Third-Party Quality Audit Vs. Internal Quality Audit


Third-Party Quality Audit Vs. Internal Quality Audit

Maintaining the efficiency of your supply chain and overall product quality may be something that you can handle through an internal quality audit, but the questions are; – Are you really able to afford the time and resources that is constantly required to keep up with effectively measuring and managing your systems? – Are you able to conduct an objective analysis of the state of your systems? – How does doing this ensure your place in the market in the eyes of your customers? By understanding the pro’s and con’s of both conducting both an internal quality audit vs a third party quality audit, you will be able to ensure that not only your products pass the minimum compliance requirements, but that they are of the highest possible standard of quality, while also ensuring that you are streamlining your production operations to that of the highest quality. Sound like something your organisation can benefit from? Read on to discover the benefits of conducting a third party quality audit as opposed to using an in-house quality audit team here.

Are you up to date with all of the latest in product regulations?

The supply and demand of our current global retail landscape means that there is always a need to be up to date with the changes in product regulation.

Third party quality Audit

A third party quality provider has access to resources through associations and a network of online cloud-based systems that enable them to keep up to date with the latest in product regulations. Access to a network like this is a key part of their service offering, this is what will distinguish a good quality external service provider. Capabilities like this are able to streamline your operations which can assist you in getting your product to the market faster, allowing you to stay on top of the supply and demand pressures that are felt in the marketplace. However, when conducting a third party quality audit, you will need to ensure that the auditors you choose specialize in your specific product category, by doing this you will ensure that they are up to date with the most relevant product and regulation information. Let’s take the global fidget spinner craze; this children’s toy  hit the shelves faster than what the market could blink. Third party quality inspection services - fidget spinner It turns out that over 200 000 of these had to be recalled due to procedural non-compliance as well as the product having critical defects; meaning that this product may cause injury or harm to its end consumer. A third party quality auditor would be able to provide you with an unbiased inspection report, including the above information, thus protecting your brand from damage and product recalls that can become extremely costly.

Internal quality audit

Reliability is key. Is your internal staff able to spend the time they need ensuring that they understand all of the relevant product information that you need? While your organization may have the know-how, you likely do not have the resources or capacity to dedicate someone to ensure they are well researched into the latest regulations that are required. third party quality inspection services - geographical networksMany organizations do not have the extensive geographical networks that larger retailers have. Therefore your internal staff ends up spending a lot of time traveling for quality control inspections, with not enough time spent focusing on the quality of a product. This often slows down production processes, with a longer eventual time to market. If we take the Fidget Spinner example into consideration, what is the likelihood of your in-house team being aware of that noncompliance before it hit the market. Think about it. An occurrence such as the above puts your brand at an unnecessary risk, with the potential for bad publicity and a major loss in sales. Can your organization afford this?

Do you have all of the technical expertise?

Product technical expertise and extensive testing and inspection experience is an undervalued commodity in the retail supply chain, how can you begin to leverage it to your advantage?

Third party

An external quality provider can provide you with an extensive network of technical expertise relating to your product and your quality systems, from factory audits to inspection and testing equipment and any specific techniques that may be needed to ensure that you meet your product’s compliance. third party quality inspection services - technological networkSome testing equipment may be unique to a specific product or if there is an update in testing procedures to be inclusive of recent changes in regulation. Often external providers are able to provide technical solutions based on the above specifications, along with teams that are well versed in new testing procedures. External providers will often send their inspectors on training to familiarize themselves with new equipment and testing procedures to ensure a high quality service is offered with a minimum product recall rate. For third party quality providers it is a priority to be up to date with the latest trends and developments in your industry along with the best practices that you should be following. This kind of knowledge and expertise can be leveraged to your competitive advantage.

In-house quality

While your in-house team may have the knowledge about the inner workings of your product and your ideal quality procedures, the reality is that it may not always be enough. Keeping up to date and monitoring the latest in standard and regulation requires a lot of resources, whilst there is also the challenge in maintaining and ensuring all documentation is updated properly, which is often not the case. This limited amount of resources can create unnecessarily complex procedures, that pile up to the sky, but that could have been avoided through a lot of strategic planning and structure. This is often not a strong suit for many smaller organizations. The key is to knowing your strengths and focus on them for your organization’s growth.

Appropriate technology for high quality procedures

Using appropriate technology that enables you to track your operational progress and things like your product inspection reports are essential to streamlining your quality operations.

