Best Practices to Refresh Your Quality Control and Audit

Best Practices to Refresh Your Quality Control and Audit Program

Presenter: Terri Olano| Date: June 10, 2021

[email protected]@qima.com

Best practices for product inspections and supplier audits

How to manage your supplier relations and keep subcontracting above board

Efficiency practices to optimize quality costs while improving quality in the long term

Webinar agenda

2

1.

2.

3.

This webinar will take you through some key touch points in making sure your established quality program is up to date: from making sure all your bases are covered during inspections and audits, to making the best of your quality budget with smart use of sourcing data and technology.

[email protected]

The Evolution of a Product

[email protected] 3


Product integrity throughout the life cycle

Store / Merchandising

Transportation

Product Concept

Quality & Capability Audit

Social Audit

Raw Materials Testing /Testing to Failure

In-Line / In-Process Inspection

ProcessAudits

Pre-Shipment Inspection

DistributionReturn to Vendor Analysis C-TPAT /

Security Audit

Vendor Selection

Pre-Production

Production

LoadingInspection

GAPAnalysis

Sensory Testing

Concept /Design Review

SupplierQualification

Risk Assessment

Label Evaluation & Verification

Production Monitoring

Raw Materials Traceability

InterventionTesting

Compliance & Performance Testing

Final Random Inspections

CUSTOMER DATA MANAGEMENT

4


Auditors, inspectors and back-office experts are trained and certified by product line and/or client

Softlines

Inspector Training• Fabric Weight Testing• Textile Color Shading• Measurement Checks

Testing Capabilities Include• Fiber Identification• Toxicity • Banned Azo Colorants• Performance Testing

• Footwear• Garments & Apparel• Luggage & Bags• Soft Toys• Textiles & Fabrics

Hardlines

Inspector Training• Visual and Functional Requirements• Safety Testing • Product-specific testing

Testing Capabilities Include• Endurance and Performance• Directive Testing• Safety Testing

• Brown & White Goods• Toys & Recreational• Eyewear• Gifts & Homeware• Technical Parts

Food

Inspector Training• Sensory Analysis • GHP / HACCP audits• Fresh and Frozen Food• Canned Food

Testing Capabilities Include• Heavy Metals • Pesticides • Microbiology

• Fruits & Vegetables• Seafood, Meat & Poultry• Canned & Frozen Food• Baby Food • Food Packaging

The importance of a properly trained team

5

[email protected]

Best Practices for Product Inspections and Supplier Audits

[email protected] 6


The most popular services that we see:

Store / Merchandising

Transportation

Product Concept

Quality & Capability Audit

Social Audit

Raw Materials Testing /Testing to Failure

In-Line / In-Process Inspection

ProcessAudits

Pre-Shipment Inspection

DistributionReturn to Vendor Analysis C-TPAT /

Security Audit

Vendor Selection

Pre-Production

Production

LoadingInspection

GAPAnalysis

Sensory Testing

Concept /Design Review

SupplierQualification

Risk Assessment

Label Evaluation & Verification

Production Monitoring

Raw Materials Traceability

InterventionTesting

Compliance & Performance Testing

Final Random Inspections

CUSTOMER DATA MANAGEMENT

7


Ethical Audits: QIMA’s Best-In-Class Protocols use innovative solutions and most recognized international standards for ethical compliance

Structural Audits: To keep workers safe, our licensed civil engineers assess the structural, fire, and electrical safety of factory buildings

Environmental Audits: We assess your suppliers’ pollution risk through actionable audit protocols including chemical controls, water testing, waste disposal assessment

Different types of supplier audits

Manufacturing Audits: Ensure your suppliers' capabilities deliver on their promises

Technical Audits: Estimating the gap between the documented systems and the actual implementation

C-TPAT Audits: Audits that strictly adhere to the protocols of U.S. Customs and Border Protection

Food Audits: Hygiene (GHP) and Good Manufacturing Practice (GMP) Audits for food processing facilities

8


Manage social risks and gain an accurate picture of working conditions

Auditors conduct an extensive

evaluation of a supplier’s social practices

according to QIMA’s own audit protocol

or international standards such as

SMETA, amfori BSCI, ICS or Higg Index.

Ethical audit protocols typically cover:

Hygiene

Health & safety

Waste management

Labor practices

Worker representation

Disciplinary practices

Discrimination

Working hours and wages

Monitor and improve a factory’s environmental impact

QIMA auditors assess a factory’s compliance with regulations and standards for environmental protection.

Our environmental audit protocol is based on the ISO 14001 standard and covers:

Environmental management system

Solid and hazardous wastes

Wastewater

Air emissions

Nuisance

Energy and water use

CO² emissions

Waste management

Audit protocols focus on specific aspects of social responsibility

Ethical Audits Environmental Audits

Verify the integrity and safety of your supplier’s premises

Licensed structural/civil engineers conduct

an audit of a factory’s premises and

provide recommendations for repairs,

strengthening and retrofitting measures.

