Experience Sharing of Factory Audit

A significant portion of our business operations involves on-site observation, whether it is supplier review, visiting customers or peer factories, evaluating acquisition targets, or internal management of enterprises. The time constraints of on-site observation often require relevant personnel to possess a wealth of experience and skills to evaluate and judge the site in a short period of time.

1. The importance of factory on-site audits

On-site observation is the foundation for continuous improvement. As customers, we should visit the supplier's facrory to gain insight into their cost structure, production efficiency, and quality control. Enterprise operation is a complex system, with all links interdependent and influencing each other. For production-oriented enterprises, any detail on site can reveal subtle nuances. Any significant issue can be traced back to the site. Even with limited time, by focusing on key points, we can gain comprehensive understanding of factory operations.

2. On-site atmosphere

On-site observations allow one to gain insight into the authenticity of employees' mental state and facilitate initial conversations with on-site workers. It is also possible to gain insight into the workers' attitudes through observation of their facial expressions and body language. During a tour of the facility, it is important to note whether there is an imbalance between busy and idle work. The presence of this phenomenon indicates a lack of lean management and low personnel utilisation in the factory, which will result in reduced overall work efficiency and higher product costs. It is also important to consider whether the lighting, air circulation, odours, noise levels and cleanliness of the workshop are satisfactory. These factors can directly affect the mood of workers, which in turn can impact production efficiency and product quality.

3. Space Utilisation and Layout

It is not always necessary for suppliers to adopt very large production spaces. The key consideration is the utilisation of space. Only with high space utilisation can we achieve high levels of circulation efficiency. As a general rule, production materials used on the same day should be stored along the production line, rather than separated into several inventory areas. It is advisable to place tools and fixtures as close to the machines as possible. It is essential that the factory layout ensures a smooth product flow and avoids the use of partitions wherever possible. If you observe long material handling distances, repeated handling routes, or multiple handling times in a factory, it is an indication that the layout is unreasonable, that space utilisation is not optimal, and that the production line is not gathering as much as it could.

4. On-site standardisation

Standards represent the optimal state and unified execution reference point. Without standards, there can be no execution. In particular, this encompasses homework and quality standards, 5S and safety standards, operation and maintenance standards, process and rework standards, safety stock standards, and so forth.

Many factories have SOPs (standard operating procedures) on site, which provide an opportunity to identify any missing items, assess the ease of implementation, and identify potential breakpoints.

By monitoring the specific operational processes of different employees within the same process, it is possible to identify any discrepancies, including variations in the sequence of actions, operational intensity and the presence of omissions. If there are discrepancies, it suggests that employees have not received adequate training in standardised operational procedures, which could lead to an increased risk of product quality issues.

5. Quality control

Effective quality control necessitates rigorous oversight of the traceability of work in progress and semi-finished products. It is essential that factories utilise cards, documents or digital management systems to indicate the source of products, personnel involved in processing, equipment used and other pertinent information. Any issues identified in the process can be swiftly traced back to their source, facilitating the implementation of improvements.

Furthermore, the level of protection provided by workers to components can be used to assess the precision of quality management in the factory. Additionally, the quantity and proportion of defective products can be used as an indicator of the quality of a factory's quality control process.

6. Visual management

Visual management is a fundamental component of numerous advanced management techniques, providing a visual representation of a production enterprise's management level. It is common practice in well-managed factories to use visual tools. This encompasses workplace organisation and standardisation, the visualisation of outcome indicators, the visualisation of standard operations, the visualisation of control indicators, the visualisation of automatic error prevention and correction, alarm mechanisms, and more. During the visit, it is important to look for various visual tools. It is not uncommon for suppliers to implement 5S management only at the surface level. During the actual visit, it is important to observe not only the various visual lines and signs, but also to pay close attention to potential safety hazards, employee health protection, and other relevant aspects.

7. Tool and equipment status

In a well-managed factory, equipment is kept clean and well-maintained, with relevant information clearly visible and updated in real time. The equipment calibration form is also fully recorded. The management and maintenance of equipment have formed a virtuous system. During visits, it is also advisable to engage in more informal dialogue with frontline workers and technicians, as they possess the most comprehensive understanding of the advantages and disadvantages of new equipment and the actual needs of the production line. In many factories, the procurement of equipment is decided by senior management or equipment departments, with minimal consultation with frontline personnel. This often results in a number of subsequent problems.

8. Summary

This article shares some of my preliminary experiences on factory inspections. The issues that require our attention when inspecting factories supplied by different vendors are, in fact, identical. In conclusion, there are three key points to consider:

(1) It is vital to avoid preconceptions and to ensure that any conclusions reached are based on evidence, rather than bias.

(2) It is vital to ensure that the information, statements and actions observed on site are consistent. To gain a deeper understanding, it is necessary to ask questions.

(3) It is beneficial to consider both the macro and micro perspectives. This entails focusing on specific details in a concise manner while also considering the broader picture.