China factory audit checklist

A factory audit assesses a system, not a document. It is distinct from supplier due diligence, which confirms the company is a real, registered legal entity from the desk. A supplier can pass due diligence and still fail an audit — the licence is real and the certificates check out, but the machinery, the process controls, the change discipline or the test capability are not there. Because it is a point-in-time assessment, an audit reduces risk rather than guaranteeing any individual unit; the specific unit is verified later at a Factory Acceptance Test.

The checklist below is the on-site version of the methodology in Sinospect’s China supplier qualification cluster. Each item is a capability the audit must observe as evidence, not accept as a claim, and many are product- and category-dependent — apply the ones that fit what is being bought. Run it in the order below: site and entity first, then the quality system, production, process and change control, materials, test, corrective action, people and packing.

1. Company and site verification

The audit opens by confirming, on the floor, that the entity being walked is the entity that will hold the contract. This is the on-site counterpart to the document-stage due diligence, verified against the physical site rather than only on paper.

• Business licence sighted on site and cross-checked — the current Chinese business licence (营业执照) is present, its registered name and Unified Social Credit Code match the quoting entity, and the entity is confirmed in the SAMR registry. How to verify.
• The audited site is the manufacturing site — the address of the plant being walked matches the registered or a declared production address, and the supplier is the manufacturer rather than a trading company presenting a partner’s factory. How to tell.
• Business scope and any product licences cover the work — the registered business scope (经营范围) includes manufacturing the category, and any product-specific approvals the equipment requires are held where applicable (for example CCC, special-equipment or pressure-vessel manufacturing licences, explosion-proof certification).

2. Quality management system

A certificate on the wall is a starting point, not a finding. The audit tests whether the system named on the ISO 9001:2015 certificate is the system the plant actually runs.

• ISO 9001:2015 certificate authenticated and in scope — verified through the issuing certification body and its accreditation status (IAF CertSearch, and the CNCA/CCC records where applicable, since some Chinese registrars do not appear in IAF), with the certificate scope and site matching the category audited — not merely displayed.
• Controlled documented information is in use — ISO 9001:2015 requires documented information rather than a formal “quality manual”: procedures, work instructions where needed, and records — under revision control and matching what operators do at the station.
• Records are real and retrievable — pick a recent, named job at random and confirm inspection, test and material records exist and correspond to floor reality — not reconstructed or back-dated after the auditor asks.
• Internal audits and management review are happening — dated internal-audit reports and management-review minutes within the last cycle show the system is maintained, not dormant.

3. Production capability and capacity

The core of a factory audit: does the equipment on the floor match the equipment needed to build the order, and is there capacity to build it in the promised window?

• Key production equipment present and operational — the machines the process requires are on the floor, running, and of a type and condition consistent with the required tolerances — not idle, stripped or borrowed for the visit.
• Declared capacity is consistent with the plant — stated monthly output is credible given the floor area, machine count, shift pattern and workforce observed, and consistent with the registered capital and headcount.
• Production flow is controlled and observed end to end — material moves through incoming, fabrication, assembly, test and packing in a controlled sequence, with route cards or travellers stamped at each stage; work in progress is identified and segregated from finished and rejected goods.
• Maintenance is planned, not reactive — preventive-maintenance records for critical machines exist; machine condition and housekeeping are those of a plant that maintains its assets.

4. Process control, change management and tooling

Repeatability comes from control between operations and from discipline over what changes. Undocumented change — of material, sub-supplier, process or tooling after a first good sample — is a leading cause of failure on repeat China orders.

• Work instructions and a control plan at the point of use — current, legible instructions and a control plan or QC plan at the station, at the correct revision; project-specific inspection and test plans (ITPs) with hold and witness points are reviewed from past jobs as evidence of execution capability.
• First-article and in-process inspection recorded — first-article or first-off inspection is completed and logged before a run where applicable, and in-process checks are recorded, not verbal.
• Special processes are qualified — welding, heat treatment, coating, plating and potting are run to qualified procedures by qualified operators, with records: WPS/PQR and the individual welder performance qualifications (WPQ), heat-treatment charts, coating and NDT records as applicable.
• Change control prevents unauthorised changes — a formal engineering-change (ECN/PCN) and 4M (man, machine, material, method) process is in place; no change of material, sub-supplier, process, test method, tooling or production site is made without documented buyer approval, evidenced on recent changes.
• Buyer-owned tooling and IP are controlled — molds, jigs, dies and drawings paid for or supplied by the buyer are identified, inventoried, maintained, protected from use on other orders, and returnable.

