factory audit criteria are both client-specific and also based on a variety of international standards.

The following are the benefits:

  • Will ensure that your supply chain maintains decent working conditions and also does not violate any human rights.
  • This will help you to  maintain compliance with various statutory requirements
  • You can prevent any unauthorized subcontracting
  • You will understand ethical compliance accurately
  • Can build cooperative relations with your suppliers
  • Helps to improve the brand image of your company and also consumer loyalty

4. Structural audit

When the talk is about structural audits then it will be necessary to assess the structural integrity as well as the safety of the buildings of your supplier and other facilities. The Chinese sourcing agent will Audit the fire safety measures, structural integrity, as well as applicable codes and conditions.

The following are the benefits of structural audits

  • This will ensure safe working conditions so that it can prevent any minor and also catastrophic injury
  • This will make sure that the health of employees working will not be in danger
  • It will also protect the image of your brand and reputation
  • You will meet the reviews compliance to follow all necessary statutory requirements
  • Helps to gain a precise understanding of the safety norms followed in the supply chain of your product
  • Prevents any supply chain interruptions in the future.

5. Environmental audit

Environmental factory audits will help evaluate the necessary compliance with local environmental laws and regulations by monitoring and also improving the environmental effect of your supply chain.

The following are a few benefits of performing environmental audits

  • This will ensure that your collaborator in China is following the international principles and also you can meet your company’s compliance requirements.
  • Allows you to integrate audit data with laboratory tests to get a complete picture of the environmental performance of your supplier. 
  • Also, it will verify the compliances with any local and international regulations required for environmental protection.

6. Social compliance audit

Audits of social and ethical behaviour are also known as social and ethical audits. By doing this form of factory audit you can monitor the retailer’s supply chain to ensure that the criteria for various working conditions are met.

7. Quality system audit

This is the most common type of auditing of the factory. By performing this type of factory, you can determine whether or not the supplier will be producing products that will ensure quality and also on-time delivery.

8. Security audit

These are the least prevalent among the different types of audits, and they are performed by merchants and brands to stay in compliance with the Customs-Trade Partnership.

Performing an initial factory auditing will be the best option for comparing many Chinese suppliers that are on your shortlist as a pre-audit, particularly if you are planning to work with any very small factory as your manufacturing partner. 

However, if your order is going to be large, then it will be preferable to go for a much more in-depth factory review conducted by an expert Chinese sourcing agent.

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