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Selecting A Reliable Supplier: The Limits Of Factory Audits

by Renaud Anjoran on 24 Jan 2018

Selecting a reliable supplier in China or, say, Vietnam can be a daunting process. In this article, let's explore factory audits which you may use to assess potential suppliers, and the limits of the audit score.

The Thing About Factory Audits...

One issue with audits is, they tend to favor larger factories. Simply because it is easier for them to score highly, even if they are actually less well suited to the job.

Why is that? There are 2 reasons:

  • Larger organizations naturally need more structure. Procedures, data reporting, documented processes, and so on become more important for running a smooth business.
  • Companies that have been audited many times know what auditors like to see. They have a quality manager who can show documents that “look real”, they have done the little things that don’t cost much money (e.g. getting tools calibrated), and so forth.

 

Does a higher factory audit score mean a supplier is better suited?

No, not necessarily.

 

 22 ways to cut costs on your quality inspections

 

5 other things to consider when selecting a reliable supplier from China or elsewhere

 

  1. Are you a priority for them? - Going with a larger factory can mean that you are just one of their many customers and come way down on their list of priorities – maybe only representing a small percentage of their total sales. This can also work against you if they grow quickly after you sign up with them and you become even less of a priority for them.

 

  1. Find out things the audit won’t cover - You need to ask questions that are specific to your needs. Will they work well with what you will need from them? How bespoke are their services? Are they interested, for example, in spending 5 months of development time on your new product, and as a result build a new capability for their company? If they aren’t a good match, it doesn’t matter how many ISO accreditations they have.

 

  1. When are their busiest times? - You need to know when they will be at their most stretched in terms of what they can deliver. You don’t want quality to be affected by this. If they tend to be less loaded at the periods you’ll need them to make your products (e.g. they make BBQ grills for the US market and you are in the Southern hemisphere), it will help a lot.

 

  1. How safe is your intellectual property? - Do they work with your competitors? If they do, how can they guarantee that no sensitive information would be deliberately or accidentally shared with them?

 

  1. Do they focus on quality or volume? - Again this needs to be a match for you. If you need products of the highest quality, it will make no sense for you to get suppliers who put their emphasis on getting out the highest volume of products with less of a focus on quality. An excellent indicator of this is what other customers they serve, and in what distribution channels (and at what price) their products are sold.

 

All of these questions will lead to information that you need to take into consideration alongside anything the audit tells you about your potential new suppliers. Also, remember, a supplier audit is quite different from a quality inspection, and so using specialized staff or an experienced third party to undertake any audit is recommended.

 

What do you think? Do you use both an eligibility score based on a factory audit, and a suitability store based on other questions? Share your experiences and questions about factory audits and supplier selection by leaving a comment, and you may also like our in-depth guide to quality inspection software too.


 

22 ways to cut costs on your quality inspections

Topics: sourcing, factory audit

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About the Author

Renaud Anjoran

Renaud has 10 years of experience in the quality and manufacturing fields and is a certified ISO 9001 lead auditor and ASQ certified quality engineer. He was quoted in the New Yorker and the LA Times, and his articles have been published in Quality Progress, Business Insider, and more. His role is to ensure SynControl really solves customer's problems and saves them money.

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