How To Validate a Factory’s Production Capacity without Going On Site?
Some clients have asked us, ‘how to confirm that a factory has the capacity needed to make our orders, without us being able to fly to their factory?’

The inability to go and meet suppliers on site has been a serious obstacle for many companies in 2020. And the situation won’t get better in the short term.

So, here’s how to validate a factory’s production capacity without needing to on-site at all.

 

Can your supplier’s factory even handle your order quantity?

Giving orders too large in relation to a factory’s capacity can lead to many problems, among which:

  • They have to rush and their usual controls are not applied in full, leading to quality issues.
  • They say YES at the start, and then they are forced to admit they CANNOT hold the shipment dates they had promised. This leads to, potentially, very long delays.
  • They look for a way to have some production done by a subcontractor, without telling their customer about it (naturally). The understanding of your quality standard is probably non-existent in that subcontractor’s staff, leading to quality problems.

👂 Listen to our podcast episode about validating a supplier’s production capacity:

 

Are there questions you could ask, to gather some information and assess their capacity?

Yes, there are, and none of these questions requires you to be on-site in China (or other Asian countries) in order to get an answer!

You could ask these questions about what they buy outside:

  • What components/materials do you buy that are custom-made for this product?
  • What is the capacity (per day, and counting good pieces only) of each of those custom -made components/materials?
  • Are those processes mature, with a need to rework/reproduce fewer than 1% of the quantity produced? Yes/No.

And you could ask these questions about what they transform in their facility:

  • What are your in-house processes?
  • What is the capacity (per day, and counting good pieces only) of each of those processes?
  • Are those processes mature, with a need to rework/reproduce fewer than 1% of the quantity produced? Yes/No.

And, more generally?

What will be the bottleneck for our production? There is always a bottleneck somewhere. Can you identify it, and indicate how many pieces can go through it in 1 day?

 

Could you send an auditor on-site to evaluate that?

Yes, most companies like ours have a standard approach to gather the information necessary to pinpoint how many pieces can be in 1 hour or 1 day, provided the factory is making the same general type of product during the visit.

Our Technical Quality Audit (charged at 495 USD per man-day), or Technical Process Audit (starting from 650 USD for a smaller operation) are the perfect types of audits for use in this situation.

However, always keep in mind that capacity is based on the number of GOOD PIECES. If 10% of the pieces in a batch are found defective and the sorting & rework job takes 3 people 2 days, it impacts production capacity greatly. That’s why it often makes sense to evaluate the factory’s quality management system at the same time.

 

Learn more about on-site factory quality audits

Keep going on this topic by listening to our podcast episode where we discuss factory quality audits in detail:

We explore how these audits are so adept at thoroughly examining a supplier’s quality system and weeding out the root causes of quality issues so you have a better chance of receiving products which reach your standard.

 

What’s your experience with using factory quality audits instead of going on-site to a factory yourself?

In 2020 it’s unlikely you’ve been able to visit supplier’s factories abroad very easily, and this has posed a problem for many buyers trying to vet new or current suppliers, including validating if they have the factory production capacity to be reliable.

So, have you relied on factory audits from a local company to get these answers? What benefits have you found, and what drawbacks have you encountered from the inability to get on-site yourself? Let us know by leaving your comment, please.


 

Ultimate Guide To Sourcing From China And Developing Your Suppliers [eBook]

This FREE eBook starts from the beginning, discussing whether you need to hire a sourcing agent, and follows the sourcing process right through to developing a trusted supplier’s quality and productivity.

There are 15 chapters over 80+ pages to explore, providing exhaustive guidance on the entire sourcing and supplier development process from start to finish, including:

  • Identifying suppliers,
  • Negotiations,
  • Quality inspections,
  • Developing Chinese suppliers,
  • Improving factory quality and productivity,
  • and much more…

Just hit the button below to request and download your free copy:

 

Ultimate Guide To Sourcing From China And Developing Your Suppliers [eBook]

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