What Is an Audit?
A factory audit assesses a production site as a whole: physical infrastructure, machinery, production flow, quality control arrangements and working conditions are examined together. It is the most frequently requested audit when a new supplier is brought on board.
Why Is It Done?
The aim is to verify that the site is genuinely able to deliver the capacity and quality it claims. The gap between capacity on paper and reality on the shop floor can only be understood by seeing it in person.
Who Requests It?
- Importers and buyers looking for a new supplier
- Brand owners planning contract manufacturing
- Retail chains
- Companies conducting a review before an investment or partnership
- Buyers wanting capacity verification before ordering
Audit Criteria
The criteria are the buyer's factory-audit checklist or a sector scheme. ISO 9001 can be referenced for quality, the customer's code of conduct for social matters, and the relevant product standard for product safety.
Audit Scope
- Facility details: year founded, area, headcount, shift pattern
- Legal status: trade registration, operating permits, licences
- The machine park, capacity and maintenance status
- Production flow and layout
- Raw-material intake, storage and inventory management
- Quality-control points and inspection equipment
- The calibration status of measuring instruments
- Product and batch traceability
- Packaging and shipping preparation
- Working conditions, hygiene and occupational safety
- Environmental practices and waste management
- The use of subcontractors and contract manufacturing
Related Standards
- ISO 19011
- ISO 9001
- ISO 45001
- ISO 14001
Audit Process
- 1Defining the Scope and CriteriaWhat is to be audited and against which criteria is set out in writing: a customer code of conduct, a specification, a standard or a checklist.
- 2Preliminary Information GatheringThe size and activity of the party to be audited, its audit history and any open nonconformities are reviewed.
- 3Audit PlanThe audit date, team and timetable are prepared; the areas to be visited and the roles to be interviewed are planned.
- 4Opening MeetingThe purpose, scope, method and reporting format of the audit are explained; the principles of confidentiality and impartiality are confirmed.
- 5On-site AuditProduction or service areas are walked, records are examined and workers are interviewed. Findings are recorded on the spot.
- 6Classification of FindingsDeterminations are graded according to the classification of the scheme in use (critical / major / minor / observation).
- 7Closing MeetingThe findings are presented to management, their justification is explained and the expectation for corrective action is set out.
- 8Report and Follow-upThe audit report is issued; a corrective action plan is obtained and its close-out is followed up. Where necessary a follow-up audit is carried out.
Findings
Findings are classified as critical / major / minor. The declared capacity or machine park not matching reality, undisclosed contract manufacturing, and a missing legal permit fall into the critical category.
Audit Report
- Details of the audit body, the auditor and the auditee
- Date, duration and scope of the audit
- Criteria or checklist applied
- Areas and processes audited
- Findings and their classification
- Evidence and photographs supporting the findings
- Scoring or rating, where the scheme requires it
- Corrective action plan and close-out status
Limits of the Output
This audit documents the situation observed at the time of the audit and within the scope audited. Auditing is sampling-based: the records examined and the areas visited are selected to represent the whole, but this does not mean that every record was checked. The report is neither a guarantee nor a certificate, and it does not relieve the auditee of its responsibility.
Accreditation
Accreditation differs with the type of audit. Third-party audits underpinning management system certification are carried out under ISO/IEC 17021-1 and those underpinning product certification under ISO/IEC 17065; these scopes are subject to accreditation. First- and second-party audits, and audits governed by a scheme owner's own rules (such as SMETA or amfori BSCI), do not fall within accredited certification; they are conducted following the ISO 19011 guidance and produce a report. EUROLAB holds internationally recognised accreditation under ISO/IEC 17021-1 and ISO/IEC 17065, granted by accreditation bodies that are signatories to the IAF multilateral recognition arrangement; which audits can be offered within accredited scope is confirmed in writing at the quotation stage.
Scope and authorisationsRelated Audits
Frequently Asked Questions
What is the most common finding in a factory audit?
That part of the declared production is being carried out by an undisclosed subcontractor is a common and severe finding. In that case, the facility the buyer audited and the facility actually producing the goods are different, and the entire audit assurance is undermined.
Are a factory audit and a social compliance audit the same?
No, but they overlap. A factory audit focuses on capacity and quality and looks at working conditions only superficially. A social compliance audit examines working conditions in detail, including worker interviews; it is a separate audit.
Is the audit sampling-based?
Yes. The auditor cannot examine every record and every product; sampling is done to represent the whole. No findings arising from an audit therefore does not mean there is no nonconformity at all; an audit provides assurance, not absolute proof.
Is the audit date announced in advance?
It depends on the scheme and the buyer's policy. Announced, semi-announced (given a time window) and unannounced audits can be used. An unannounced audit aims to prevent records from being prepared for the audit and is becoming increasingly common.