What is a Factory Audit?
A factory audit is a standardized process designed to assess a supplier or vendor’s adherence to the required business standards and contractual obligations. This audit is done to consistently deliver high-quality products and services to customers. Performing regular factory audits means evaluating a supplier’s Quality Management System (QMS), organization, production processes, and compliance with safety measures.
Importance
One of the primary purposes of a factory audit checklist is to ensure the consistency and quality of products. A factory audit checklist helps manufacturers keep track of quality standards and document all processes and findings by providing a systematic approach to quality control. By following the checklist, manufacturers can identify any discrepancies or inconsistencies in their production processes and take corrective actions promptly.
A factory audit checklist ensures compliance with standards set not only for products but also for work processes and other operational needs. In the process, using a checklist can help identify points for improvement, as data from it can be collated and analyzed in an organized manner.
3 Key Elements to Assess When Conducting a Factory Audit
Factory audits can be used to evaluate your existing providers as well as help you select the best supplier for your business. Here are the three key elements you should focus on when evaluating your suppliers:
Productivity
A good supplier should deliver your products on time. Evaluating the supplier’s production processes will give you confidence whether they can meet order quantities on time. Examine all workflows during production. Track how much time was spent to finish all products within a given time frame. Assess the efficiency of machines and manufacturing equipment used.
Quality Control
Measuring your supplier’s existing QMS ensures that work quality is on par with set standards. A good QMS should also have effective monitoring procedures to support continuous improvement. Learn how to conduct different forms of quality audits.
Regulatory Compliance
Business requirements and certifications often extend to your suppliers. Supplier non-compliance can put your own business and certifications at risk. There are several certifications you can check to ensure that your supplier not only strives to deliver your products efficiently but also meets regulatory standards (e.g., ISO 9001, ISO 14001).
What to Include in a Factory Audit Checklist
Although each factory has its own needs and requirements, a typical factory audit checklist will contain fields for the following:
- Supplier name
- Date the audit is conducted
- Total annual sales
- Number of employees, operators, and machines
- Quality control tasks, such as:
- Verifying if the supplier has their own quality-checking system
- Ensuring constant and effective communication with suppliers
- Reporting issues with products or suppliers
- Recording quality control results
- Cost control and visual control evaluation
- Maintenance tasks
- Production tasks and processes
- Compliance with requirements and standards
- Overall summary of findings
At the end of the factory audit checklist, it would be best to include a sign-off portion for the dedicated staff, quality control staff, factory manager, and the like to verify the audit and its findings. This also helps with the documentation process.
Here is a sample report of a factory audit checklist in use:
FAQs About Factory Audits
Factory audits are typically conducted either by an organization’s internal auditing or compliance team or by a hired third-party auditing team. The specific method used depends on the guidelines in place, the company’s existing policies, and the type of audit being performed.
Comprehensive factory audits are usually conducted at least once a year, as recommended by experts. However, the frequency of audits can vary depending on the type of business process being audited.
Factory audits can be either announced or unannounced—depending on the process being audited, the type of audit being conducted, and the business itself. Unannounced audits are often chosen when a factory has a high likelihood of non-compliance or if they are being certified for a high-risk standard, among other reasons.
