Do You Know The Purposes of Your Factory Quality Audit?


Do You Know The Purposes of Your Factory Quality Audit?

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. This increase in pressure and pace mean that your product needs to be on the shelves faster which puts large amounts of strain on your quality procedures, which can result in lower quality products hitting the market. This is risky. Quality is complex at the best of times, and as you juggle this increase in pace, it can be difficult to stay on top of the smaller cogs of the quality machine. So what are retailers doing to avoid potential low quality products? They have begun outsourcing their quality systems to qualified third-party providers to help alleviate some of that supply chain pressure. One of the primary solutions retailers opt for, is a quality audit – to highlight those weak spots within your supply chain and create a plan of action for how you can address them. In this blog post, we take a look at the purposes of a quality audit for your household goods brand; we take a brief look at what the benefits of outsourcing your quality procedures are and what these benefits can mean for your organization.

Three Ways To Do conduct an Audit

Auditing has become a crucial tool for managing and monitoring the implementation of the quality systems of many factories. Let’s take a look at the three ways that these audits can be performed;
  • In-house audit – This is performed internally by an in-house team. They measure the strengths and weakness of quality and production systems against any international/external standards and regulation. This form of auditing is unable to provide your organization with any form of certification.
  • Second-party audit – This is when an organization performs an audit of their potential supplier, to ensure that they can meet your production requirements. Often these audits can be completed onsite to review the internal technical processes of the supplier, but this audit can also be performed off-site in the form of documentation reviews. It will be up to your organization to define what exactly you want to audit to help you make a well-informed decision about your supplier. This type of audit has nothing to do with QMS certification, as only a registered third-party auditing organization can provide this.
  • Third-party audit – This is conducted by a qualified audit organization, that is not connected to the supplier or brand by any nature. MThird party Quality Audit.jpgany organizations consider third-party audits for many reasons, mainly they have come to the decision to create a quality management system (QMS) such as ISO 9001. A third-party auditor would come in and assess whether or not this organization meets the requirements as laid out by the above QMS. A third-party auditor will then provide your organization with a certification stipulating that you meet the requirements as laid out. This is often a preferred audit option as the results are unbiased and certification has become a competitive differentiator.
In defining the above, if we have not left you pondering which one is better then we have not done our job… The great old In-house Vs. Third Party debate; You may be thinking that you are capable of maintaining high levels of product quality through your in-house quality teams, and while this may be true for now, but you do need to ask whether or not you can maintain and meet the demands of that ever-increasing consumer nature. I think it may be worth re-looking at the debate with your bottom line, your resources and time in mind…

The Purposes Of A Quality Audit For Your Brand

In defining the purpose of an audit for your brand, you will be able to understand who should be conducting your audit. The main objectives are as follows;
  • Certification – Many household goods retailers that produce a product that contains high levels of risk, such as toys and electrical appliances, etc. and are wanting to do business in Europe will need to comply with the CE directive as laid out the European Commission. The management system of your supplier will need to be assessed according to any one of the ISO standards and the certified accordingly. Bear in mind that the auditing company you choose to use will need to be certified by a regulatory body to certify you.
  • Performance versus compliance/conformance audits – Many audits have different purposes. It will be important to try and make sure that if you are performing an internal audit, that you keep it as holistic as you possibly can. Your audit will need to assess compliance and performance. The audit report will need to identify the suppliers standing according to both of these categories.
  • Follow-up audit – An audit will often present findings that will need time to rectify, in which a follow-up will be needed to ensure that corrective actions have taken place.
With your purpose in mind, are you able to come to know who should be conducting your factory quality audits?

The five benefits of using a third-party quality auditor

If you are unsure of the benefits that a third-party quality provider can provide you take a quick look here;
  • Expertise – Third-party auditors undergo formal auditing training and experience to notice noncompliance and unethical situations. This wealth of knowledge and experience will be of benefit to your organization. Innovation - Third party Quality Audit.jpg
  • Efficiency –  A third-party auditor has the infrastructure to ensure they meet your organization’s auditing needs.
  • Technology – They have the appropriate tools and technology to ensure a successful audit of your supplier.
  • Accountability – A third-party auditor will have pledged to uphold a certain code of ethical conduct and are held accountable to the greater company policies, rules, and regulations.
  • Risk Reduction – A third-party auditor is trained to identify mishappenings within the quality systems of a potential supplier. This insight allows you to manage risk early on.

Key Takeaways

Producing high-quality products, with no defects that could result in recalls, is likely a top priority for you and your brand. Are you able to invest your time and more resource to ensure that your internal audits are of the highest quality, unbiased and according to the requirements of a QMS like ISO 9001? You may need to consider outsourcing your audits to certified third-party auditors. They will be able to provide you with QMS certification, performance and conformance evaluation, they can offer follow-up audits and also provide insight into improvement strategies that would be of benefit to a successful supplier relationship. All of the above are things that your consumers highly value, which will positively impact your bottom line and strategically place your brand in the marketplace.




