Basic Guidance for Performing a Contract Manufacturing Audit
Routine audits are critical to ensure quality and compliance on products or systems across a network of suppliers and partners. No matter the audit type, it is important to understand the roles within the manufacturing supply chain and to drill down on processes used, especially in the use of contract manufacturing. Every audit is different, but the broader goal is to verify and evaluate what is in place and used by your contract manufacturer. Your audit should identify the strengths and weaknesses of your contract manufacturer. Below you’ll find basic guidance for performing a contract manufacturing audit that will help you achieve quality and compliant manufacturing outcomes.
Prepare for your contract manufacturing audit
Audits are only as effective as you make them. Make sure to spend time upfront so you are prepared and will maximize your effectiveness of the on-site visit. Here is a list of things that should be done prior to the on-site visit:
Review all manufacturing build documents that are accessible and don’t require onsite time to access (i.e., OMS’s, BOM’s, quality control, etc.).
Compile and organize any prior audits or notices such as Corrective Action Reports and Non-Conformances for more visibility into the audit landscape.
Plan a timeframe that gives enough of a window for the contract manufacturer to prepare for preparation time. We usually recommend a timeframe that is between 3-4 weeks for notice and the onsite visit.
Compile questions you want to be verified in a contract manufacturing audit
It is important to define the type of audit you plan to conduct. Then, prepare process-related questions. Below are several questions and verifications to ask during a contract manufacturing audit:
What type of product or system has the contract manufacturer produced and are the processes used to manufacture similar to what you need to be done?
What documentation control system does the contract manufacturer use for design, documentation, and procurement?
What is the contract manufacturer’s sweet spot in terms of volume and delivery cycle?
Has the contract manufacturer ever failed to deliver on a build? If so, why?
Can the contract manufacturer meet your delivery timeline?
Does the contract manufacturer have the technical and technological expertise to build your equipment?
Does the contract manufacturer have the data to show strong training and adherence to written procedures?
How does the contract manufacturer handle non-conformances?
Does the contract manufacturer have data to show that problems do not repeat and can they do a root-cause analysis to eliminate the issue?
What type of metrics does the contract manufacturer have in place for measuring performance (such as OTD)?
What outside certifications does the contract manufacturer already have (such as ISO)?
Identify process gaps and focus on the opportunities for process improvements
Documentation and data review are the two strongest ways to identify gaps in any production or manufacturing process. Another often underutilized way is to perform Gemba walks. Seeing with your own eyes the process, workflow, and what is or isn’t working will help effectively manage your audits. Gemba is Japanese for “the real place” and is a common tool used in Lean Process and Six Sigma.
Avoid pitfalls commonly seen during contract manufacturing audits
When Applied Engineering audits suppliers, we look for evidence of a visible factory and that any key roles with authority are working at the right level. Also, we look for adherence to safety practices such as if the work environment is following 6S standards. During our audits we also routinely see:
Lack of documentation and adherence to specific processes.
Non-conforming material management, corrective action processes, and process validation.
Improving processes takes time but starts with adequate documentation. This includes the process and other processes used in inspection, storage, packaging, transportation, and training.
Recognize and leverage the benefits of contract manufacturing audits
Frequent checks and balances to critical processes help provide perspective and bring opportunities for improvement. With the right focus and follow-up from your audit, benefits will result. These benefits are used to improve your competitive advantage and the overall culture of your organization. Some example benefits:
Lowering the overall operational risk to a business
Improving an organization’s efficiency and therefore reducing costs
Isolating areas in a process that can obsolete, are inadequate, or simply wrong
Fostering communication and feedback for broader input and process improvement
Providing an opportunity for teams to celebrate excellent performance and achievement
Next steps after a contract manufacturing audit
Be sure everyone understands what the findings were from the audit. Do not wait too long for a response or corrective action to these findings. Also, it is key to get the management team engaged and part of the report out. The feasibility of any correction plan is important to evaluate. It is okay to suggest or require more resources from the contract manufacturer or company to help implement any corrected or approved plans. Sometimes, this may require external resources to meet the level of standards required for compliance.
At Applied Engineering we take a strategic analytical approach in conducting our contract manufacturing work. We have a robust corrective action process, risk analysis process, and follow Lean Six Sigma DMAIC processes. DMAIC processes (define, measure, analyze, improve, and control) help improve problem-solving by setting structure to a given task. Since these processes are data-driven, we can drill down to the root cause more effectively and more confidently implement the necessary changes.
Whatever methods or partners you use for performing a contract manufacturing audit, ask the right questions and ensure the contract manufacturer gives a prompt response to any failures from the audit. Remember, follow-up is critical in any audit. If responses are not prompt or corrective and preventative actions are not in place, you may need to find a more reliable contract manufacturer.
Your long-term contract manufacturing partner is extremely important to the success of your production line and product. Read Always Look Behind the Certified Curtain of a Contract Manufacturer to help ensure you have the most reliable partner in place.
