A factory audit is a systematic evaluation of a manufacturing facility's operations, systems, and processes to ensure compliance with industry standards, laws, and customer requirements. The audit assesses the factory's ability to produce quality products, maintain a safe working environment, and adhere to social responsibility and environmental standards. The audit provides a comprehensive review of factory’s:

• Quality management system

• Social responsibility and labor practices

• Environmental management and sustainability

• Health and safety procedures

• Security measures.

What standards must factories abide by?

Quality Rules

1. ISO 9001: A global standard for making sure products are good quality.

2. ISO/TS 16949: A standard for the car industry.

3. AS9100: A standard for the aerospace industry.

Social Responsibility Rules

1. SA8000: A standard for treating workers fairly.

2. WRAP: A certification for being a responsible employer.

3. BSCI: A standard for being a responsible business.

Environmental Rules

1. ISO 14001: A standard for taking care of the environment.

2. RoHS: A rule for keeping harmful chemicals out of electronics.

3. REACH: A rule for controlling chemicals.

Health and Safety Rules

1. OSHA: Rules for keeping workers safe.

2. ISO 45001: A standard for keeping workers healthy and safe.

3. BS OHSAS 18001: A British standard for health and safety.

Security Rules

1. ISO 28000: A standard for keeping supply chains safe.

2. C-TPAT: A program for keeping supply chains secure.

3. AEO: A program for trusted businesses.

Who sets these Standards?

These standards are set by various organizations, including:

1. International Organization for Standardization (ISO): Develops and publishes international standards.

2. National and international regulatory bodies: Establish laws and regulations for specific industries or regions.

3. Industry associations and organizations: Develop standards and certifications for specific industries or sectors.

4. Non-governmental organizations (NGOs): Establish standards and certifications for social responsibility, environmental sustainability, and other areas.

What are the types of factory audit?

Based on their scope and purpose factory audits are of following types:

Internal Audits

First –party Audit:  or self-check, conducted by the factory itself to evaluate its own systems, processes, and compliance. 

Self –assessment audit: A factory’s internal evaluation of its own performance, often using a standard checklist.

External Audits

Second –party Audit: or customer audit, a customer checks the factory to make sure it is meeting their requirement.

Third-party Audit: or independent audit, an outside expert checks the factory to see if it is following rules and standards.

Certification Audit: an Auditor checks the factory to see if it qualifies for a special certification.

Government Audit: The government checks the factory to make sure it is following laws and regulations.

Other types

Planned Audit or announced Audit: The factory is informed of the audit in advance.

Surprise Audit or unannounced Audit: The factory is not informed of the audit in advance.

Follow-Up Audit: An auditor checks back to see if the factory fixed any problems found during the previous audit.

What is Internal Audit?

Internal audits are like a self-check for your company. They help you evaluate how well your quality management system, processes, and operations are working. Usually, a trained team within your company or external experts hired by your company will do the audit.

What is the purpose of internal Audit?

The Purpose of Internal Audits:

Find the Gaps: Identify areas where processes are not meeting internal standards or external regulations.

Improve Continuously: Encourage teams to spot inefficiencies and fix them before they become major issues.

Get Ready for External Audits: Prepare your organization for formal audits by resolving problems ahead of time.

What are the benefits of internal Audit?

• Save Money: Regular internal audits are cheaper than waiting for external audits to find problems.

• Manage Risks: Find potential issues and fix them before they become big problems.

• Involve Employees: Get staff involved in the audit process, so they understand and take ownership of quality goals.

What is external Audit?

External audits are independent reviews done by outside experts, like certification bodies or government agencies. They check if a company is following specific rules or standards.

What is the purpose of external Audit?

Get Certified: Make sure your company meets the requirements for certifications like ISO 9001, AS9100 or other certifications.

Show Compliance: Prove that your company follows industry or customer standards.

Build Trust: Show customers, suppliers, and stakeholders that a third-party expert has validated your processes.

What are the benefits of External Audits?

Get an Honest Opinion: Unbiased experts give you a fair and accurate review of your systems.

Boost Your Reputation: Being certified proves you are a reliable and compliant manufacturer, enhancing your industry reputation.

Open Doors to New Markets: Many industries require certifications like ISO/AS to do business with them, so being certified can help you access new markets.

What are the differences between internal and external Audit?

Internal audits help make sure your company's quality management system is strong. They help you find and fix problems, improve processes, and get ready for external audits. External audits then verify that you are doing things right and following the rules. They give you a kind of "seal of approval" that builds trust with customers and regulators, and can even open up new business opportunities. By doing both internal and external audits, you can keep improving and make sure your company stays competitive.

What is the Difference between Audit and Inspection?

Although factory audits and inspections share some similarities, they are different in their approach and scope. The following are the key differences between factory audits and inspections:

• Scope: Factory audits comprehensively evaluate a facility’s operations and policies, while inspections are limited to specific areas, products, or processes.

• Objectives:  A factory audit identifies improvement areas, ensures compliance, and maintains quality standards. In contrast, an inspection aims to detect and correct specific defects or issues.

• Approach: Independent third-party auditors typically conduct factory audits, while internal quality control teams or external inspectors usually undertake inspections.

