Supplier & Factory Sourcing
and Audit procedure.
and Audit procedure.
The Sourcing Co. aims to ensure the highest standards in its sourcing activities, supplier assessment's and factory audits. This document outlines the comprehensive procedures to be followed to maintain quality, compliance, and efficiency in our operations.
Procedure
1. Sourcing Process
1.1 Initial Research:
1.1.1. Market Analysis: Conduct a thorough analysis of the market to understand current trends, potential suppliers, and competitive pricing of product.
1.1.2. Requirement Identification: Clearly define the requirements including product specifications, quality standards, delivery timelines, and budget constraints.
1.1.3. Internal Consultation: Engage with relevant internal stakeholders to align on sourcing goals and criteria.
1.2 Supplier Identification:
1.2.1. Database Utilization: Use existing databases and networks to identify potential suppliers.
1.2.2. Industry Events: Attend trade shows, expos, and industry events to discover new suppliers.
1.2.3. Online Research: Utilize online platforms and industry directories to find additional supplier options.
1.3 Request for Information (RFI)
1.3.1. RFI Preparation: Develop a detailed RFI document that outlines The Sourcing Co.'s needs and expectations.
1.3.2. Distribution: Send the RFI to shortlisted suppliers.
1.3.3. Evaluation of Responses: Assess the responses based on criteria such as capability, experience, and compliance with requirements.
1.4. Request for Quotation (RFQ)
1.4.1 RFQ Document: Prepare an RFQ document that includes detailed product specifications, quantities, delivery schedules, and terms of business.
1.4.2. Supplier Briefing: Provide suppliers with a briefing to ensure clarity on the RFQ requirements.
1.4.3. Quotation Analysis: Compare the quotations based on cost, quality, delivery terms, and other critical factors.
1.5. Negotiation and Contracting
1.5.1. Negotiation: Enter negotiations with selected suppliers to agree on terms and conditions.
1.5.2. Contract Drafting: Draft a detailed contract covering all agreed terms, including pricing, delivery schedules, quality standards, and penalties for non-compliance.
1.5.3. Contract Review: Have the contract reviewed by legal and compliance teams before final approval.
1.5.4. Contract Signing: Finalize the agreement with the supplier and secure signatures from authorized representatives.
2. Appraising New Suppliers
2.1. Preliminary Assessment
2.1.1. Initial Contact: Establish initial communication to gauge interest and capability.
2.1.2. Questionnaire: Send a pre-assessment questionnaire to gather preliminary information about the supplier's capabilities and compliance.
2.2. Detailed Evaluation
2.2.1. Company Background Check: Conduct a background check on the supplier's financial stability, reputation, and history.
2.2.2. Capability Assessment: Evaluate the supplier's manufacturing capacity, technology, and workforce.
2.2.3. Quality Management: Review the supplier's quality management systems and certifications (e.g., ISO standards).
2.3 Sample Testing
2.3.1. Sample Request: Request product samples for testing and evaluation.
2.3.2. Quality Inspection: Conduct a thorough inspection of the samples to ensure they meet the required standards.
2.3.3. Feedback Loop: Provide feedback to the supplier and request improvements if necessary.
2.4. Supplier Approval
2.4.1. Evaluation Report: Compile an evaluation report summarizing the findings from the detailed evaluation and sample testing.
2.4.2. Internal Review: Conduct an internal review with relevant stakeholders to decide on supplier approval.
2.4.3. Approval Notification: Notify the supplier of their approval status and outline the next steps.
3. Factory Audit
3.1 Audit Preparation
3.1.1. Audit Plan: Develop a comprehensive audit plan including objectives, scope, criteria, and checklist.
3.1.2. Audit Team: Assemble a qualified audit team with relevant expertise.
3.1.3. Pre-audit Briefing: Conduct a briefing with the audit team to ensure everyone is aligned on the audit plan.
3.2 On-site Audit
3.2.1. Opening Meeting: Hold an opening meeting with the supplier's management to explain the audit process and objectives.
3.2.2. Facility Tour: Conduct a tour of the facility to observe operations and gather initial impressions.
3.2.3. Documentation Review: Review relevant documents such as quality records, production schedules, and compliance certificates.
3.2.4. Interviews: Interview key personnel to assess their knowledge, competence, and adherence to procedures.
3.2.5. Process Observation: Observe manufacturing processes to verify compliance with standards and identify any areas for improvement.
4. Audit Report
4.1.1. Findings Compilation: Compile the audit findings, including any non-conformances and areas of concern.
4.1.2. Scoring and Rating**: Score the supplier based on predefined criteria and rate their overall performance.
4.1.3. Report Writing: Write a detailed audit report and share it with the supplier and internal stakeholders.
5. Factory Audit Checklist and Questions
5.1. General Information
- What is the company's full name and address?
- Who is the main contact person and what are their contact details?
- How many years has the factory been in operation?
- What are the main products manufactured at this facility?
5.2. Legal and Regulatory Compliance
- Can you provide copies of the business license and any other relevant certifications?
- Are there any outstanding legal or regulatory issues concerning the factory?
- How does the factory ensure compliance with local and international labor laws?
