Exploring Process Audits | Vetting Chinese Suppliers (Part 7)

In This Episode... Join us as we continue our deep dive into the vetting process used when sourcing new Chinese suppliers. We've already discussed quality audits and social compliance audits, and this time we're going to cover factory process & system audits. While this type of audit may not differ too much in terms of structure (an auditor still goes into the factory observes, questions staff, and takes notes), this time we're checking the maturity of the factory's systems and process controls with the objective of assessing how reliable they are, if they've put thought into how they manufacture, if they follow best practices, and, therefore, if they're going to be capable of fulfilling your expectations in the longer term. As a part of the supplier vetting process, process audits give great insight into whether you're selecting a supplier who can fulfill their promises to you. Show Notes Start to 9:35 - What are factory process audits? A general explanation of what auditors do when they go into a factory. How many audits don't focus on production processes and the new product development side of things (which can reduce risks at an early stage). The auditor checks processes (for example, the cutting of materials) in detail and assesses them while considering if all possible issues are avoided.  9:35 to 12:05 - Why it helps process auditors to have real-world knowledge about the production processes and products being manufactured, but that they also require an open-mind and the willingness to ask a lot of questions. 12:05 to 14:56 - What kinds of businesses will benefit from performing process audits? Order size and the nature of the products will impact if they're useful. Importers with a lot of money at stake or producing technical or high-risk products will find them useful for providing an in-depth analysis of the risks involved with dealing with that supplier. 14:56 to 15:36 - A quick definition of 'high-risk products.' 15:36 to 32:58 - What is usually checked in a process audit? A list and explanation of each point are given: Management systems (16:30) New product introduction (16:54) Specific process controls that are relevant to your needs and product (using plastic injection molding as an example) (18:00) Training & staff evaluation when hiring (21:12) Equipment - funny anecdote about a factory doing CNC machining in a shocking way (21:50) Predictive/preventive maintenance (24:22) Mistake proofing for operators (26:13) Statistical analysis of processes (27:13) Measurement devices (27:42) Environment - good anecdote about a kids' toy factory (29:41) Office activities (32:15) The shop floor - warehouse and suppliers to check components (32:28) 32:58 to 34:32 - GMP checklists - if the supplier is following this, it reduces the need for the auditor to be extremely familiar with the manufacturing processes in use. 34:32 to 39:05 - Can process auditors give advice to spur positive improvements? This is dependent on context - a 3rd party auditor is unlikely to do this, however, internal or 2nd party auditors may well do this. 39:05 to END - Outlining roughly what is in a process audit checklist - capacity / incoming material check / setup of processes / process controls / checking finished products / HR / Equipment (read this blog post for more details about audit structure).   Extra information you may find helpful This episode used this blog post as its basis: Factory Process & System Audit Explore Sofeast's factory audit solutions, get pricing, and arrange your audit Go back and listen to all of the episodes in our mini-series about vetting Chinese suppliers Get in touch with us Connect with us on LinkedIn Send us a tweet @sofeast Prefer Facebook? Check us out on FB Contact us via Sofeast's contact page Get even more great content or assistance with your own project Visit our website at Sofeast.com  Subscribe to our YouTube channel Subscribe to the podcast  There are more episodes to come, so remember to subscribe! You can do so in your favorite podcast apps here: Apple Podcasts Spotify Stitcher Google Podcasts TuneIn