Structural audit protocols cover:

Verification of load conditions

Structural system of the building

Detection of structural defects, damage, distress, deformation or deterioration

Plan and alignment check

Maintenance and exposure to aggressive environment

Fire safety check (optional)

Electrical safety check (optional)

Structural Audits

9


Comprehensive CSR solutions for a responsible supply chain

Ethicalaudits

Environmentalaudits

A suite of options to help your business meet all of its sustainable sourcing goals

Independent third-party review of your supply chain’s impact with a focus on long-term change

Gather data to manage risks and make informed decisions to build a sustainable supplier network

Audit protocols performed to recognized industry standards or customized to your needs

Corrective action plans equip you and your suppliers to take action

Protect workers and the planet, improve consumer trust and encourage meaningful continuous improvement

Structural audits

10


• Mandatory supplier kickoff workshop

• Audit existing factories incl. tier 2 suppliers

• Timeframe: 1-2 weeks

• Determine high and low performing suppliers

• Factory Improvement Services to implement CAP

• Organize supplier training workshops

• Follow-up audits for failed suppliers

• Eliminate suppliers with continued non-compliance

Approved for 1 Year

Robust process designed for long-term transformation

Desktop

Review

Desktop Review

Potential third intervention follow-up

AT RISK

GOOD CONDITION

NEEDS IMPROVEMENT

2. Measure and correct (months 3-6)1. Engage (months 1-2) 3. Train and educate (months 6-12)

AT RISK

GOOD CONDITION

NEEDS IMPROVEMENTInitial Visual

Audit-

Full VisualRe-audit

Action Plan+

Second Intervention

GOOD CONDITION

11


Collaborate for continuous improvement

Use QIMA audit data to build targeted factory improvement programs that bring results

Establish an improvement program for each factory based onaudit findings, with timelines and fixed KPIs

We work with your factory to fix non-compliances listed in the corrective action plan

Independent advisory services on audit failure root cause analysis and process improvement

Custom onsite training, e-learning and workshops to onboard your supply network and increase supplier collaboration

Go beyond audits by working with suppliers to improve and upskill for long-term partnerships

[email protected] 12


Data and tech integrated into our audit approach for full visibility

Advanced tools to simplify decision making and maximize the impact of your supplier audit programs

Identify and manage risk in your supply chain

Monitor supplier compliance and identify performance trends by audit type, industry or location with your custom dashboard

Identify unauthorized subcontracting with GPS tracking & supplier mapping; link audit and inspection data to spot inconsistencies

Risk-based approach: prioritize audits for higher risk countries and establish optimal frequency based on KPI data and our robust country risk map

Ensure business continuity and assess ethical compliance when physical factory access is limited with remote auditing solutions

13


Audit dashboard for monitoring suppliers and compliance trends

Filter your audit data by audit type and industry, or zoom into individual countries and factory locations

Monitor your suppliers’ scores and track audit

validity and CAP status easily

14


Detect quality issues early in the production process (raw materials, machines setup, etc)

0-20%

Initial Product Check (IPC)

80-100%

Pre-ShipmentInspection (PSI)Verify the quality of the whole production lot before it leaves the factory

Production Timeline

0-100%

Production Monitoring (PM)Detect quality issues early in the production process (raw materials, machines setup, etc.)

Sample Picking (SP)Have samples collected from the production line, for your own reference or lab testing

Inspections secure your product quality at every stage of production

100%

Container Loading Check (CLC)Ensure every product you paid for makes it to the truck; reduce the risk of damage during shipment

20-80%

During Production Inspection (DUPRO)Mid-production follow up to ensure that all issues discovered are corrected before ordercompletion

15

[email protected]

How to Manage your Supplier Relations and Keep Subcontracting Above Board



A constructive philosophy

The importance of a good audit program is to promote transparency, cooperation and continuous improvement through training (e.g. kick-off supplier workshops, follow up of CAPs and re-audits with suppliers)

The purpose of supplier audit programs is to ensure continuous improvement

Continuous improvement is a result of:

Partnering with your factories to promote factory improvements rather than policing them

Transparency into their production issues and concerns so you are “aware” when subcontracting is needed

Great data that accurately reflects your supply chain

Using your audit data to work towards continuous improvement

17

[email protected]

Efficiency Practices to Optimize Quality Costs while Improving Quality in the Long Term



Accurate data is the key

Efficiency Practices - Audits

Accurate supply chain data

Supply chain transparency

Safer, more ethical global trade

Improved business efficiency

Informed decisions

19


Supplier audit best practices

Continuous review and regular follow-up helps to assure that requirements and necessary improvements are being implemented

Efficiency Practices - Audits

1. Engage –visual audit

2. Measure & correct –2nd intervention

3. Educate & train

20


Training for consistency:

Create program guidelines to be used by both the factory and your inspection team

Implement a self-inspection program to be used in conjunction with your inspection party

Compare results from the factory self-inspections with results from your inspection teams to drive improvement and efficiency

Reward for “Good Behavior”:

Utilize the data from “all” of the inspections to make decisions

Implement less inspections through service providers if factory proves they are following procedures.

Engage in a “skip lot” inspection program to encourage the factory to always be engaged in their products and quality

Efficiency Practices - Inspections

Inspection best practices

21


Smart Inspection Programs

Based on 6 months collected data, our ‘skip-lot’ programs help you make smart use of your inspection budget:

1. QIMA identifies and ranks low performing suppliers or

factories at risk based on failure rates, defect rates

2. Inspection frequency is automatically adjusted (from

50% to 100% of all shipments - customizable) for each

supplier or factory based actual performance data

3. Skipped inspection orders are randomly cancelled at

the last minute, keeping suppliers on their toes

Your inspection budget is spent efficiently, and your suppliers are incentivized for quality

Smart inspections, not just a skip lot program

Efficiency Best Practices - Inspections

22

[email protected]

Thank You!

Email: [email protected]: www.qima.com

Documents

Best Practices to Refresh Your Quality Control and Audit