In this age of mass production, it’s no surprise that factories are sprouting up all over the globe at the speed of light. In fact, in 2019 alone, more than 18 million people found work in factory jobs in the US alone! That’s a lot of potential clients, but it also means that there are plenty of opportunities for your small business to go into partnership with a factory and reap the benefits. If you’re thinking about forming a partnership with a factory, here are 6 ways a factory audit is important for your small business.
1) Identify Potential Trouble Spots
The major benefit of outsourcing to China isn’t just cost but speed. The sooner you can get your idea out into circulation, the better, and getting to market quickly helps establish you as an expert in your industry. So if you want to save money without sacrificing quality or performance, take advantage of offshore factory audits to identify potential trouble spots in your supply chain so you can address them ahead of time. And don’t forget: Suppliers are only one part of your supply chain—factor in production partners, distributors and retailers when thinking about how things will flow through your network.
2) Confirm Compliance
A large portion of small businesses are in violation of rules and regulations set forth by government entities. Simply put, you don’t want to become an example if you can help it. In fact, non-compliance can lead to fines or legal action from state and federal agencies that will cost time and money—both things your business doesn’t have enough of as it is. However, government officials won’t come knocking on your door unless they know about potential violations so be proactive and take an active role in making sure you’re compliant with applicable laws. For instance, if you do business internationally then you should know that there are hundreds of treaties that impact small businesses.
3) Confirm Quality Control
There are few things worse than going to market with a product that doesn’t work as expected, causing you to lose credibility and potentially lose customers. In order to avoid these pitfalls, it’s important to have control of your entire supply chain. You can confirm third party quality inspection service through an on-site factory audit from time to time. This way, you can confirm what materials have been used and how your products have been manufactured. With that information in hand, you can better anticipate demand and ensure that your products meet or exceed customer expectations.
4) Run Production Tests
Once you have your idea, try to run some production tests on samples of your product. If possible, get feedback from your target customers. Producing small runs on different platforms can give you valuable insight into how easily each component of your design can be produced at scale. Ask yourself: do I really need so many colors? Do I really need so many sizes? These are questions that will answer themselves once you’ve done enough runs to understand what type of cost structures come with different types of products. Take advantage of affordable labor by outsourcing non-core processes. Just remember to bring quality control home! This isn’t about undercutting competitors–it’s about finding ways to put money back in your pocket while keeping costs low enough that customers will want to buy from you again and again.
5) Inspect Tools and Equipment
A factory audit may reveal that you need to improve your tools and equipment. If they’re broken or obsolete, they can bring your production process to a halt. Tools and equipment are an investment, so if you have outgrown them, it might be time to upgrade. But before you do so, consider whether they are an essential part of your business operations or if their time has come and gone. In many cases, machines can be modified or customized to extend their lifespan with minimal expense on your part.
6) Confirm Safety Procedures
In some instances, it may be necessary to carry out a factory audit. In these cases, you’ll need to confirm that their safety procedures are being followed correctly. If there have been any issues with accidents or complaints from workers, an audit could identify them so they can be corrected. There are plenty of different reasons you may decide on a factory audit—so it’s always best to discuss your situation with someone who has done one before and ask questions about what works well and what would have been better left out. This way, you’ll know everything that should be included in your own plan.
Factory audits are important. They allow you to keep tabs on your factories and suppliers, ensuring that your products are manufactured in ways that are ethical and environmentally friendly. After all, being green means being responsible!
By keeping an eye on things, you can be sure you’re doing business with factories that provide safe working conditions for their employees. An audit will also help you to negotiate better deals with your suppliers.
You’ll have knowledge of how to talk them down on prices while maintaining high-quality standards for production. There’s no time like today to improve both your company’s public image and its bottom line—by conducting regular factory audits.