Third party

It is essential for third party quality providers to have adequate and appropriate platforms in place to manage their clients quality systems effectively. These platforms also need to be capable of recording and tracking all data properly as well as manage certain aspects of documentation and communication. This technology provides thorough data, allowing you insights into your supply chain that would otherwise not have been available. This data can be leveraged into strategies for your brand, from risk mitigation to inventory management, to the way in which you conduct product tests in your lab and the kinds of inspection reports that are being produced. It needs to provide valuable and actionable insight so that you can optimize your quality systems for greater efficiency, which should lead you to a higher production rate and a faster time to market for third party quality inspection - TCF solutionyour product. Add all of this together, and you begin to see higher profit margins and the ability in which you can meet your products supply and demand will also have grown, creating that desired competitive advantage. Let’s take a brief look at the Technical Compliance File solution; This is a compliance solution that allows you reliable and accurate insights into your compliance processes. It is offered through a web-based platform and is a one-stop shop for all of your compliance documents, with real time updates and 24/7 access and insight. This kind of technology allows your organization more focus, control and insight.

In-house quality

Having up to date technologies or systems might be challenging because in-house quality teams still rely heavily on manual entry spreadsheets, which creates far too much room for human error. Skewed data can have far reaching implications for your quality systems, which can often build up into product recalls and financial losses for your brand. There is often the debate about the costliness of software. Now, while this is a valid argument, especially for SME’s trying to keep head above water which is often the only priority, it is suggested to consider slowly integrating technology into your quality systems to begin streamlining your procedures for greater efficiency One of biggest challenges is to manage all technical documentation systemically. It is important to remember that the authorities have the right to access the technical file which is meant to contain a full set of technical documents. Some retailers try to collect this technical documentation through in-house team, but often it is a bit of a mess due to various industrial norms such as;
  • The manufacturer changes the materials from time to time because they found a cheaper price elsewhere
  • The buyer will customize products that are being ordered to make it unique and at a higher market value
  • Most test reports expire a year later, so often documentation is either expired or non-existent.
Therefore an in-house team will have to keep chasing suppliers to provide all the valid documentation and at the same time they are under internal pressure from the merchandising team to release the shipment.

streamlining your shipment release process

Navigating the waters of international logistics is nothing short of a small miracle to get through without the domino effect of nightmares that occur along the way. Your shipments getting stuck in customs due to incorrect documentation creates a series of delays for the rest of your operation.

Third party

Working with a third party quality provider that is able to play a key role in the shipment release process can help avoid having to navigate this web of complex logistics by yourself. third party quality inspection servicesInspection reports are essential in getting shipments released from customs. It will be up to the retailer alongside your quality provider to set up a report rating guideline. This report rating guideline forms a baseline of automation which reduces the amount of manual changes after the reports review. The manual reviewing of these reports slow down the auto shipment processes immensely and this entire process becomes less meaningful. An external quality provider will be able to provide you with industry knowledge and best practices relating to rating reports. You will also be able customize your rating reports according to your product needs. Once this report rating has been created, your quality provider can utilize their technical systems to send daily reports to both the client and your chosen cargo company. This creates a much clearer and faster release process for both you and the cargo company. The mountain of paperwork from import licenses to full inspection reports, they have it down to a tee, enabling a streamlined, efficient process for your organization.

In-house quality

How often have you had a shipment stuck only to be told that you don’t have the correct paperwork? Thrd party quality inspection services - customs paperworkTraditionally an inhouse team often releases inspection reports as and when they receive them causing major delays, this is often due to in-house QC teams needing to travel extensively, which means they don’t have enough time to make the approvals that are needed for the shipments to be released in a timely manner. Not to sound repetitive, but to have an in-house team that has the capacity to manage the logistics involved with shipping would be a dream, no doubt, but getting through customs safely stems from being efficient in all the other points I’ve made above. In-house teams without the right amount of time, resources and technical expertise will struggle to cope with issues that could have otherwise been prevented. So here’s the deal… Managing quality is a complex system that needs 100% of your attention and focus. Are you able to dedicate that kind of time and resource to ensuring just that? This is a question that many often do not want to answer, but the reality is that you often cannot afford the time and resource that goes into creating fully optimized quality systems that can produce high-quality products for your brand and on time. So, what then? It might be worth considering hiring an external third party quality provider that can give you the time and resources that you need to streamline your supply chain operations. A third party quality provider is able to provide you with; * The latest in product regulation * Technical expertise * They have the appropriate technology to streamline your operations * They have the know how on how to navigate the waters of international logistics for your brand. This will give you room to begin focusing on what you are good at; producing those high-quality products and creating a level of trust with your consumer that is globally competitive. Have experienced working with third party quality inspection services?

