Why a Factory Audit in China is Key to Success

2021-05-19

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What is a Factory Audit in China?

There can be no denying that China is currently home to the most exciting and innovative manufacturing opportunities in the world. By marrying the latest technologies and the most dedicated workforce, China's balance of cutting-edge technology and a dedicated labour force can see your vision of producing high quality, affordable products become a reality. However, for many western businesses the idea of working with a supplier on the other side of the world can be a daunting prospect. 

This is where a factory audit comes in: it's a series of rigorous checks, carried out by your own dedicated China sourcing agent, that will ensure the supplier you’re working with is keeping to the promises you have made.

While trying to win a new business deal, we all know that it’s easy to promise the world, and we’ve all been in situations where someone has let us down. In your personal life being let down can be painful, but, in professional situations, a supplier letting you down can spell the end of the reputation you’ve spent a lifetime building.

So how do you know that the factory you’re approaching offers the required standards for manufacturing your product? Will every product it makes meet your customer’s high expectations? Can you be sure that your factory isn’t infringing national or international standards of worker’s rights – is there a scandal waiting to happen? And does it actually adhere to the environmental standards that it has promised, or will your good intentions see you getting publicly caught out because someone else has decided to cut corners? 

Choosing the right factory to produce your company’s products is one of the most important decisions you will make. There can be no debate that China – with its wealth of experience, its ability to access to the latest technology and its dedicated workforce – is home to the best manufacturing in the world. 

But in order to make the most of this opportunity, and to avoid falling prey to some of the less honest manufacturers out there, you should ensure that you have a clear set of expectations that are being enforced, on the ground, in China.

Top 6 Benefits of Factory Audit in China

1. Ensures High Standards

Any business leader knows that workers perform at their best when their hard work gets rewarded. But a clear set of expectations is only the first step in making sure that standards remain high – the next step is ensuring they’re being enforced. So how can you keep an eye on your workforce if you’re thousands of miles away? 

This is why your product sourcing and quality inspection should be seen as a key feature of your business, something that is carried out effectively and intelligently, by a company with experience.

We will ensure that your business plan is be wedded to a performance metric that is actually enforced, day-on-day, week-on-week, so that your workers know that their hard work and dedication are being rewarded. 

A good factory audit will ensure hard workers know exactly what is being demanded of them, which is something that has been proven to improve productivity across the board.

2. Offers a Clear Line of Communication

Successful communication is the oil that lubricates modern businesses. Without suppliers, producers, sales teams and business leaders communicating successfully, businesses can end up falling down on even the slightest hurdle. This can cause ruinous expenses and will, inevitably, lead to damaging the brand that you have dedicated your time building.

It’s also important to remember that communication is only as strong as the weakest link, and when your business offices are located is thousands of miles away from your production line it’s easy for those essential links to become stretched and broken. A good factory audit will ensure that you have a clear, strong line of communication directly to those essential workers, ensuring that you don’t see the all-important lines of communication breakdown just when you need them most.

But good communication isn’t just about avoiding issues. It will also ensure that you are maximizing productivity. It is impossible to make rational decisions about how you can improve your processes if you dont fully understand what is happening in your production houses. By developing a clearer understanding of what is taking place, and having a clear line of communication directly to the producers themselves, you will be able to effectively manage the production process, giving you the best shot at driving out waste and inefficiency from your business. 

Communication is central to any business, and a good factory audit, with a reputable company, will ensure that your lines of communication are always clear and clean.

3. Provides Opportunities for Innovation

It is impossible to find creative solutions if you don’t fully understand what you’re working with, and a high-quality factory audit will ensure that you are always aware of what is at your disposal. 

No-one would embark on a journey without knowing what resources they had with them. It would be like trying to climb Mount Everest without knowing what was in your rucksack! But too many businesses try to manage the complex task of production without a clear idea of what their tool kit even consists of. 

This is doubly true when you consider just how changeable the current working environment is: new technologies and exciting developments lead to a constantly evolving playing field, and without being able to see what is coming into play it is impossible to respond intelligently.

However, with a thorough factory audit, and the factory audit checklist that it will produce, it’s easy to see exactly what you’ve got at your disposal and make sure that you’re making decisions that keep you one step ahead of the competition.

4. Ensure that Ethics and Excellence Combine

It's not hard to fall foul of the modern world – social media has meant that small-scale scandals can explode out of all proportion in moments, and this can lead to irreparable damage to a reputation you’ve spent a lifetime building. Environmental fears and human-rights' concerns now have to be considered as a part of our regular working practice, as a perceived lack of commitment to corporate responsibility can be astonishingly harmful to your reputation.

But even if you’ve found a factory that you think shares your business ethics and has similar standards of excellence, can you really be sure that it will maintain those standards once you’re back is turned? A regular factory audit will ensure that your reputation is being protected and that the promises you’ve made, are fulfilled.

