8 Similarities between Factory Audits and Product Inspections in China

In our last article, we listed the major differences between a supplier audit and a quality inspection

Well, there are also many similarities, some of them obvious and some others less so. Keep reading to see 8 of them…

How Is A Factory Audit & Product Inspection Similar?

1. They both involve going to a supplier’s factory

For all the buzz generated in the US by e-audits, this trend has not caught on (yet?) in China. To get a true picture of the way a factory is organized, it is necessary to go on site.

Why is that? The vast majority of Chinese suppliers can be counted on to lie when business is at stake. This statement may sound harsh, but that’s the behavior their environment has rewarded so far. Being fully honest is seen as a sign of dumbness here…


2. A code of conduct is necessary

In both cases, a professional behavior is expected. The employee dispatched to a supplier’s factory projects his/her employer’s image, and there are serious risks of bribery that need to be mitigated.

What does it call for?

  • A formal approach that includes an opening meeting, following a certain procedure, and a closing meeting.
  • A strict policy about being offered gifts, money, entertainment, etc.
  • A strict policy about conflicts of interests.
  • Strict non-disclosure of confidential information.
  • Guidelines about not being ‘too friendly’ with factory representatives.


3. Working on the basis of a checklist

A checklist is the basis for the inspection workflow and for the audit trail.

Checklists tend to be more detailed for product inspections (which is why it is easier to use a fresh graduate for that job) and are usually less detailed for audits (they include many words such as “appropriate”, “decent”, etc. that require informed judgment).

4. Pulling facts and checking their conformity

Audits start with inspection, as evidence has to be gathered and checked (is it conform to requirements?). Only after that initial phase do the auditors analyze the data and then form opinions.

I have seen more and more inspection-style audits, where the checklist keeps the auditor at the lowest level of work. For example, “Are there incoming QC records? Check 5 recent deliveries from suppliers at random. If 2 or more have no IQC records, tick No. If up to 4 have IQC records, tick Yes”. And there no comment – just a ‘yes’ or a ‘no’.

This is called ‘tick-the-box audits’. It allows the buyer (or the auditing firm) to send relatively unskilled staff. It aligns what 2 separate auditors would find in the same facility. But it is very superficial and tends to focus mostly on paperwork and, sometimes, on the equipment. They are easy to game!


5. They often work as a team

Auditors need to work as a team in a large/complex organization, under the authority of a team leader. One person might check IQC and the warehouse, another goes on the shop floor, and so on, and at the end they put their findings together and the leader decides what constitutes a non-conformity.

When several inspectors work on the same batch, there is usually also a leader. They might divide the work among themselves (A does the measurements, B does the tests in the factory’s lab, and so on) or they might work together, alongside each other, and divide the SKUs among themselves.


6. No advice can be given to the factory

Inspectors and auditors are not consultants. In all third-party (and many second-party) missions, they are forbidden to give advice on what to do to fix the issues detected.

In many buying offices, though, they are encouraged to follow up with the problem solving process and to drive it if needed.

7. They are tools for the buyer to take decisions

Someone will use the audit/inspection report to make a decision that can have heavy business consequences for the supplier: can this batch be accepted (shipped and paid for entirely)? Can we start engaging a relationship with this supplier?

That’s why clarity of reporting is quite important in both cases. Also, inflammatory remarks, which are likely to damage the relationship with the supplier, should be avoided.


8. The final report focuses on negative findings

After a QC inspection, what does a buyer want to know? “What problems were found, and is it OK overall?”

After a factory audit, what is the question? “What are their weak points, and is it acceptable overall?”

Auditors can make the effort to note positive practices, but really what all stakeholders (including on the supplier side) want to know is the problems found and their severity… 


I hope this comparison was interesting. These are two different types of jobs that require different approaches, but many of the bases are the same. It does make sense to manage them inside the quality department.

Can you think of other similarities? Please write comments below and we’ll make sure to respond.

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