Conducting factory audits for continuous improvement

a very standard service offered by all third-party quality control agencies. They are typically used by buyers who want an evaluation of a manufacturer, before they start a business relationship.

Different aspects of a manufacturer’s operations can be evaluated. Here are the most common:

• Reliability (is there a good quality management system?)
• Processes (how well do they perform certain key processes?)
• Capacity (how many pieces can they produce in a day?)
• Workplace conditions (do they respect the local law and some international standards?)

How often to audit a factory?

Large retailers usually conduct a first audit before placing the first order with a new supplier, and they re-audit the same facility at a certain interval.

For example, if several serious issues were raised, the interval may be 6 months. If the result was very positive, there may be no re-audit at all.

But some importers are more hands-on. They want to push their manufacturers to improve constantly. They audit and re-audit the processes and the quality system. It is a loop:

• After the first audit, a few high-priority issues are noticed, and the factory signs on mutually-agreed corrective actions;
• The factory is expected to implement corresponding corrective actions and, if possible, to send regular status updates about this implementation;
• During the following audit, the above-mentioned corrective actions are evaluated;
• The auditor also keeps looking for opportunities for improvement (holes in the quality system, poor process setup…), and discusses new recommendations;
• And so on.

It forms the basis for a good supplier development program. Brad Pritts, an experienced quality auditor, is the one who opened my eyes on the effectiveness of such programs. He often comes to China and runs such programs with his company’s suppliers.

Is it really useful to audit the same factory every month?

If you get really serious about continuous improvement, you can send an auditor back once a month. Naturally, your supplier will accept this more easily if you buy 40% of his capacity than if you buy 1% of his output…

Every time, the auditor will focus only on one thing:

• Month 1: the instruments (are they correctly calibrated, correctly used…?)
• Month 2: the quality control records (are they correctly filled out and archived?)
• Month 3: maintenance of production equipment
• Month 4: standard work instructions for operators
• Month 5: staff training
• Month 6: mistake proofing
• Month 7: labeling and identification
• Month 8: general housekeeping, cleanliness, storage
• Month 9: machine setup
• And so on…

Checking just one thing, in great depth and throughout the factory, is a great way of catching problems and inconsistencies. It also puts the factory in a “system” kind of thinking mode, and that is already a victory in China.

For the auditor, one day of work could be divided as follows: 30-90 min of follow-up of corrective actions, 60-90 min of randomized audit of the quality system (not focused on one area), and the whole afternoon focused on one area.

And the basis for every one of these audits should be a well-documented control plan.

What do you think?