Factory Inspections & Audits in China: A Complete Guide

Found a supplier online but not sure if they’re everything they claim to be? Factory inspections, which can easily be booked online, can quickly put boots on the ground and verify what’s actually going on behind the factory gates.

In this article, you will learn everything importers and Amazon sellers should know about factory inspections:

• What is a factory inspection?
• What is not covered in a factory inspection?
• How can a factory inspection or audit help my business?
• At what stage should we book a factory audit?
• How much does a factory audit cost?
• Can we visit the factory ourselves?
• How long in advance do we need to book the inspection?
• What is the difference between a quality inspection and a factory inspection?
• Should we always book a factory inspection before deciding on a supplier?

Bonus Content

• List of Factory Audit Companies
• Factory Inspection Sample Report (PDF)

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• 1. Product design and material selection
• 2. Finding suppliers in Asia
• 3. Product samples and payments
• 4. Quality control, lab testing & shipping

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What is a factory inspection?

A factory inspection, as the name implies, take places in a manufacturing facility to assess its internal quality management procedures and understand its production capabilities. Normally, the factory is scored from 1 to 100, with 1 being the lowest score and 100 the highest.

A supplier with a higher score is less likely to have severe quality issues. That is, of course, not a guarantee, but at least better than guessing.

Essentially, a factory inspection is meant to answer these questions.

• Is this factory specialized in making the right type of products?
• Do they have acceptable quality control procedures?
• What types of machines do they have?

In addition, a factory inspection report may also include this information:

• Major customers
• Total employees
• Number of quality staff
• Operating time
• Shifts
• Peak production months
• Main products
• Subcontractors
• Production process
• List of machines

Factory inspections tend to follow this process:

• Incoming materials warehouse inspection
• Assembly lines inspection
• Internal quality control station inspection
• Product packing inspection
• Defective units storage and repair inspection
• Finished goods warehouse inspection

What is not covered in a factory inspection?

Unlike a quality control, a factory inspection doesn’t assess product quality, as it generally takes place before a buyer places an order with the factory. Hence, there are no products to inspect.

Further, factory inspections typically don’t take social compliance and environmental practices into consideration, as the audit focuses entirely on the quality management processes and production capabilities.

That said, there are other types of factory audits that do take both environmental standards and working conditions into consideration.

How can a factory inspection or audit help my business?

A factory inspection is meant to assess a supplier before you commit to buying product samples or placing a larger order. As such, the factory inspection can help you filter out ‘bad suppliers’ or help you select one with higher standards.

At what stage should we book a factory audit?

You should book the factory audit before you order product samples or place an order. However, I recommend that you should wait until you have contacted the supplier to request a quotation.

How much does a factory audit cost?

A factory inspection normally costs around $300. This price is based on a one-day inspection, which is sufficient for most factories. But, keep in mind that an inspector can only visit one factory per day. Hence, you have to pay (around) $300 per supplier you want to audit.

Can we visit the factory ourselves?

Yes, you can visit the factory on your own, something that I strongly recommend that you do at some point.

That said, evaluating a factory takes a strict protocol in the hands of an experienced professional. I’ve visited hundreds of factories in Asia, but struggle to confidently score a supplier in a precise manner.

As a buyer, your factory visit should be for the following reasons:

• Confirm materials, colors and other product details
• Confirm order terms
• Negotiate prices

But, strict factory evaluations are best left in the hands of professionals.

How long in advance do we need to book the inspection?

I recommend that you book the factory inspection at least a week in advance. Further, the factory inspection should not come as a surprise to the supplier.

What is the difference between a quality inspection and a factory inspection?

A factory inspection is focused on evaluating the suppliers internal quality processes and production capabilities. But, there are no products involved.

A quality inspection, on the other hand, doesn’t evaluate the factory itself – but only focuses on the quality of the products.

Should we always book a factory inspection before deciding on a supplier?

While I always argue that pre-shipment quality inspection is mandatory, no matter how long you’ve worked with the supplier – I don’t consider factory inspections are nearly as critical.

The reason being that there are other ways to assess a supplier’s capabilities:

• ISO 9001 certification
• Product certification
• Existing factory audit reports
• Registered capital

Further, the cost of one factory audit multiplied on 10 suppliers, which is a common number at a supplier sourcing stage, is quite significant for a small business. Meanwhile, a quality inspection generally only involves one single supplier.

List of Factory Audit Companies

Below follows an overview of companies offering factory inspections in China and other Asian countries:

• Sofeast.com
• InTouch Manufacturing Services
• QIMA.com
• Bureau Veritas
• Asia Quality Focus
• V-Trust
• SGS
• Intertek

Factory Inspection Sample Report