Factory audits and product inspections are core components of supply chain quality management and compliance control. They are mainly divided into two major modules: factory audit and product inspection. Widely adopted in foreign trade, OEM manufacturing, brand procurement and other scenarios, they aim to ensure suppliers meet purchasers’ requirements in terms of quality, compliance, social accountability and other aspects.

I. Factory Audit: Comprehensive Assessment of Factory Capabilities

A factory audit is an all-round evaluation targeting manufacturing enterprises, focusing on corporate compliance, management systems and sustainable operation capacity. It generally falls into three categories:

1. Social Compliance Audit This is the most fundamental and frequent type of factory audit. It focuses on verifying labor rights and interests, working conditions and ethical standards to satisfy brand compliance requirements.

• Audit content: employee wages and benefits, working hour regulations (compliance with local labor laws), prohibitions on child labor / forced labor, occupational health & safety (fire-fighting facilities, workshop ventilation, protective equipment), dormitory and canteen conditions, etc.

• Applicable scenarios: procurement for European and American brands, cross-border e-commerce platform entry (e.g. Amazon, Walmart).

2. Quality System Audit An audit of the factory’s quality management capabilities, ensuring the factory can consistently manufacture qualified products.

• Audit content: quality management system certifications (e.g. ISO9001), Incoming Quality Control (IQC), In-Process Quality Control (IPQC), Final Quality Control (FQC), non-conforming product handling procedures, laboratory testing capabilities, etc.

• Applicable scenarios: procurement in mid-to-high-end manufacturing, supply chains for precision products in automotive / electronics industries.

3. C-TPAT / Security Audit Mostly required for export shipments to the United States. Its core purpose is to mitigate security risks within the supply chain.

• Audit content: site security measures, goods inbound/outbound registration, personnel background screening, container seal management, anti-terrorism emergency response plans, etc.

• Core standard: Customs-Trade Partnership Against Terrorism (C-TPAT) certification.

II. Product Inspection: Physical Quality Check of Goods

Product inspection refers to sampling checks on ordered finished products. It directly determines whether goods comply with purchasing standards and prevents defective items from entering the market. The core procedures are as follows:

1. Sampling Standard The industry widely adopts the AQL (Acceptable Quality Level) sampling standard. The sampling ratio and acceptance criteria are defined based on order quantity and product grade (e.g. AQL 2.5 for appearance defects, AQL 0.65 for functional defects).

2. Key Inspection Stages

• Pre-Production Inspection (PSI): Confirm raw materials and first articles before mass production to avoid deviations in bulk manufacturing.

• During-Production Inspection (DPI): Sampling inspection amid production to detect process issues promptly and reduce rework costs.

• Final Random Inspection (FRI): Final check prior to finished goods packing, a critical control point before shipment. It verifies product appearance, functionality, dimensions, packaging, labeling and other items against order specifications.

3. Inspection Result Verdict

• Pass: The number of defects is below the AQL limit. An passed inspection report is issued and shipment is approved.

• Fail: Defects exceed the standard. A corrective action notice will be issued, requiring the factory to rework and arrange a re-inspection.