• Frequency: Periodic factory audits ensure compliance and identify areas for improvement, while regular inspections detect and correct defects.

What Happens During a Factory Audit?

During a factory audit, experts visit the manufacturing site to observe operations. This involves several key steps:

• Facility Check: Auditors inspect the site, examining layout, equipment, and workplace conditions. They ensure machinery is well maintained, safety standards are met, and the environment is clean.

• Quality Control Review: The team assesses quality control processes, from raw materials to final product inspection. They verify adherence to industry standards and evaluate the quality management system.

• Compliance Verification: Auditors check the site's compliance with regulations, industry standards, and labor practices. This includes environmental and health and safety assessments.

• Supply Chain Assessment: The team evaluates the site's role in the supply chain, reviewing supplier performance, transparency, and risk management.

• Document Review: Auditors examine records, quality control logs, and compliance certificates to validate findings and understand management systems.

What Should You Include in Your Factory Audit Checklist?

A good factory audit checklist should cover many areas to ensure the supplier can deliver quality products. Here are the key areas to include:

• Quality Management: Check if the supplier has a strong quality management system that meets ISO 9001 standards.

• Industry Standards: Verify that the facility meets industry standards and regulations for safety, environment, and labour laws.

• Production Processes: Evaluate how well the production processes work, including machinery, production lines, and workflow.

• Working Conditions: Assess the workplace environment, focusing on safety, employee training, and overall working conditions.

• Supplier Performance: Review the supplier's record of accomplishment, including meeting deadlines, managing supply chains, and maintaining product quality.

• Environmental Compliance: Check if the facility meets environmental regulations, including waste management and sustainability initiatives.

• Security Measures: Evaluate the facility's security protocols, including physical security, data protection, and risk management.

• Continuous Improvement: Ensure the supplier regularly assesses and improves their processes, quality standards, and performance.

• Audit Team Expertise: Make sure the audit team has the necessary expertise and experience to conduct the audit effectively.

How Do Factory Audits Ensure Compliance with International Standards?

Factory audits evaluate a company's quality management system, identifying areas for improvement. By assessing processes, practices, and procedures, audits ensure products meet customer expectations and industry standards.

ISO 9001-based factory audits help organizations ensure compliance with international standards and deliver high-quality products consistently. Key principles include:

• Customer Focus: Audits assess whether suppliers prioritize customer satisfaction and implement practices aligned with this focus.

• Leadership: Auditors evaluate leadership's role in fostering a quality-driven culture and commitment to continuous improvement

• Employee Engagement: Audits assess how well organizations engage and empower employees to contribute to quality improvement initiatives.

• Process Approach: Audits evaluate whether organizations have established clear and efficient processes aligned with ISO 9001 standards.

• Continuous Improvement: Audits assess organizations' commitment to continual improvement, reviewing past performance and identifying areas for future enhancement.

• Evidence-Based Decision Making: Auditors review data collection and analysis processes to ensure decisions are made using reliable and accurate information.

• Relationship Management: Audits evaluate how well organizations manage relationships with suppliers, customers, and stakeholders to achieve mutual benefits.

By assessing these principles, factory audits ensure organizations meet international standards and deliver high-quality products.

How long does a factory audit take?

A factory audit usually lasts 1-3 days, depending on the factory's size and complexity. The time needed can vary based on:

• Number of production lines.

• What needs to be checked (scope of the audit).

• How thoroughly the audit needs to be done.

If the audit is more detailed or includes multiple types of audits, it may take longer to make sure everything is thoroughly checked.

When Can You Expect Audit Results?

Audit results are usually available within a few days to two weeks, depending on the audit's complexity. Typically:

• Preliminary findings are shared with factory management at the end of the on-site audit.

• The full report is delivered shortly after.

• This timely feedback allows you to quickly identify areas for improvement, ensuring your supply chain stays compliant and efficient.

How to Schedule a Factory Audit?

To schedule a factory audit effectively, follow these steps:

• Choose the Right Audit Type: Determine the type of audit needed, such as compliance, environmental, or capability audits, based on your business requirements.

• Select a Suitable Time: Consider the production cycles of your supplier or manufacturing facility. Balance the need for thoroughness with operational realities.

• Coordinate with the Audit Team: Brief your audit team on specific areas of focus, such as product quality, working conditions, and quality control measures.

• Notify the Supplier: Inform the supplier or manufacturing facility about the upcoming audit in advance, ensuring transparency and a collaborative relationship.

• Prepare Necessary Documentation: Gather relevant documents, including previous audit reports, production processes, and quality management system records.

• Plan for Post-Audit Actions: Review audit findings, implement necessary changes, and schedule follow-up audits if required, ensuring continuous improvement.

Key Takeaways

Types of Audits: Internal audits for self-evaluation, external audits for compliance and certification, and specialized audits like environmental or social responsibility audits.

Audit Process: Facility checks, quality control reviews, compliance verification, supply chain assessments, and document reviews.

Benefits: Improved quality, increased customer trust, compliance with regulations, and reduced risks.

Audit Results: Available within a few days to two weeks, with preliminary findings shared during the on-site audit.

Scheduling an Audit: Choose the right audit type, select a suitable time, coordinate with the audit team, notify the supplier, prepare necessary documentation, and plan for post-audit actions.