5.3. Management Systems
- What quality management systems (e.g., ISO 9001) are in place?
- Can you provide evidence of certifications for these systems?
- How often are internal audits conducted, and what is the process for them?
5.4. Human Resources and Labor Practices
- How many employees work at the facility?
- What are the working hours and overtime policies?
- Are there procedures in place to ensure fair treatment and non-discrimination?
- What is the process for hiring and training employees?
5.5. Health and Safety
- What health and safety policies are implemented in the factory?
- Can you show records of safety training sessions conducted for employees?
- Are there emergency procedures and first aid stations available?
- What are the measures taken to ensure a safe working environment?
5.6. Production Capacity and Capability
- What is the factory's monthly production capacity?
- Can you provide a list of the main production equipment and their capacities?
- What is the lead time for production from order placement to shipment?
5.7. Quality Control
- What quality control processes are in place at various stages of production?
- How are defects identified and handled?
- Can you provide records of quality control inspections and their results?
5.8. Environmental Compliance
- How does the factory manage waste and emissions?
- Are there any certifications related to environmental management (e.g., ISO 14001)?
- What steps are taken to minimize the environmental impact of production?
5.9. Supply Chain Management
- How are raw materials sourced, and what criteria are used to select suppliers?
- What is the process for handling delays or issues with suppliers?
- Can you provide documentation of supplier evaluations?
5.10. Security
- What security measures are in place to protect the facility and its products?
- Are there systems for tracking and tracing products throughout the supply chain?
- How is data security handled, particularly regarding customer information?
6.1. Follow-up and Corrective Actions
6.1.1. Corrective Action Plan (CAP): Request the supplier to submit a CAP addressing the non-conformances identified.
6.1.2. Implementation Verification: Follow up to verify the implementation of corrective actions.
6.1.3. Re-audit: If necessary, schedule a re-audit to ensure compliance with the required standards.
7. Documentation and Record Keeping
7.1. Record Maintenance: Maintain comprehensive records of all sourcing, appraisal, and audit activities.
7.2. Access Control: Ensure that documents are stored securely and access is controlled.
7.3. Document Review: Regularly review and update documentation to reflect changes in processes and regulations.
8. Review and Continuous Improvement
8.1. Performance Monitoring: Continuously monitor supplier performance through regular reviews and audits.
8.2. Feedback Mechanism: Establish a feedback mechanism to gather input from internal stakeholders and suppliers.
8.3. Continuous Improvement: Implement improvements based on feedback, performance data, and audit findings to enhance the sourcing process.
This extensive procedure and documentation will help The Sourcing Co. maintain high standards in sourcing, appraising new suppliers, and conducting factory audits, ensuring quality and compliance throughout the supply chain.
1.1 Initial Research:
1.1.1. Market Analysis: Conduct a thorough analysis of the market to understand current trends, potential suppliers, and competitive pricing of product.
1.1.2. Requirement Identification: Clearly define the requirements including product specifications, quality standards, delivery timelines, and budget constraints.
1.1.3. Internal Consultation: Engage with relevant internal stakeholders to align on sourcing goals and criteria.
1.2 Supplier Identification:
1.2.1. Database Utilization: Use existing databases and networks to identify potential suppliers.
1.2.2. Industry Events: Attend trade shows, expos, and industry events to discover new suppliers.
1.2.3. Online Research: Utilize online platforms and industry directories to find additional supplier options.
1.3 Request for Information (RFI)
1.3.1. RFI Preparation: Develop a detailed RFI document that outlines The Sourcing Co.'s needs and expectations.
1.3.2. Distribution: Send the RFI to shortlisted suppliers.
1.3.3. Evaluation of Responses: Assess the responses based on criteria such as capability, experience, and compliance with requirements.
1.4. Request for Quotation (RFQ)
1.4.1 RFQ Document: Prepare an RFQ document that includes detailed product specifications, quantities, delivery schedules, and terms of business.
1.4.2. Supplier Briefing: Provide suppliers with a briefing to ensure clarity on the RFQ requirements.
1.4.3. Quotation Analysis: Compare the quotations based on cost, quality, delivery terms, and other critical factors.
1.5. Negotiation and Contracting
1.5.1. Negotiation: Enter negotiations with selected suppliers to agree on terms and conditions.
1.5.2. Contract Drafting: Draft a detailed contract covering all agreed terms, including pricing, delivery schedules, quality standards, and penalties for non-compliance.
1.5.3. Contract Review: Have the contract reviewed by legal and compliance teams before final approval.
1.5.4. Contract Signing: Finalize the agreement with the supplier and secure signatures from authorized representatives.
2. Appraising New Suppliers
2.1. Preliminary Assessment
2.1.1. Initial Contact: Establish initial communication to gauge interest and capability.
2.1.2. Questionnaire: Send a pre-assessment questionnaire to gather preliminary information about the supplier's capabilities and compliance.
2.2. Detailed Evaluation
2.2.1. Company Background Check: Conduct a background check on the supplier's financial stability, reputation, and history.
