Factory audit versus product inspection

This article describes common industry practice, not official rules.

A factory audit and a product inspection look at different things. A factory audit looks at the supplier: whether the factory exists as described, what licences it can show, what lines and equipment are on the floor, how quality records are kept, and how much it says it can produce. A product inspection looks at one order's goods against your specification. Knowing which question each one answers tells you which to book and when.

What question each one answers

A factory audit answers: is this supplier the kind of supplier we described to ourselves, and can it do the work?

A product inspection answers: are the goods in this lot, as packed, the goods we ordered?

They are not substitutes. An audit describes the factory. An inspection describes a lot. A factory can pass an audit and still ship a lot with defects you did not order, because the lot may be different work, different operators, different materials, or a rush run that the documented process did not survive.

What a factory audit usually covers

In a common approach, the audit walks through several areas.

The factory's identity and paperwork come first. The auditor usually asks to see business licences and any registrations the factory claims to hold, and whether those are the ones actually on site.

Then the production side. Auditors commonly look at the lines, the equipment, the tooling, and whether the equipment is used regularly or only exists for show. They often ask where goods are made and where goods are simply packed or assembled.

Quality management records are usually part of the picture. The auditor may look at how incoming material is checked, how non-conforming goods are handled, how complaints are recorded, and whether the paperwork matches what happens on the floor.

Capacity is another common line of enquiry. Auditors usually ask what the factory can produce per shift, how many people work there, how much of the year the lines run, and what happens in a peak season.

Some buyers also include working-conditions audits. The scheme and its rules are named by the buyer or by the buyer's customers, not by the inspection or audit company. Whether a legal or certification requirement applies is for the regulator or an accredited laboratory to confirm.

What a product inspection usually covers

The inspection starts from your documents. Before anyone visits, the usual instruction includes the purchase order, the packing list, the bill of materials, and the specification with its tolerances.

On site, the inspector deals with the lot. Common checks include the workmanship, measurements against tolerance, function tests, on-site tests, and the markings and labelling on the carton and on the product.

Then sampling. The inspector takes a sample from the lot, and the findings are classified by defect level — critical, major, minor. Whether the lot passes usually follows an agreed level written into the inspection instruction.

There is usually an approved sample or golden sample to compare against, and a way to mark the passing or failing line in writing before the inspector arrives.

When buyers order each

A factory audit is commonly booked before ordering, when you are still deciding whether to place the order at all. It is also booked periodically with an existing supplier, or before a supplier moves into a higher-risk category.

A product inspection is booked against a specific order, after production starts and before the goods leave. A pre-production inspection checks materials and early work. A during production inspection checks the line while it runs. A pre-shipment inspection, also called a final random inspection, checks the packed lot. A container loading check looks at the container as it is loaded.

So the usual order is: audit the supplier first, then inspect the goods as they are made.

Why an audit does not replace an inspection

An audit is a snapshot of a factory's own systems. It says the process exists and, on the day, appeared to be followed. It says nothing about the lot in your warehouse-bound container.

Goods can go wrong in ways an audit cannot catch: a wrong component fitted on one line, a mould or material batch that behaved differently, a subcontracted step the factory no longer tracks the same way, or an inspection of the goods that was skipped under time pressure. Inspection defects come from the work in front of the inspector, not from the paperwork describing the work.

The same goes the other way. A clean product inspection does not tell you the factory will still be there next season, that its licences are current, or that its capacity is real. It only tells you about that lot.

Practical division

The clean split usually looks like this.

Question	What to book
Is this supplier as described, and can it make the goods?	Factory audit
Is this lot as ordered and packed?	Product inspection
Are the materials and early work right?	Pre-production inspection
Is the line working correctly now?	During production inspection
Can the lot ship?	Pre-shipment inspection
Is the container loaded as agreed?	Container loading check

If an inspection fails, a re-inspection after sorting is a common next step.

What to agree in writing

Both jobs depend on a written brief. For an audit, agree the scope, the areas to be covered, the documents you expect to see, and the reporting language. For an inspection, agree the standard, the defect classifications and the agreed defect level, the sampling plan, the on-site tests, and who pays when a re-inspection is needed.

Costs are usually quoted in writing by the inspection company, as agreed in your contract.

If you are still choosing, /library/inspection-types-compared/ sets the inspection types side by side. /library/what-to-agree-before-a-pre-shipment-inspection/ covers the brief, and /library/how-to-read-an-inspection-report/ covers the report you get back. The inspection checklist generator on this site helps you build the instruction list before the visit.

FAQ

Do I need both?

In many cases, yes. The audit covers the supplier and the product inspection covers the order, and each answers a question the other does not. If a supplier is new, an audit before ordering is a common approach; after that, periodic inspections of each order are what check the goods.

Can a factory inspection replace a factory audit?

No. An inspection finds defects in a lot. It does not look at licences, quality records, capacity, or working conditions. Those belong to the audit.

Does a good audit mean I can skip inspection?

No. An audit confirms systems. It does not confirm that this lot was made to those systems. Skipping inspection means accepting whatever arrives.

Can I run an audit and an inspection at the same time?

They can be combined in some cases, since the auditor and the inspector may be on site together. It is usually better to run them separately if you want an audit of the supplier without the pressure of a shipping deadline in the room.

Who pays for a re-inspection?

That is a commercial question. Write it into the inspection instruction and the contract before the inspection, together with the cost basis.

What should be in the factory audit brief?

Common items are the scope, the areas to cover, the documents you expect to see on site, the reporting language, and any working-conditions element the buyer or your customer has named.