Performing factory audits to assist in supplier selection or throughout the production cycle is a primary contributor to a reduction in both sourcing risks and cost. While specific standards often apply, such as the ISO series, factory audits do have several key components in common.
1) Management
Who is the management and what management style is generally supported within the corporate culture? Through observation and interviews, an audit reveals attitudes and general values that serve as indicators of the overall organization’s realized performance.“One of the greatest lessons I’ve learned over the past couple of decades, from a management perspective, is that really when you come down to it, it really is all about people and all about leadership.” ~Steve Case
2) Metrics –
Show the data. Suppliers should be able to back-up any claims with supporting data that can be reviewed and verified. The specific metrics vary depending on a number of factors, but identifying those factors and making sure suppliers are following through with documentation and review is critical to any industry.“90% of making the correct decision is gathering information.”
3) Corrective Action
No one is perfect. But, the difference lies within how an organization handles nonconformities, or any service affecting issues that may occur. Having paperwork on-hand is an excellent start, but suppliers should demonstrate through training and observation that staff consistently follows through with procedures. Also, how is the supplier tracking trends and making necessary process improvements?“For every failure, there is an alternative course of action. You just have to find it. When you come to a roadblock, take a detour.” ~Mary Kay Ash
