Factory audits are one of the best ways to get a full picture of your supplier’s sourcing and operational policies and ensure that they align with your company’s brand image.
Overall Benefit of Factory Audits:
- Protecting your company’s image and your brand image(s).
- Evaluate core objectives of safety, security, ethical operations, compliance with government regulations, adherence to your company’s standards, and avoiding costly supply chain interruptions.
The type(s) of audit that’s best for your company depends on the type of product or service you provide.
In this article, we’ll cover the 6 most common types of audits and their benefits, so you can determine the most suitable factory audit for your organization.
What are the 6 Most Common Types of Factory Audits?
Ethical Audits help to ensure social accountability is being reviewed. With increasing pressure for all companies to be socially accountable – to provide healthy, safe, and ethical work environments along with sound labor practices and pay – an ethical audit ensures the appropriate work conditions are being followed. The criteria used for ethical factory audits can be both client-specific and based on several different international standards (Example …. SA8000, SEDEX, WRAP….)
1. Ethical Audits / Social Compliance Audits:
Benefits of Ethical Audits:
- Ensures your supply chain has decent working conditions and human rights practices
- Helps determine compliance with statutory requirements
- Prevents unauthorized subcontracting
- Helps gain an accurate understanding of ethical compliance
- Builds cooperative relations with suppliers
- Improves your company’s brand image and consumer loyalty
2. Technical Audit / Quality Management Audit / Manufacturing Audit:
During a manufacturing factory audit, the auditors determine if a supplier can produce a product that meets your company’s specifications, addressing costly disruptions, and preventing (further) costly disruptions once production is launched.
Benefits of a Manufacturing Audit
- Verifies that your supplier’s manufacturing facilities are suitable to produce your product
- Ensures alignment of your company’s sourcing policies and your supplier’s policies
- Identifies and mitigates potential quality, operational, and ethical risks
- Evaluates the competence of factory management
- Quickly find out whether a supplier can carry out your project.
- Determine whether the business complies with statutory or regulatory requirements.
- Reliable assessment of the manufacturer’s capability and facilities.
- Provide an overview of the company’s processes, operations, and workflows.
- Identify areas where the business can improve and make improvements.
3. Customs-Trade Partnership Against Terrorism (C-TPAT) Audit
The C-TPAT audit focuses on improving the security, with respect to terrorism, of private companies in supply chains. The program is led by U.S. Customs and Border Protection. Audit programs are designed to assess and enhance security measures, both from a physical and virtual perspective.
Benefits of C-TPAT
- Strengthens your supply chain security
- Verifies compliance and ensures the integrity of security practices of business partners in your supply chain
- Improves U.S. border security
4. Fire & Safety Audit
Fire Safety audit is a systematic and independent evaluation of the fire risks present in the premises and involves recommendations about appropriate measures to control and mitigate the effects of fires. Applicable Standards: National Building Code 2005, IS Standards in Fire Safety
Organizations applicable for Fire Safety Audit:
- Industry bodies
- Corporate Houses.
Benefits of the Audit:
Fire Safety audits enable the organizations to address the issues by identifying the following:
- Identifying all significant fire hazards.
- Evaluation of the existing control measures.
- Determining the additional control measures required.
- Evaluation of the current fire detection and firefighting facilities.
- Testing of all fire safety equipment and precautions.
- Training and instruction to all occupants of premises about fire safety.
5. Environmental Audits
By monitoring and improving the environmental impact of your supply chain, environmental factory audits help evaluate compliance with local laws and regulations as it relates to environmental protection.
Benefits of Environmental Audits
- Assurances that international principles and your company’s compliance requirements are both being followed
- Provides the ability to combine audit results with lab testing to capture a complete picture of your supplier’s environmental performance
- Leads to the improvement of environmental performance
- Verifies compliance with local and international regulations for environmental protection
6. Food Supplier Audits
Factory audits for food suppliers, and food supplier audits, are designed to assess food hygiene and good manufacturing practices. They focus on food quality and safety. Plus, they ensure that facilities meet the appropriate standards.
Benefits of Food Supplier Audits
- Demonstrates your commitment to food safety and quality
- Increases consumer confidence
- Improves operational efficiency
- Ensures adherence to government regulations and requirements of your destination market
Your Next Steps
Factory audits help ensure your supply chain is complying with local and international standards, your own company’s standards, and, ultimately, aligning with your company’s image standards.