Factory Audit

How to Conduct a Factory Audit or Supplier Audit in Asia?

Factory / Supplier Audit in China & Asia

A factory audit – also called a supplier audit or manufacturing audit – is the best way to receive a full picture of your supplier’s business and policies, and to get all the information you need to take corrective action, if necessary.

As markets become more competitive, retailers, importers, and buyers need a healthy vendor pool and a reliable supply chain. But how do you select the right vendor? How do you monitor the ongoing performance of your current supplier? How do you work efficiently with your Asian supplier to ensure better quality day after day? A factory audit is the tool that answers these questions – both before you place your first order and throughout an ongoing relationship.

What Is a Factory Audit & Supplier Audit?

A supplier audit gives you an exact understanding of your supplier’s capabilities, quality control system, management structure, and operating procedures – so you can select a qualified supplier with confidence.

Supplier audits cover a wide range of practices and are often customized to meet a client’s specific requirements. The scope varies by industry: from textiles and household products to electrical products, the audit process is adjusted accordingly.

A factory audit specifically checks a supplier’s compliance with industry norms, including health, safety, and correct manufacturing processes. It ensures that the selected factory has the resources required to fulfill the order and that products are manufactured under acceptable conditions. This due diligence should be a systematic part of any importer’s quality assurance program.

Benefits of Factory Audits

Quality Assurance: Aligning with internationally recognized standards, such as ISO 9001, ensures that suppliers adhere to best practices in quality management. A factory audit helps identify gaps in process control, product design, and customer satisfaction, enabling you to make informed decisions and drive continuous improvement.

Supply Chain Transparency: Factory audits provide insight into supplier performance, revealing potential weaknesses in production, labor practices, and environmental management. This transparency helps you make better sourcing decisions and mitigate risk, improving overall supply chain visibility and fostering sustainable, ethical supply chains.

Compliance with Regulations: Factory audits help you ensure compliance with national and international regulations, including labor laws, environmental standards, and industry-specific requirements. Product compliance issues can lead to significant fines, legal consequences, and reputational damage.

Cost Optimization: A factory audit helps identify inefficiencies and areas for improvement, contributing to cost optimization. Implementing corrective actions can reduce waste, increase productivity, and improve resource allocation – resulting in long-term cost savings.

Enhancing Business Relationships: Factory audits facilitate open communication and mutual understanding between buyers and suppliers. Demonstrating a commitment to quality and ethical practices fosters trust and promotes long-lasting business relationships, benefiting both parties.

Types of Factory Audits Service

When you’re assessing new or under-performing suppliers, different types of audit services apply depending on what you need to verify. Factory audits should generally be performed once you’ve shortlisted several potential vendors. An AQI auditor attends the factory on your behalf and provides a detailed audit report with photos documenting the actual size, capacity, manufacturing conditions, and working conditions – so you can clearly assess the quality level of a potential supplier. Supplier audit checklists are fully customizable; you can start by choosing one of the services below:

Tele-Investigation
Inspection (TI)

Simple Factory Audit
(SFA, Supplier Qualification)

Extensive Factory
Audit (EFA)

Social Audit
(SA 8000)

Where Are The Factory Audits Performed?

Factory audits are conducted at the manufacturer’s actual production premises – not at a sales office or trading company’s showroom. This distinction matters: many buyers deal primarily with a supplier’s sales team or a trading company representative, and it’s easy to assume that office reflects the manufacturing reality. An on-site factory audit verifies what’s actually happening on the production floor, including whether the “manufacturer” you’re speaking with is the real factory or a middleman subcontracting the work to a third party you’ve never verified.

For suppliers operating across multiple sites – a headquarters office, a satellite factory, or subcontracted production lines – AQI Service can scope the audit to cover the specific site(s) relevant to your order, and flag any undisclosed subcontracting arrangements found during the visit.

When is a suitable time to conduct a Factory Audit?

The best time to conduct a factory audit is before you place your first order with a new supplier – ideally after you’ve shortlisted two or three candidates, but before you commit budget or tooling. For existing suppliers, a periodic re-audit (annually is a common cadence, more frequently after a quality incident, a change in ownership, or a significant increase in order volume) helps confirm that the capabilities and quality systems that impressed you initially haven’t eroded.

When you are planning to start a new cooperation with either a new or existing supplier, AQI Service’s Factory Audit can help you complete a thorough, up-to-date check on the factory’s actual capabilities.

What criteria are covered in a Factory Audit?

There are two primary supplier audit services: Simple Factory Audit (SFA) and Extensive Factory Audit (EFA).

The SFA is typically adequate for importers who want a broad overview of their supplier’s facility. It offers insight into general supplier information, necessary licenses, employee relations, organizational structure, and basic facilities and production equipment.

The EFA offers a more thorough review. It includes all the checks in an SFA, plus a depth check of the factory’s quality control system — the quality audit component described above.

Services	General Organization	Process Overview	Quality System Audit	Social Compliance Audit	Compliance with Law	Personal Safety & Work Environment Overview	Factory & Licenses Pictures
Simple Factory Audit (SFA)			Brief Overview
Extensive Factory Audit (EFA)
Social Compliance Audit(SCA)

Factory Audit Services/Supplier Audit Checklist.

The Supplier Audit Checklist based on below basic checking points or your special requirements:

Company Profile and Legal documents
Organization Structure
Housekeeping and Cleanliness condition
Machinery conditions and Maintenance
Facilities & machinery
Production Process
Production Capacity
Quality Assurance System
Design Control
Purchasing Control
Supplier Management
Incoming Inspection
Production Control
Control of Measuring & Testing equipment
Employee Training
Environmental, Health and Safety
Social Environment Responsibility
Special Requirements from Client

Factory Audit Services/Supplier Audit Checklist.

Is a factory audit the same as a quality audit?

Not exactly. “Factory audit” and “supplier audit” refer to the overall on-site evaluation – covering capacity, compliance, documentation, and quality systems together. “Quality audit” more narrowly describes the review of a factory’s quality management system specifically, which is one component of what we cover in an EFA. If your primary concern is a supplier’s quality system, request an EFA rather than a SFA.

How long does an audit take?

Most Simple Factory Audits and Extensive Factory Audits are completed within one man-day (approximately 8 hours on-site). Larger facilities or audits covering multiple product lines may require additional time, which we’ll confirm at booking.

How often should quality audits be conducted?

For new suppliers, an audit before the first order is standard practice. For ongoing suppliers, an annual re-audit is a common baseline, with more frequent audits recommended after a quality failure, a change in factory ownership or management, or a significant increase in order volume.

What’s the difference between a Simple Factory Audit and an Extensive Factory Audit?

The SFA covers general organization, licenses, and basic facility checks – a broad overview suited to early-stage supplier screening. The EFA includes everything in the SFA plus a full quality system audit, making it the better choice when you need confidence in a supplier’s quality management practices, not just their legitimacy and capacity.

Can I combine a factory audit with a social or environmental audit?

Yes. Many importers combine a Factory Audit with a Social Audit or Environmental Audit in a single visit to reduce cost and scheduling overhead, particularly when working with retailers or brands that require both compliance streams. Contact us to scope a combined audit for your supplier.

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Factory Audit

Factory / Supplier Audit in China & Asia

What Is a Factory Audit & Supplier Audit?

Benefits of Factory Audits