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! 


A Factory Quality Audit Checklist To Assess Your Suppliers

Household goods manufacturing and supply chain operations are often vulnerable to compliance and regulation violations. With the pace at which the many complex parts of a supply chain can move, it’s no wonder that retailers who trust too willingly in their suppliers can land up in hot water when things don’t go according to plan. The only way to address these challenges head on is by conducting a quality audit. Discover our factory quality audit checklist that touches on quality management, social and environmental compliance here. An audit of your supplier’s factory is conducted to ensure that your supplier and their factory’s operations are able to produce your product to your expected levels of quality, as well as ensure compliance in your product’s destination market. This is not the only reason though… Carrying out audits also help to assess the risks that may be present with a particular supplier and provide direction on how you can go about managing that risk. Ultimately, the decision to work with a particularly supplier will be up to you, but your decision will at least be based on a trusted risk assessment with a presented improvement strategy. Our checklist takes you through a what a brief assessment of your supplier’s quality systems would/should look like. We will cover 3 main sections in this checklist:
  1. Quality Assurance & Technical Questions
  2. Social / Health & Safety Questions
  3. Environmental Audit Questions

How Does A Quality Audit Grading System work?

For each checkpoint, the following guideline should be used; N/A – Checkpoint not available or not evaluated. 0 – Major non-conformity – absence of procedure or proof of big discrepancies in implementation – a corrective action will be designed for this checkpoint. 1 – Minor non-conformity –  incomplete procedure or proof of discrepancies in implementation – a corrective action will be designed for this checkpoint. 2 – Acceptable –  procedures are available and implementation is acceptable, however opportunities for improvement exist – an opportunity for improvement can be designed for this checkpoint. 3 – Good – procedure and implementation acceptable, no opportunity for improvement identified. 4 – Best Practice – factory has designed and implemented best practice of industry.

Quality Assurance & Technical Questions

a factory quality audit checklist 1WHAT TO LOOK OUT FOR:
  • Quality manual and all procedures show revision control (sign-offs & dates), history of changes
  • Product quality yield data, problems and corresponding improvement actions, status of preventive/ corrective/audit results
  • Strategic and tactical objectives, goals, action plans, etc.
  • Analysis of field failures, inspection yields, resource needs, internal audit results, corrective action status, etc.
  • Management review meetings, goal setting, performance measurement, internal audits, action plans, customer surveys
  • Employee involvement/recognition program, Lean, Six Sigma, kaizen, SPC, 5-S, cost reduction programme
  • Corrective actions, trend charts, meeting minutes, non-conformance frequency & cost analysis
  • Management review meetings and corrective actions
  • Look for use of training aids and work instructions at work stations
  • Qualification records, certification history
  • Records of testing, production quality records, audit records, interview workers to validate training records
  • Job descriptions, job skills assessment, training records, training manuals

What if my quality assurance score is below standard?

API is able to customize its QA solutions based on your specific needs and requirements. API will provide the supplier information on how they can go about improving various things within a factory. This information will be relayed back you, the retailer, where you will gain insight into your potential supplier and their factory operations to ensure compliance across the board.


A factory quality audit checklist 2

What to look out for:

  • Procedure for training and communication and participation
  • Emergency preparedness and response plan, monitoring and performance measurements
  • Policies and procedures, health and safety trend charts, accident rate improvement history
  • Safety committee or group meeting minutes, accident investigation reports, safety audit reports
The social audit assesses the social systems and structures that your supplier has in place and is normally based on the standards as laid out by the SA8000. As a professional third party auditing company, API is able to provide their industry expertise and long time experience to aid you in achieving your social compliance certification.

Environmental Audit Questions

a factory quality audit checklist 3

What to look out for:

  • Environmental policy statement document
  • Records of agency/government inspection, procedures for measuring and monitoring environmentally sensitive activities
  • Record of purchases, waste stream and consumption; inventory control procedures
  • Records/use of; non-hazardous (RoHS/WEEE compliant) materials in production, biodegradable materials, returnable containers or packaging, recycling program, packaging materials made of recycled materials

Key Takeaways

A factory quality audit checklist allows you insight into your suppliers quality control processes and manufacturing capabilities, their strengths and weaknesses. This empowers you to strengthen those weaker processes where needed. A quality audit checklist will help ensure:
  • your factory’s quality systems are up to date, organized and well recorded.
  • confidence in the selection of your supplier based on checklist insights.
  • confidence in the quality of the product that is manufactured.
  • confidence that compliance standards are actively being met by your supplier.
This approach allows you to build a more collaborative relationship with your supplier, where you supplier has a more invested approach to your brand and its product. It helps to ensure top class quality systems and a mutually beneficial relationship between supplier and retailer.

What Are The Common Reasons For Quality Audit Failure?