Avoid Compliance Issues With Our Quality Assurance Solutions

Quality Assurance is essential to the efficient operating systems of your supply chain and, ultimately, your brand’s bottom line. But, the question is how often do you get caught up in procedural changes that leave your supply chain trapped in a web of complexities that you are unable to get out of or make sense of?

As a retailer, you know better than anyone that these complexities come with the territory of managing a supply chain, with the continuous changes in product regulation and compliance issues, to audit and inspection essentials, to also being able to get your product to market on time, having sufficiently passed all the compliance and quality inspections necessary.

Quality Assurance solutions.jpg

At this stage, you have either considered revising all of your operational procedures to encompass all the changes that need to be adhered to, or you have likely considered a third party QA provider. The thing to keep in mind here is that you are not alone. The web of complexities that have you entangled can be dealt with efficiently and according to your exact specification.

“What do I mean?”

Our case study takes a closer look at the QA challenges that two large European retailers were facing, and delves into exactly how they overcame this through API’s uniquely devised QA solutions.


The Challenges

Retailer A – Underwent major procedural changes and experienced 50% of their shipment being held due to basic procedural non-compliance rendering them “pending”.

“I am sure you are aware of how this can put huge pressure on your supply chain and bottom line.”

Retailer B – Began experiencing a large number of product recalls due to incomplete or unavailable Technical Compliance Files.

If you have had experience with the authorities, then you know exactly how complex acquiring a full and complete TCF is!


The Solutions

Retailer A – After implementing a customized quality management program, they were able to reduce their “pending” rate for non-compliance from 50% to 15%.

Retailer B – In a year they experienced a 60% decrease in the number of product recalls they had, owing to API’s in-house designed compliance software.

customized quality assurance solutions and compliance issuesBoth of these retailers experienced significant challenges within their supply chains, one had even previously adopted the services of a 3rd party QA provider, who made no strides in overcoming their challenges with them.

“There is no one size fits all approach to QA.”

Keep this in mind when you begin pondering over the use of an external QA provider.

This case study seeks to showcase the huge value in using a provider that is able to customize and tailor their quality assurance solutions based on your exact needs and requirements. This provides valuable insights into your supply chain allowing you to identify risks early, but also create somewhat of a partnership with your provider, based on trust and a quantifiable solution promoting growth and sustainability for your brand. 


Case Study: CQI (Continuous Quality Improvement) Strategy

A CQI strategy should be adopted to provide you with a road map toward improvement of your supply chain activities. It should be designed in such a way that takes your retail brand through the process of data collection, data analysis and a continuous cycle of monitoring of activities for efficiency.In this blog post, we take a look at one of our very own retailers that experienced various supply chain complications, and what we did to help them implement an effective CQI plan that would ultimately reduce their expenses and optimise their quality systems.

A continuous quality improvement Case Study

A well known European sourcing company kept finding that 60% or more of their inspection reports failed or were declared pending. As a quality director you will know that a high pending rating slows down your decision making process and directly affects productivity rates. It was at this point the retailer decided to review the problem in a lot more detail; through the services of a third-party quality provider – API.

So, what was API’s approach?

  • We needed to quantify the difficulties that they experienced. We went and recorded all of their product defects and fail or pending reasons for their products. Our inspectors capture all available data which is then entered directly into API’s data capture system. This process allows for data analysis to be done across all inspections or per category/ supplier.CQI

What was the problem?

One of the top reasons for pending products was a discrepancy in information that was found on the shipping mark compared to that of the product specifications.

But, why were these problems experienced?

The retailer had three different coding systems, which made it difficult for the supplier and they often mixed these numbers up.

API was able to find this problem through various stages of data collection and analysis.  API then presented their finding to the management team where it was discussed how to deal with these different coding systems, and what kinds of things should be present on the shipping mark in order to minimise their current supplier confusion.

What solution was implemented?

API was able to identify an opportunity for improvement within the rules and guidelines of the retailer, and the documents were modified to help minimise their suppliers’ confusion. An opportunity was also identified to update the supplier manual to be inclusive of these new modifications, which then needed to be re-distributed to all of the existing suppliers.

