Scoping a supplier audit checklist

This article describes common industry practice, not official rules.

A supplier audit checklist usually starts from the question the audit is meant to answer, not from a list copied from an earlier audit. Write that question down first. Then keep the checklist lines that help answer it and remove the rest.

Start from the question the audit answers

Buyers commonly ask a factory audit to answer some of these questions:

• Does the factory exist as described in the supplier file, and does the site match the company and address details?
• Can the factory make this product, with these components, at the volume ordered?
• Does the factory control quality from incoming material to packed goods?
• In some cases, the buyer or the buyer's customers also ask about working conditions or environmental practice.

A checklist line that does not feed an answer to one of these questions is a candidate for removal.

Areas a checklist can cover

A checklist can cover some or all of these areas:

• Company and site details: the legal name on documents, the address, the buildings and floors the auditor visits, and whether the site matches the supplier record.
• Production lines and equipment for this product: the lines used, the machines, the tooling, and whether the equipment fits the process the product needs.
• Incoming material control: how bought-in components are received, checked, stored, and traced to a production order.
• In-process and final checks: where checks happen on the line, what each check measures, and who signs off on the result.
• Measuring equipment: the gauges and instruments used, and how the factory checks that they still read correctly.
• Records: how inspection records, nonconformance logs, and batch traceability are kept and whether they can be pulled quickly on the day.
• Handling of defects: how defective units are sorted, reworked, or scrapped, and how corrective action is recorded.
• Subcontracting: which steps are done by other companies, and whether the factory keeps a current list of them.
• Capacity and planning: whether the production schedule and staffing can handle the order in the time agreed.
• Warehouse and packing: storage conditions, labelling, shipping marks, and whether packing follows the packing list.
• Social or environmental topics: these sometimes appear on a checklist. When they do, the buyer or the buyer's customers name the scheme and its rules, and the checklist follows that text.

Whether a legal or certification requirement applies is for the regulator or an accredited laboratory to confirm.

Fit the scope to the product and the order

The product and the order usually decide how deep each area goes.

• A product with few components usually needs a shorter incoming material section than an assembled product with many parts.
• A product with a function test, a fit requirement, or a tight dimensional tolerance usually adds measuring equipment and in-process checks to the scope.
• A new order with an unfamiliar factory usually calls for a wider scope than a repeat order from a factory the buyer already knows. The buyer's own view of risk still decides the final scope.
• A larger order puts more weight on capacity, subcontracting, and final checks.

Use the buyer's specification, bill of materials, technical drawing, and approved sample as the reference for the checklist. Lines that cannot be tied back to one of these documents are often hard to judge on the day.

What to leave out

Some items do not suit a factory visit, and it helps to drop them early.

• Items the auditor cannot see or check during a visit, such as the factory's full financial position.
• Lines that ask the same thing in different words.
• Topics already covered in a supplier file, unless the product, the site, or the order has changed.
• Product test results. A laboratory test is a separate activity. It measures properties under controlled conditions and produces a test report. The audit can check that the factory keeps its own records and handles samples properly, but the audit does not replace the test.

Agree the checklist with the audit company before the visit

A common approach is to send the draft checklist to the audit company and agree these points before the visit:

• Which lines the audit company can check on the day, and which need documents sent in advance.
• How records and in-process checks will be sampled, as set in the checklist or the contract.
• Which documents the factory should have ready, and when the factory is told about the visit.
• How findings will be written up, including the wording used for each finding type.

Keep the agreed checklist with the report so the buyer can see which lines were checked and how.

How findings are usually reported

Audit reports vary in wording, but findings are often sorted into a few groups.

• Observations: things seen during the visit that do not clearly break a checklist line but may matter later.
• Gaps: lines where the factory cannot show the control the checklist asks for.
• Findings against a specific checklist line, with the evidence seen on the day.

After a report, the factory usually responds with corrective action and supporting evidence. The buyer and the audit company then agree how to verify that action. This may be a document review, a further visit, or a re-inspection, depending on what was agreed.

A checklist that is short enough to use on the day and tied line by line to the questions above is usually easier to act on after the visit.