So much of the modern world is built on trust – and trust can be slippery if people feel that they can get away with things. Even the most honest worker will sometimes try to shirk a responsibility if they think they can get away with it. But with a regular factory audit you can be sure that someone is keeping an eye on your factory’s employees with the same care and attention to detail that you would. 

Without knowing what your factories are doing, you are flying blind when it comes to corporate responsibility and you’re running the risk of getting caught out. 

A factory audit will ensure that you have a clear vision on what is happening with your business, and, in this respect, can you really afford to be without one?

5. Mitigates Your Risk

Business can be risky. In fact, risk should be built into any successful business model. You cannot succeed without driving yourself to the limit. But any successful business owner knows that taking risks means managing them: you look before you leap, and you mitigate any potential pitfalls to ensure that you’re not going to end up with a needlessly bloody nose. 

Despite knowing this, many companies ignore the relationship to their key suppliers in a way that they would never do with employees working closer to home. We don’t simply ignore management appraisals, keyworker targets or detailed job specs when employing at head office, so why do so many companies ignore them when it comes to the front-line workers who are actually producing the goods? 

It is a fact that, for a multitude of reasons, risk increases with geographic distance – if you can’t visit your supplier, or regularly check the factory, or monitor quality assurance at the point of creation, then you are leaving one of the key components of your business up to chance. This simply isn’t worth the risk.

A factory audit is the next best thing to moving your factory to a location just down the road. It puts a pair of feet on the ground, on your production line, and ensures that any issues are ironed out efficiently and effectively. 

Too many companies – including some of your competitors, most likely – are leaving too much to chance. Don’t set yourself up for a fall by ensuring that you’ve arranged for a high-quality factory audit that will keep your business risks to a manageable level.

6. Offers Long Term Benefits

A factory audit offers countless benefits, and each benefit grows exponentially as years pass. 

A factory audit will improve your supplier’s performance, week in, week out; it will guarantee that you have lines of communication directly to the heart of your production line; it will allow you to keep pace with the innovations and technological developments that are so important in the modern world; and it will help you mitigate and manage the risks inherent in any successful business model. 

Any of these benefits will see you avoiding the kinds of pitfalls that many companies fall into, but the real benefits will only grow over time. 

The truth is that you can never know the details of all the pitfalls that you just missed out on; you can never know just how close your company came to failing, if it hadn’t done X or Y; we can never know all the things we did right, or list all the little moments of chance that allowed us to escape a disaster we didn’t know existed. But the truth is, the best way to avoid hidden pitfalls is to prepare well. Hope for the best, but prepare for the worst is an old saying for a very good reason. And without a decent and well organised factory audit you will not have the required visibility to prepare for anything. And once you’re prepared, those little moments of magic – the shoots of growth that turn revenue streams into rivers of success – will start to flow.

A factory audit can also help with a wide range of follow-up activities: supplier training and development will be focused on areas of need, which will help ensure your workforce is kept motivated, keen and at the cutting edge; it will also help target technological development to the specific areas you’ll need to help your business grow; and it can offer corrective actions to make sure your business’s needs are not being missed in the cut and thrust of the modern marketplace. 

In short: it is the only way you can be sure that the factory you're working with is keeping your needs front and center in their planning.

Remember, a good factory audit isn’t just about monitoring what's happening in your factory. It is about all the benefits that can come from that… and avoiding the risks that come without it. 

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Importance of Factory Audit in China

Sometimes you ask whether you can afford to do something, and sometimes you should ask whether you can afford not to.

Without a clear view of the obstacles and opportunities before you, making key decisions can be difficult at best, and, at worst, it can risk the reputation of your company. This is why business leaders all over the world do everything in their power to make sure that they check and double check the landscape that lies ahead of them: the pathway to success is beset by pitfalls, potholes and hidden traps, and a wise leader knows the importance of plotting their route from a place of confidence.

Understanding what you are working with is the key to success, and, in business, this means knowing your company and its supply lines. A factory audit, and a factory audit checklist, is the best way to get a clear line of sight over the production lines that you will be working with. It is the only way to get visibility over the production lines that are creating the products your reputation is being built upon.

It can often seem like great companies have everything working in their favor, which can be a frustrating and isolating experience for any business leader. How did they know when to take that crucial step of upscaling their production? How did they seem to incorporate that new technology so seamlessly, embracing the new world as though they knew it already? How is it that their sales continue to grow, year on year, seemingly without slowing? And how is it that they avoid or seem to foresee issues that no-one else did?

The fact is that great decisions come from having a clear vision, and this is only possible with a thorough factory audit that gives you an effective, well organised understanding of what you’re working with. 

A factory audit will link your company together, ensuring it works as one, efficient unit; a factory audit will ensure that you are mitigating risks and managing expectations; and a factory audit will help you and your company understand what it is working with and how it can plan for the future.

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