As a part of the continuous quality improvement plan it was strongly suggested to consistently monitor the company’s passing, fail and pending rates in order to effectively evaluate levels of improvement as a direct result of the implementation of the plan suggested by API.

What were the results of implementing this CQI plan?

The retailer experienced great success by implementing this solution. They experienced a passing rate that remained mostly over 80% even during peak season. 


CQI graph

After the improvement suggestions were implemented it helped this retailer to significantly reduce their pending and failure rates. In a situation like this, it’s important to note that even though the problem was not directly related to manufacturing, it still required both the quality and merchandising team to implement the changes as suggested by API.


Key Takeaways

Implementing a a continuous quality improvement strategy for your retail brand is essential for production, quality and management effectiveness – without it you will be firefighting problems all along the way. As a part of your strategy you need to be answering these five questions – if you aren’t go back and make sure that you do:

How did your CQI strategy improve;

       1.  Your organisational effectiveness?
       2. Your level of customer satisfaction?
       3. Your levels of compliance?
       4. Your organisational culture?
       5. Your organisation’s documentation?

If you cannot answer those questions definitively you may need to reevaluate your strategy to be more inclusive of addressing them.

Let us know in the comments section below about how you have gone about improving your own quality systems

Ready to begin tackling preventive quality management?

check out our preventive quality management guide to get you started


Why Every Company Should Use Environmental Auditing

Manufacturing in the 21st Century has brought about some ugly truths about the way in which many retail brands produced their products, from the amount of CO2 emissions released to the way in which manufacturers dispose of waste. Today, environmental auditing is not a mandatory practice for retail brands, so is it even necessary? 

At API, we believe that ethical brands are the most perfectly positioned to meet the increasing demands of consciously aware consumers today.

Your brand’s social and environmental standings plays a bigger part in the heart’s of consumers the world over than ever before. We have created a visual guide that takes you through:

  • What an environmental audit is
  • Why you should adopt an EMS
  • Complying with ISO 14001
  • Types and scope of environmental audits
  • Essential pre-audit/post audit activities 
  • Key benefits for your brand 

 See why an environmental quality audit is essential for your brand below:

environmental auditing

So Why does your brand need an environmental audit?

  • It ensures legislative compliance
  • It reduces your environmental impact.
  • It reduces your water and energy usage
  • It has positive implications for your brands image and your bottom line

An audit such as this will have long term benefits for your retail brand as well as ensuring a competitive place in the market.

 Click below for more on how you can get started with your audit today! 


2 Root Cause Analysis Techniques To Improve Quality

As a Root Cause Analysis (RCA) is a continuous improvement strategy used to identify the drivers of a problem, it serves the purpose of eliminating that problem from ever recurring again! But, how is this achieved? There are a number of RCA strategies that technical auditors can adopt to identify and eliminate the problem. In this blog post, I seek to take you through a tried and tested technique that many organisations adopt. So let’s dive in; Getting to the ‘root’ of the problem It is important to note that a root cause analysis should not be a once off thing that you implement in the odd major defective production case. You should have a Risk Assessment/Risk Management strategy that integrates RCA to exactly how you will diagnose non-conformities in your production process and handle your resolution process. 2 Root Cause Analysis Techniques for an improved quality audit The premise of every RCA can be defined as this;
  • Problem Recognition and Definition – You will need to acknowledge and define what your retail production problem is.
  • Identify the causes – You will need to go through the process of cause identification. The trick here is not to spend too much time brainstorming or mind mapping; this needn’t be a time-consuming aspect of the RCA.
  • Identify solutions – This step is based on your cause identification. In this step, you will need to identify the best possible solutions to addressing the problem so that it does not happen again.
  • Implement the solutions -If your products quality were compromised on the production line, you would need to begin implementing the solutions that you were able to identify in the previous step to prevent any future occurrences of this. The solution that you select needs to be one that optimizes and betters your operational processes. If the proposed solution does not accomplish this, you may need to repeat the above steps to ensure you come up with something that will.
An RCA should not be a time-consuming strategy. What it does need to do, is highlight the problems and make room for process optimisation.

So Who Conducts A Root Cause Analysis?