Unethical or morally gray manufacturing practices are not uncommon for many factories across the globe, most commonly situated in third world or developing countries, for their cheaper manufacturing options. The figures, from the UN’s International Labour Organisation (ILO) and the Walk Free Foundation, show 24.9 million people across the world were trapped in forced labour for 2016. These cheaper conditions translate into unregulated conditions with little to no regulation and monitoring of working conditions, most of them horrific. These situations have lead to an increase in monitoring and auditing solutions to try and regulate the some of the terrible working conditions that many retail brands have been susceptible to over the years. Despite this, there are still many that fail to meet certain international standards and regulations put forth, making it absolutely necessary to know just what you need to avoid! In this blog post, we dive into some of the most common reasons that households goods suppliers fail their quality audits and what you can do to make sure your retail brand doesn’t fall into this pool.

Technical Failures

A technical audit is used to evaluate and assess a factory’s existing quality systems from policies and organizational structures, to the defined roles and responsibilities of the factory’s staff. So what are some of those common reasons a supplier may fail their technical audit? Disorganised documentation – As mentioned above, your supplier’s quality policies, records, reports and all documentation will be reviewed. Many factories often run on outdated systems like old excel spreadsheets, which opens your brand up to human error and potential risks that can be avoided. Without adequate reporting procedures or quality policies, the likelihood that your production requirements will be met, according to specification and in compliance with its destination market, will often not be the case if you choose to work with a supplier that has undefined and disorganized systems. Calibration and Upkeep of Machinery and Equipment – Many factories are dotted between third world and developing countries. There is a reason why Europe and U.S.A prefer to source abroad. It is often a lot cheaper than what they can find within their own borders, but that does not come without its own set of challenges.   Calibration of machinery in quality audit Many factories struggle with resources and finances, which means their money will often go into sourcing raw materials for the next production before putting money into the servicing of their machinery and equipment. This will mean that when an auditor comes to inspect the factory and its layout that the machinery is often out of calibration or filled with too much oil, which can contaminate your product and potentially places your brand in a risky position. Not ideal.

Social Failures

A social audit assesses the social systems and structures that your supplier has in place. Social compliance audits are always in line with the standards as laid out by SA8000; Child labour – Many social audit failures arise from being socially non-compliant with child labour causing an immediate “zero tolerance” failure. This is a serious violSocial Compliance in a quality auditation. If this is discovered during your audit process, it is recommended to rather find a different supplier. There are no grounds where this is acceptable. Hazardous working conditions – Hazardous and unsafe working conditions are not unheard of in many third world factory’s across the globe and are often the cause of factory technical audit failure. Things like faulty Personal Protective Equipment (PPE), expired fire extinguishers, no clearly marked exit signs, exits not in working order, machinery that is in need of calibration or lack of safety gear found on heavy machinery can lead to audit failure. These safety violations are easy enough for your supplier to address and solve, so bear this in mind upon receiving audit results as you will often need to factor in corrective time for your supplier. Panasonic and Sony have been caught in supply chain scandals, which have created immense amounts of bad media coverage for the global electronic brands. They have been accused of unfair labor practices in factories, vastly underpaid staff and electrical components that are said to be sourced from parts of the world known to be inclusive of child slave labour.

Environmental Failures  

With regards to ISO 14001, while it’s not a mandatory compliance standard, it is a little more complex to navigate because of this. But as the rules of engagement in retail have shifted into the hands of the consumer, retail brands are forced to rethink the application of this standard within their supply chain. Consumers today, are interested in reducing their environmental impact on the planet and your brand should help them do just that. How you ask? By complying with the guidelines of ISO 14001:15 – In saying that what are some of the common reasons many factories fail environmental audits? Incorrect methods of waste storage or disposal – This is often a problem as many factories do not have the capability or facility to dispose of their waste correctly. If your factory disposes fumes into the atmosphere or disposes untreated water into sewerage systems, it is considered to be an environmental risk and grounds for audit failure. Often a certified third-party waste disposal company will need to come and collect your waste to ensure that is disposed of correctly; your supplier can receive certificates, stating correct disposal as well. Environmental Quality Audit Let’s take a look at how this could play out; Wal-Mart paid a criminal fine of $11 million and another $3 million to the Missouri Department of Natural Resources, for violating the Clean Water Act by illegally disposing of hazardous waste materials. This is a serious violation and a costly one at that, environmental violations are not taken lightly so bear that in mind as you proceed.  


Understanding the most common reasons for quality audit failure allows you insight into the kind of supplier your brand should be aligning itself with. These audits are complex (especially the social and environmental audits), and it is up to the observation skills of your chosen auditor that will determine the level of compliance that a supplier meets. The audit report that your retail brand receives will present you with a full picture of all the risks a third-party auditing company is trained to see. It will be up to you to make a final decision, bearing in mind the authoritative position consumer’s today are in, by putting your customers first and producing products in an ethical manner, you automatically put your brand first.

Let us know in the comments section if this has been helpful information for you.

Ever wondered whether environmental auditing was for you? Check out our visual guide to help you on your way!