In the competitive world of the modern manufacturing industry, the supplier selection process is more crucial than ever before. Whether you are sourcing abroad or closer to home, product quality, shipment and customs delays, and regulatory and safety concerns are primary consideration factors in your selection process.
Quality auditing assists to identify the best suppliers and assure better quality. This guide demonstrates its benefits to you in detail.
A quality audit is able to identify potential risks there may be in working with a particular supplier. These audits are also able to help you manage this risk through the thorough assessment procedure and improvement strategies that are offered as a part of this process.
A quality audit is crucial in evaluating a suppliers capability and performance as well as in protecting your brand’s image as you don’t want to be aligning yourself with a supplier who is noncompliant or unable to meet your production requirements.
Let’s put this into perspective.
In 2015, product returns accounted for an estimated 4.4% of $14.5 trillion in global retail sales. Electronics, books and other hard-goods retailers see an average of 8.8% returns.
The largest reason for returns? Defective or poor-quality products.
This can be prevented and managed.
Learn how to successfully navigate your next quality audit, protect your brand's image and consistently produce high quality products in the following section.
A quality audit is a program designed to assess the existing quality systems of your factory and supplier/s. An audit of your supplier and their facility will determine whether or not they can produce your products according to certain directives and requirements.
As auditing is one of the key steps in the sourcing process, it will be important to ensure that new or existing manufacturers/suppliers can deliver quality products, undertake continuous improvements and operate efficiently in compliance with social and environmental standards.
By providing a means to examine a factory’s structure, organisation, quality process and experience, the audit enables you to compare potential suppliers and select the best possible one for your production needs.
Household goods brands should understand that you get three main quality audits that are used to assess your supplier’s factory and existing quality systems.
That being said, your supplier may not need all three audits done to produce high-quality products and meet the levels of regulation and conformance that your brand requires.
So let’s explore what the quality audits are and what each offers your brand in return:
A technical quality audit assesses your supplier’s existing quality systems. A third party quality auditor will assess the following:
This auditing system is based on the following key requirements:
Making sure that your supplier is ISO 9001:2015 certified places your brand at a strategic competitive advantage.
Factory technical audits are a great at assessing your factory’s quality systems, from quality manuals, any previous certifications to its production processes and whether or not they have internal QC teams, designated storage space to the calibration of machinery and factory floor layout.
All of the above-mentioned things add to the functionality of your supplier’s factory and plays a huge role in the quality of product that they can produce for your brand.
A factory technical audit will have the following benefits for your brand:
This assesses the social systems and structures that your supplier has in place. These are normally inclusive of work hours, overtime and things like child labour. A third party quality auditor will do an assessment based on the standards as laid out by SA8000:
We have created an easy to navigate infographic to visually represent the compliance requirements of this standard:
The risk assessment of the social situation of your supplier is a key priority in the risk management toolbox, as social audits are directly linked to your brand’s immediate interests and also your bottom line.
End consumers will not be happy with a factory that exercises violence over female workers, or employs 12 year old children to polish their coffee mugs. It is your responsibility to conduct Due Diligence to ensure your factories are “clean” for your whole panel of external providers (suppliers).
If a factory is not clean of social violations it is recommended to stop to working with that supplier.
Consumers today are looking to pursue more ethical means of purchasing their favorite products, you should be leveraging this as an opportunity for growth and sustainability.
The trends in retail have shifted and indicate that consumers today are more concerned about the way in which their products are made and the conditions in which they were made, than the actual product.
In saying this, a social compliance audit will go a long way in making sure that:
This quality audit assesses your supplier's current environmental activities such as waste disposal, waste storage to air and noise pollution.
A third party quality auditor, will assess the following:
ISO14001:15 - This is the international standard for implementing an environmental management system (EMS) for your household goods brand, the key thing to note here is that it is voluntary to comply with this standard.
Your supplier may not need this standard as yet, or you may be thinking about adopting environmental practices into your manufacturing processes, but, a quality audit like this will go a long way in building out your own EMS for future certification.
Working with third-party quality auditors is the most common method of auditing your supplier.
However, there are other ways:
Read more on the In-house Vs. Third Party auditing debate.
Quality management from systems, processes to quality products is a constant struggle that household goods brand face. The state of retail has recently seen an increase in supply chain pressure from retail giants like Amazon that are increasing the pace at which supply chains need to operate.
Retailers today have begun increasingly outsourcing their quality systems to qualified third-party providers to help alleviate some of that supply chain pressure.
Many importers feel that they are capable of maintaining high levels of product quality through in-house quality teams, and while this may be true for now you need to ask whether or not you can maintain and meet the increasing demands of the consumer.
The benefits that a third-party quality provider can provide are shown below:
The qualification of your auditor is crucial to the overall audit result.
According to the Management System ISO 17021, the audit body, your thid-party provider must make sure that its auditors go through some extensive external and internal training.
The external certifications that an accredited auditor must contain are the following; ISO 9001:2015, ISO14001:2015, OHSAS18001, TS61949, SA8000:2014.
No matter the audit you require, the auditors should also hold qualifications and training in “hazardous substance management”.
Some of the soft skills training should include: 7QC, 8D, Root cause analysis, TPM, FEMA, DFMEA/PFMEA where they will also proceed to supervision on site with a duplicate audit and will be evaluated with a close follow up.
Intensive Cross Skill training follows a skill matrix where auditors are closely trained and monitored to understand a large variety of products and industries. They should be trained to diagnose risks in the factory and prevent mishaps for the importer, the customer and the end user. If products are found to be dangerous, the auditor is trained to use RAPEX (Rapid Alert System for non-food dangerous products) and then the product will be removed from the market.
The lead auditor should organize that trainees meet up to discuss different methodologies and to standardize work practices across their different service countries. This is crucial to meeting customer requirements. In these sessions, auditors are also training on their hard product skills - the handling of things like; glassware, die casting, hand tools, power tools, ceramic products, etc. This, along with peer learning will give the auditor a solid knowledge base of the skills required.
As a key step in the sourcing process, conducting a quality audit is a crucial element in understanding the risks your brand may be opening itself up to.
By analysing and assessing your quality systems, your business will be in a favourable position for growth.
Look to choose third-party quality providers that can help you create a continuous improvement culture for your brand where you can identify risk early on and avoid it!
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