In a nutshell, the above is how an RCA would be performed, but who conducts them? This is a good question, especially if you are outsourcing your quality audit solutions to a certified third-party organization. Usually, your RCA is performed internally. Your factory manager can go for RCA training or a third-party organisation like API can deploy a trained quality auditor who will be able to assist you as you go through the RCA process. Can RCA’s Improve Quality Performance Results? Yes, they can improve your audit results, as your organisation is taking the onus to identify a recurring problem, analyse that problem to ultimately eliminate that problem, thus creating an improvement culture for your brand. The primary benefits of an RCA can have for your organization include this;
  • It provides a learning process to better understand the cause and effect of various solutions.
  • It provides a logical approach to solving your production problems through already existing data.
  • It can reduce your risk.
  • It will prevent recurring problems.
  • It will improve overall production performance.
  • It will leads to more robust quality management systems.
Through RCA an diagnostic you will be able to instil a continuous improvement system for your organization, where you will be able to reap the benefits of a well run production line. Let’s take a look at two popular RCA techniques and how you can go about performing them for any production problems that you may be facing.

The 8 Disciplines Problem Solving Technique

This problem-solving technique is used to identify the root causes of potential problems or nonconformities in your production process. It was developed and used primarily by the Ford Motor Company in the 1980’s for the above reasons; to identify and solve recurring production problems. This technique is not just for the automotive industry, but has proved itself useful for a diversity of industries. Many quality auditors undergo training to enable them to perform problem-solving techniques such as the 8D. The 8D technique is mainly focused on areas like safety equipment, factory procedures, factory flow, out-of-spec parts, logistics and any other concerns that may be a danger to workers. Let’s dive into how you can perform this technique; Defining the 8D Technique **Scenario – 2700 chairs were recalled last year because of fall hazards that were due to the breaking or bending of the leg. The CPSC found that structural frame of the upholstery chairs was missing a support block to the leg, which was against the original design specs. As I am sure you are aware – this is quite a problem, one I am sure your brand does not want to repeat. So let’s go into how you can adopt the 8D technique to solving a production problem such as the above; Create a team – You will need to establish a team with the appropriate the product and process knowledge. So this may be anyone who was in the factory, or even the QC manager as he may not have relayed the product specs correctly? Describe the problem – With your team you will now need to describe the problem in as much detail as possible using the who, what, where, when, why, how, and how many questions. These questions will enable your team to quantify the potential problem at hand. We know that 2700 chairs were recalled, you now will begin to uncover the reasons behind this. Implement and verify containment action – Once you have described and identified the problem you will need to contain those problems. How will your organisation prevent a massive recall like this in the future? Identify the root cause – Now you will need to identify all potential causes of the problem and question why it was not identified earlier. This process will come up with more than one cause, and each will need to be proved through some thorough brainstorming. Formulate and verify corrective actions – Based on the above findings you will need to define and implement the appropriate corrective actions.  2 Root Cause Analysis Techniques for an improved quality audit - Risk assessment for an improved quality audit Correct the problem and confirm the effects –  Based on the findings of the above steps, you will need to ensure that the cause of the problem is removed and you will then need to supervise the effects this may have on your future production process. Prevent the problem from recurring – As the 8D technique is a continuous improvement technique, you may need to revisit and amend the management systems and/or operating systems, practices, and procedures to be sure that your root cause has been removed and the problem will not recur. Congratulate the team – This is an important step as your team will have spent a lot of time reflecting and analysing each production step to the benefit of your brand. Acknowledge and recognise them for their efforts and thank them individually.

The Five “Whys” Technique

This problem solving technique is simpler in its approach and you may find that you need to adopt a more structured technique for more complex situations. In saying that, there are many organisations that adopt this technique for the above reason, as it is simpler and maybe less time consuming than others. This problem solving technique was devised in the 1930’s by Sakichi Toyoda, the founder of Toyota Motor Corporation, where it gained its popularity in the 1970’s helping to solve common production problems. This techniques is designed to ask “Why” five times. If we take an example such as this;  “We cannot assemble this product”.  Then a trained quality auditor would ask: Why? One part is too long or too short Why? The machine that cuts this part works inconsistently Why? One adjustment is loose Why? A lock nut is missing Why? The maintenance manual does not mention this lock nut In its simplest form we would have identified that the problem lies within the instruction manual – The manual can then be updated to include the problem of the lock nut.

Key Takeaways

Production problems are a struggle, but there are many ways in which these struggles can be avoided and prevent potentially costly recalls for your brand. In this post, we looked commonly used problem-solving techniques that will ensure a smoother production process for your retail brand. These root cause analysis techniques are designed to incorporate a full team approach to identifying the root-causes of any production problem you may be facing, and successfully eliminating them together to achieve greater production success.