Importance of Factory Audit for the Rapid Business Growth
A factory is the prime site of production for a commercial company. An importer needs to be sure about the authenticity and reliability of a factory before buying supplies from that company. Only a detailed factory audit can gather all essential information, including the ownership of that factory, its dimensions, management authority, financial and legal condition of the factory, and its capacity of production. This audit also reveals the qualities of raw materials and machines used in the factory, which can be assessed only after a thorough review of all stuff.
Different types of factory audit for commercial companies
Manufacturing audit – Expert auditors check whether the quality of manufactured materials meet that company’s given specifications and these materials can cast any positive effect on cost disruptions. Thus, this kind of factory audit is beneficial for checking if the products manufactured by a supplier can meet the buyer’s requirements. All ethical and operational risks of the factory are also evaluated and decreased by this audit. It compares the product policies of the supplier and the buyer. This audit checks the efficiency of factory management.
Structural audit – This audit is meant to check the business premises of a supplier and see if that commercial building is safe for clients. The structural integrity of the building, its safety arrangement from fire, and the present condition are evaluated minutely. Factory owners can gain a better brand image after a positive audit certificate. Moreover, they can be sure of the safety of their factory workers, as this factory audit safeguards the health of employees and prevents accidents. It also prevents the disruption in the supply chain, by ensuring the continuity of safe production in the factory.
Environmental audit – This kind of audit is meant to evaluate the impact of factory supplies on the surrounding environment. It checks whether all the local laws and international regulations regarding the protection of the environment are observed in that factory. The result of this factory audit with all the lab testing reports states the environmental competence of the concerned factory. So the factory owner gets the chance to improve the environmental condition of that producing unit.
Ethical audit – This audit is meant to check the social responsibility maintained in a factory. It’s the social liability of a company to provide a healthy work environment in its factory, with safe labor practices and timely payments to laborers. The criteria of this factory audit are also designed for the best interests of clients, as per the international guidelines on this issue. Hence, the factory owner should ensure that all kinds of human rights are provided to workers, along with a healthy working condition. The auditor checks if the compliance as per the statutory control is maintained in the factory. Thus, a positive report of this audit improves the company image among consumers and helps in developing the supplier-client relationships.
The food industries need to undergo a food supplier audit, which determines the quality of all food products supplied by manufacturers or suppliers. Custom-Trade Partnership Against Terrorism (C-TPAT) audit is also essential in many countries, mainly across the border areas.