Introduction
To stay competitive in a global marketplace, manufacturers must produce high-quality products that meet consumer expectations and comply with standards and regulations. Customers are increasingly interested in the source of their products and whether the vendor’s supply chain impacts the environment and communities.
Key Customer Requirements
Most key customers require audits. Each customer defines specified criteria to verify Advantus’s ability to meet: the quality, i.e. customer requirements; safety; environmental, occupational health and safety; social responsibility; and legal requirements, which may affect performance and bottom line.
Types of Vendor Audits
Factory Assessment
- Factory Capability & Capacity Assessment (FCCA)
FCCA affirms a facility is legally registered and evaluates the capacity of manufacturing processes to ensure capability and reliability. This inspection/assessment checks for biological, physical, and chemical risks. The FCCA audit is requested/initiated in RetailLink by Advantus. After completing the audit, the third-party auditing firm uploads the audit report, questionnaire, and photos to RetailLink, and sends Advantus the results and CAP via email. The Factory Assessment includes Vendor Profile (Vendor information, key product range, major market & customers, factory information, factory photo), Machine List & Capacity (Quantity, output per machine per hour, output measure, hours per day machine is run, and days per week machine is run), Vendor Factory Assessment The average FCCA audit cost is around $700 USD
- Contact for FCCA questions: FCCA@wal-mart.com
- Target – FA
- Lowe’s – EQA
- Michaels – Factory Assessment
- Factory Evaluation
A factory evaluation is conducted to make sure a factory is fit to produce items by reviewing the factory’s product quality, location capacity, and capabilities. A factory evaluation verifies that a facility is operational and suitable for manufacturing products, ensures that sourcing policies comply with requirements, identifies potential quality, operational, and ethical risks, and evaluates the competence of factory management.
Security Audits
SCAN
The Supplier Compliance Audit Network (SCAN) was developed to establish an audit-sharing platform that would help improve audit consistency, lower audit costs, and reduce audit frequency while maintaining confidentiality. Both US Customs and the C-TPAT organization have been introduced to SCAN.
- Target – SCAN membership for the factory is required upon registering the factory in Target VMM. The factory will be contacted by SCAN and will schedule the audit. Once the audit is completed, the factory will submit the CAP online to SCAN. SCAN audits are normally annual but can be valid for up to 2 years with an outstanding score.
- Lowe’s – Requires SCAN membership for DI factories
C-TPAT (Custom’s Trade Partnership Against Terrorism)
Through this program, U.S. Customs and Border Protection (CBP) works with the trade community to strengthen international supply chains and improve United States border security. Advantus requires vendors to complete a C-TPAT form located in the Advantus Vendor Compliance Manual. Compliance conducts a periodic review of the completed forms to ensure there are security procedures in place to protect the overall security of the factory. Compliance with security procedures helps to reduce cargo theft and helps to prevent the transportation of illegal drugs, human trafficking, and weapons of mass destruction.
Compliance review consists of the following:
- Physical Security
- Access Controls
- Personnel
- Security Awareness and Training
- Information Technology
Resource Links: C-TPAT’s Five-Step Risk Assessment – Business Partner Requirements
Responsible Sourcing/Social Accountability
Social compliance auditing is practiced mainly by retailers and manufacturers. Social compliance is a continuing process to protect the health, safety, and rights of employees, the community and environment in which it operates, and the lives and communities of workers in the supply and distribution chains. Social compliance and social responsibility address concerns about labor rights for workers, fair labor laws, harvesting, and the use of conflict minerals.
Sustainability Assessment
Under Construction
Audit Process Flow
Plan and Schedule
The Product Compliance Specialist (PCS) plans and schedules on-site audits. The PCS should identify the customers who require the audit report.
Execution and Reporting
The Compliance Manager will monitor on-site audit activity and once audits are completed, provide reports to customers accordingly.