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?