2.2.2. Capability Assessment: Evaluate the supplier's manufacturing capacity, technology, and workforce.
2.2.3. Quality Management: Review the supplier's quality management systems and certifications (e.g., ISO standards).
2.3 Sample Testing
2.3.1. Sample Request: Request product samples for testing and evaluation.
2.3.2. Quality Inspection: Conduct a thorough inspection of the samples to ensure they meet the required standards.
2.3.3. Feedback Loop: Provide feedback to the supplier and request improvements if necessary.
2.4. Supplier Approval
2.4.1. Evaluation Report: Compile an evaluation report summarizing the findings from the detailed evaluation and sample testing.
2.4.2. Internal Review: Conduct an internal review with relevant stakeholders to decide on supplier approval.
2.4.3. Approval Notification: Notify the supplier of their approval status and outline the next steps.
3. Factory Audit
3.1 Audit Preparation
3.1.1. Audit Plan: Develop a comprehensive audit plan including objectives, scope, criteria, and checklist.
3.1.2. Audit Team: Assemble a qualified audit team with relevant expertise.
3.1.3. Pre-audit Briefing: Conduct a briefing with the audit team to ensure everyone is aligned on the audit plan.
3.2 On-site Audit
3.2.1. Opening Meeting: Hold an opening meeting with the supplier's management to explain the audit process and objectives.
3.2.2. Facility Tour: Conduct a tour of the facility to observe operations and gather initial impressions.
3.2.3. Documentation Review: Review relevant documents such as quality records, production schedules, and compliance certificates.
3.2.4. Interviews: Interview key personnel to assess their knowledge, competence, and adherence to procedures.
3.2.5. Process Observation: Observe manufacturing processes to verify compliance with standards and identify any areas for improvement.
4. Audit Report
4.1.1. Findings Compilation: Compile the audit findings, including any non-conformances and areas of concern.
4.1.2. Scoring and Rating**: Score the supplier based on predefined criteria and rate their overall performance.
4.1.3. Report Writing: Write a detailed audit report and share it with the supplier and internal stakeholders.
5. Factory Audit Checklist and Questions
5.1. General Information
- What is the company's full name and address?
- Who is the main contact person and what are their contact details?
- How many years has the factory been in operation?
- What are the main products manufactured at this facility?
5.2. Legal and Regulatory Compliance
- Can you provide copies of the business license and any other relevant certifications?
- Are there any outstanding legal or regulatory issues concerning the factory?
- How does the factory ensure compliance with local and international labor laws?
5.3. Management Systems
- What quality management systems (e.g., ISO 9001) are in place?
- Can you provide evidence of certifications for these systems?
- How often are internal audits conducted, and what is the process for them?
5.4. Human Resources and Labor Practices
- How many employees work at the facility?
- What are the working hours and overtime policies?
- Are there procedures in place to ensure fair treatment and non-discrimination?
- What is the process for hiring and training employees?
5.5. Health and Safety
- What health and safety policies are implemented in the factory?
- Can you show records of safety training sessions conducted for employees?
- Are there emergency procedures and first aid stations available?
- What are the measures taken to ensure a safe working environment?
5.6. Production Capacity and Capability
- What is the factory's monthly production capacity?
- Can you provide a list of the main production equipment and their capacities?
- What is the lead time for production from order placement to shipment?
5.7. Quality Control
- What quality control processes are in place at various stages of production?
- How are defects identified and handled?
- Can you provide records of quality control inspections and their results?
5.8. Environmental Compliance
- How does the factory manage waste and emissions?
- Are there any certifications related to environmental management (e.g., ISO 14001)?
- What steps are taken to minimize the environmental impact of production?
5.9. Supply Chain Management
- How are raw materials sourced, and what criteria are used to select suppliers?
- What is the process for handling delays or issues with suppliers?
- Can you provide documentation of supplier evaluations?
5.10. Security
- What security measures are in place to protect the facility and its products?
- Are there systems for tracking and tracing products throughout the supply chain?
- How is data security handled, particularly regarding customer information?
6.1. Follow-up and Corrective Actions
6.1.1. Corrective Action Plan (CAP): Request the supplier to submit a CAP addressing the non-conformances identified.
6.1.2. Implementation Verification: Follow up to verify the implementation of corrective actions.
6.1.3. Re-audit: If necessary, schedule a re-audit to ensure compliance with the required standards.
7. Documentation and Record Keeping
7.1. Record Maintenance: Maintain comprehensive records of all sourcing, appraisal, and audit activities.
7.2. Access Control: Ensure that documents are stored securely and access is controlled.
7.3. Document Review: Regularly review and update documentation to reflect changes in processes and regulations.
8. Review and Continuous Improvement
8.1. Performance Monitoring: Continuously monitor supplier performance through regular reviews and audits.
8.2. Feedback Mechanism: Establish a feedback mechanism to gather input from internal stakeholders and suppliers.
8.3. Continuous Improvement: Implement improvements based on feedback, performance data, and audit findings to enhance the sourcing process.
This extensive procedure and documentation will help The Sourcing Co. maintain high standards in sourcing, appraising new suppliers, and conducting factory audits, ensuring quality and compliance throughout the supply chain.