An in-person factory visit to your Chinese supplier’s facility is a great opportunity to get a deep understanding of who they are and if they’re capable of fulfilling your requirements. Your factory visit should be a fact-finding exercise rather than just an opportunity to passively write down some notes on what you see.
Let’s explore some of the key questions you should be asking during your factory visit.
Using Your Eyes & Ears In The Factory
No doubt before you’ve gotten to the stage of visiting a supplier’s factory, you’ve already performed due diligence on them to ascertain that they’re legitimate. During this research, you should be able to find out a lot of helpful information that can confirm that they’re a capable supplier (and a real manufacturer), so where does an in-person factory visit fit in?
It’s a chance to confirm everything you’ve already learnt, and more, by using your eyes and ears.
In this episode of our podcast, we discuss the three categories of subjective evaluations you should be making visually when visiting a supplier’s factory, including:
- How good a fit they are for your business
- Whether their management is up-to-scratch
- If the conditions in the factory and how it’s setup are positive
In addition to the visual assessments outlined in the podcast, you should also be asking the following questions to help you learn even more.
27 Questions You Should Be Asking During A Visit To Your Chinese Supplier…
Asking about private/sensitive issues is a bit rude in China. But I often say that, if a supplier gets offended too easily, he is not familiar with export customers’ requirements, and you might have problems down the road with his mentality.
Questions about top management and their priorities
- When was the factory started? What was the previous job/experience of the owner?
- Is the factory profitable? What were its sales last year? And 3 years ago?
- What is the latest investment made in the factory, and how much did it cost?
- What is the next investment they are planning?
Questions about middle management
- Who will probably follow your order, besides the salesperson? How long have they worked in this factory?
- How many other orders do they follow?
- Where do the line leaders and the in-process QC staff come from? Were they promoted internally, or hired from the outside?
Questions about the workforce
- What proportion of workers came back after the last Chinese New Year?
- What is the employee turnover rate month over month (excluding the new year period)?
- What happens when an operator makes a mistake? Is she fined?
- Are operators paid by the number of pieces? Or by the hour?
- Is a part of their compensation based on the team’s results, or is it all individual?
Questions about the capacity
- Observe one line that is making about the same product as you intend to purchase. Ask for the output of this one line in one day. Then, based on what you see in a few minutes, calculate whether it makes sense.
- When the factory was set up, what was the expected (theoretical) capacity?
- What is the lead time from receipt of all materials/components to full packing?
- What materials/components do they buy? Do they only do the final assembly and packing, or they also make some components?
Questions about the quality management system
(See more checkpoints in a previous article about ISO 9000 factory audits.)
- How do they control the incoming components? Can you see it?
- How do they do in-process QC? Can you see it?
- How do they do final QC? Can you see it?
- Do they send samples for testing in a laboratory? Can you see the test result for a production batch that you point to them?
Questions about certificates and other customers
- Who do they work with? Can they give you references that you can call? Do they work directly with these customers, or through an intermediary?
- Can they show you the latest two purchase orders from a big customer they proudly mentioned to you?
- Can you see their business and export licenses? Can you take a photo of them to show to your investors?
- The last time they made a big mistake regarding product quality and their customer found out about it after shipment, what did they offer as compensation?
Questions about payment
- What is the usual bank that they request customers to pay into?
- Do they have a Hong Kong account?
- What are the payment terms?
Get answers to these questions and you’ll be far closer to deciding if this potential supplier is the right choice to manufacture your products.
The Next Step…A Factory Audit
Your visit to the supplier’s factory is really helpful for fact-checking and finding, but there are 2 issues to contend with:
- You may not be able to attend the supplier’s factory (perhaps you’re too busy or there are other reasons preventing you from visiting China such as it having closed its borders to foreign visitors as of now in July 2020).
- You may lack the expertise or knowledge to professionally assess the supplier’s capabilities.
This is why factory audits from an expert team are really helpful, as the auditor will assess the supplier’s manufacturing capabilities, possible risks, management and organization, and much more, providing a detailed report that will aid your decision.
Even if you cannot get to China to visit the supplier’s factory, the auditor will act as your eyes and ears. Also, as mentioned in the podcast episode included here, it’s possible to ask the auditor to take a few extra photos of certain areas of interest (such as the conditions that operators work in) or ask some specific questions.
Did I forget any other questions? What have you found to be particularly useful to ask or see when visiting a Chinese factory?
Editor’s note: This blog post is based on an earlier post from QualityInspection.org, but has been edited for Sofeast readers.
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