K. Nattaya Srisuwan
Head of Verification Services
Former senior auditor with an international inspection group; has led more than 3,000 supplier, factory, and product verification engagements.
Short answer
A factory audit is a structured on-site assessment of a factory's quality management systems, production processes, and social compliance against a standard such as ISO 9001, BSCI, or SMETA. Auditors review documentation, observe production, interview workers, and classify findings as critical, major, or minor. The result is a scored report with an approve/conditional/reject recommendation and a corrective action plan.
Audits Assess Systems. Inspections Assess Goods.
The most common sourcing error is substituting one for the other. A product inspection tells you whether this order's goods conform. A factory audit tells you whether the systems producing them are capable of consistent conformance — order after order, shift after shift. New supplier programs need both: the audit before commitment, inspections on every order after.
| Dimension | Factory Audit | Product Inspection |
|---|---|---|
| Subject | Management systems and processes | Finished goods against specification |
| Frequency | At onboarding, then periodic | Per order / per production stage |
| Standards | ISO 9001, BSCI, SMETA, buyer scorecard | AQL sampling, product specifications |
| Output | Scored findings report with CAPA | Pass/fail report with defect evidence |
The Three Dominant Frameworks
Most audits run against one of three frameworks, or a buyer scorecard combining elements of each:
- ISO 9001 — quality management systems: documentation control, process planning, calibration, non-conformance handling, corrective action, management review
- BSCI — social compliance: working hours, wages, child and forced labor prohibitions, health and safety, freedom of association, environmental management
- SMETA (Sedex) — four-pillar audit covering labor standards, health and safety, environment, and business ethics; the most widely shared audit format in retail supply chains
- Custom scorecards — buyer-specific requirements, common with established brands whose standards exceed published frameworks
Framework choice depends on your customers' requirements and your risk priorities. Brand owners selling into regulated retail channels typically need ISO 9001 plus a social audit; industrial buyers often run custom scorecards weighted heavily on process capability.
Inside the On-Site Audit
- 1Opening meeting: scope confirmed, management introductions, facility overview
- 2Facility tour: production flow observed end-to-end — incoming materials through finished goods storage
- 3Documentation review: quality manuals, control plans, calibration records, training files, non-conformance logs
- 4Worker interviews: conducted privately for social audits — wages, hours, safety, grievance channels
- 5Records cross-check: production records reconciled against capacity claims and order history
- 6Closing meeting: preliminary findings presented, factual corrections received
Findings, Scoring, and Decisions
| Classification | Meaning | Typical Consequence |
|---|---|---|
| Critical | System failure or compliance violation — e.g., no quality system, forced labor indicators, falsified records | Reject until resolved; blocks order placement |
| Major | Significant gap requiring corrective action — e.g., uncalibrated test equipment, missing process controls | Approve with conditions; CAPA with verification |
| Minor | Improvement opportunity — e.g., incomplete documentation, minor housekeeping | Noted for development; does not block approval |
The scored report ends with a recommendation — approve, approve with conditions, or reject — and a corrective action plan assigning each finding an owner, deadline, and verification method. The CAPA follow-up is where programs succeed or fail: findings without verified closure are just observations.
Turning Audit Results into Sourcing Decisions
- Weight critical findings absolutely — one critical finding blocks approval regardless of overall score
- Compare scores across your supplier base to identify systemic capability gaps
- Require CAPA verification (document review or follow-up visit) before scaling order volume
- Re-audit on a risk-based cycle: annually for strategic suppliers, after incidents for all
- Feed audit results into inspection intensity — weaker systems get tighter AQL and more inspection stages
Key takeaways
- Audits assess systems; inspections assess goods — new suppliers need both, at different points.
- ISO 9001 covers quality systems, BSCI and SMETA cover social compliance; buyer scorecards combine elements.
- Findings classify as critical (blocks approval), major (conditional with CAPA), or minor (development).
- The scored recommendation — approve/conditional/reject — is the decision input, not the score alone.
- CAPA verification closes the loop; unaudited follow-through is the program's failure point.
Frequently asked questions
One to two days on-site for a standard facility, depending on size and framework. Social audits add worker interview time. Reports deliver within five business days, with findings summaries in 48 hours.
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