A Factory Inspection Checklist

Factory Inspection Checklist

Client sent this to me the other day because he liked it and I do too. The “this” is a factory inspection checklist compiled by Carson Block for the Doing Business in China for Dummies book. The list suggests that your on site factory due diligence consist of you taking into account the following:

  • Cleanliness. A sloppy workplace (including workers’ appearances) indicates a sloppy attitude, and most likely sloppy performance.
  • Organization. Be sure to take some time to understand the entire workflow. Does it make sense? Can you see any bottlenecks? If you do not understand something, ask questions. If you cannot ultimately understand why a factory’s workflow is a certain way, it may be a warning signal.
  • Machinery. Get thorough explanations of what the machines do, where they are from, and other detailed questions. Asking detailed questions about the machines will make you seem smarter (thus less gullible). Listening to the answers will in fact make you smarter. Once you have toured several factories, you can make comparisons.
  • Quality Control. The key here is the number and location of QC checkpoints. Figure out how the rejected parts are handled. If you cannot understand that, it is likely that the workers also cannot.
  • Employee Conditions. Happy workers make for productive workers. Be sure to see how the employees eat, sleep and live when they are not on the floor.
  • Location. The factory should be close to its suppliers – otherwise, there can be supply bottlenecks. It should also be close to a port from which it can ship. Finally, learn about whether there are utility quotas in the area that affect production – this is especially important for electricity.

This is a good, though really basic list.

What are your thoughts on it?

8 responses to “A Factory Inspection Checklist”

  1. Yeah.  What’s missing?  “Make sure the company that claims to own what you’re inspecting actually owns what you go out to inspect”, and 
    “If the production batch records are inconsistent with what you know the company is claiming to sell (lower amounts), look for a 2nd, crappier factory elsewhere in the neighborhood that actually subs the work”

  2. This is a good list. But the point is not to find the best factory — it is to find the factory that is the best choice for a given importer.
    Bigger factories tend to be better organized. But are they a good choice for the small buyer who needs personalized follow-up?
    Other examples of mismatches to avoid: peak production at the wrong time of the year; main export market very different from the buyer’s market; poor engineering capabilities when the buyer needs a long customized developments…

  3. For quality, there’s a lot more to it than the number and location of QC checkpoints. Training records, process documentation, corrective action procedures, etc. are all as important as test/inspection points.
    Also, a good thing to know is about their other customers? Are they selling into markets similar to yours? In other words, do they have experience with the types of quality, safety and documentation requirements which you expect to face when selling their production into your market. It might also be good to know if they are selling directly into these markets, or via a third-party trader. If they are primarily exporting through local traders, and you are one of their few direct export customers, you may find them unfamiliar with your requirements.
    Just a few thoughts.
    David

    • MANY WORKERS JUST HAVE LUNCH NAP AT WORK SHOP RIGHT ON FLOOR OR TABLE, ESPECIALLY IN SUMMER TIME, AND WHEN THE NAP TIME IS LIKE 1.5 HOUR INCLUDING LUNCH. LOL

  4. Generally agree it’s a good list.  But with one note about cleaniness, it can be somewhat a matter of cultural context in China.  See article in SmartChinaSourcing.com http://www.smartchinasourcing.com/cultural-considerations/are-chinese-factories-naturally-disorganized.html   And recommend watching this 4-min video on Quality Control which suggests visiting the factory several times during the production process, not just once onsite, and some other tips http://www.globalsources.com/ST/Videos/Project-Management-And-Quality-Control.htm?source=BuyerResPg.   For other checklists, and useful videos and articles for sourcing from China, you can check out Global Sources Online (www.globalsources.com) and Smart China Sourcing website (www.smartchinasourcing.com)

  5. The most important overlooked factor is knowing what the factory owner(s) was profession prior to starting this factory. Many people complain about poor quality coming out of China.  But what do you expect when a someone who was a peasant 5 years ago, opened a battery factory five years ago and have never worked with electronics his entire life.  I personally know factory owners producing products they have no prior experience.  The Chinese mindset is either 1) Why does my friend have a plastic mould factory and I don’t? I am going to open one too or 2) A friend told me I should open a book printing factory because people are getting rich out here in that business, eventhough I have been in the basket weaving industry my entire life. Many Chinese factories are conducting business based on trial, error and whatever is trendy at the moment.
    Also, knowing the supply chain chan help you obtain signficant savings. Find out what part of the production process is in-house and outsourced. I just returned from Guangzhou where I visited several factories manufacturing the same product. Only one factory came in 50% lower in price as they produced a signficant component in-house, where as the others outsourced this compoenent.  As far as I was concerned, the other factories are probably purchasing this component from the lower cost factory.  I never negotiate prices in China, because when you do you negotiate away quality.  Thus, knowing the supply chain process helped me to shave off 50% of the price, while keeping quality in tact.

  6. This is very nice blog and i appreciate the inspection checklist which must follows by different kind of product standards.

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