5. Incoming materials, sub-supplier control and traceability

Much of an equipment’s quality is bought in. A factory that does not control what enters the gate cannot control what leaves it.

• Incoming inspection (IQC) is performed and recorded — incoming materials and components are inspected against specification on receipt, to a defined sampling plan (for example ISO 2859-1 / AQL) where sampling is used, with pass/fail records.
• Critical components are traceable and as quoted — the actual makes/models of bought-in critical components (motors, drives, bearings, controls, certified parts) match what was quoted, with no undisclosed downgrade; sub-tier sourcing is disclosed.
• Material certificates trace to heat/lot — mill certificates (for example EN 10204 3.1 where relevant) trace material to the heat, lot or PO in use; RoHS/REACH or other declarations are held where the product or market requires them.
• Sub-suppliers are approved and monitored — an approved-vendor list exists, sub-suppliers of critical items are qualified, and outsourced special processes are controlled to the same standard as in-house work.
• A golden/master sample is retained — where relevant, an approved reference sample is retained, signed and dated by both parties, and used as the baseline for first-article and ongoing verification.

6. Test, measurement and calibration

A factory can only prove what it can measure. Unverified measuring equipment turns every recorded result into an assertion.

• Test capability matches the product — the plant holds the test equipment needed to verify the equipment’s specification (electrical, dimensional, pressure, functional as applicable), on site or through a named accredited lab.
• Measuring and test equipment is calibrated and traceable — instruments carry in-date calibration, with certificates traceable to a national metrology institute (NIM) through a CNAS-accredited or ILAC-MRA laboratory, and a recall system for due dates.
• Out-of-tolerance impact is assessed — there is a documented procedure for what happens when a gauge is found out of tolerance: assessing and containing the product measured with it since the last good calibration.
• Routine and type tests are understood, with a route to FAT — the supplier can show which tests run on every unit versus by type, produces recent records that match the product’s stated standards, and can execute a witnessed Factory Acceptance Test on the actual unit before release.

7. Nonconformance, corrective action and traceability

The signal of a mature plant is not the absence of defects but a working loop that catches them, contains them and prevents recurrence.

• Nonconforming material is physically quarantined — rejects go to a controlled quarantine (locked MRB hold cage or red-bin area) so they cannot rejoin the flow — not loosely “set aside” on the floor.
• A nonconformance process exists and is used — NCRs are raised, dispositioned and closed, with records for recent cases — not an empty binder.
• Corrective action is root-cause driven and verified — recurring problems trigger a documented containment and corrective/preventive action (8D or equivalent CAPA) that addresses cause, with effectiveness verification — not an 8D report that stops at the symptom.
• Product is traceable and complaints are closed — a finished unit can be traced back through its test records, material lots and key components for containment; a returns/complaints log shows how field issues are handled, the clearest evidence the loop functions.

8. Workforce, environment and safety

Capability rests on people and conditions. Chronic understaffing, untrained operators on skilled work, or a plant that ignores its own safety and environmental obligations are leading indicators of quality and continuity risk — and, for many buyers, a compliance requirement in their own right.

• Operators on skilled processes are trained and records exist — training and qualification records back the people running special processes and inspection.
• Housekeeping and safety are specific, not vague — 5S, marked fire exits, PPE, machine guarding, chemical and compressed-gas storage, and electrical safety are observed; a disorderly floor usually mirrors a disorderly process.
• Environmental and social compliance evidenced to the required depth — environmental permits, waste manifests and injury logs are reviewed; where the buyer requires it, social/ethical audit elements (BSCI, SMETA or the buyer’s code) covering working hours, contracts and underage-labour checks are assessed. A robust social audit is a specialist scope, not a by-product of a quality audit, and is weak over video.

9. Packaging, preservation and export readiness

A plant can build a compliant machine and still lose it in transit. For industrial equipment shipped to distant project sites, packing and preservation are part of the audit, not an afterthought.

• Packing specification matched to mode and route — seaworthy/export packing where relevant: corrosion protection (VCI, desiccant), crate strength and lifting points, and container lashing suited to the payload and voyage.
• Timber and marks meet export rules — ISPM-15 heat-treated timber where wood packaging is used, with correct shipping marks, handling symbols and case labelling.
• Spares, documentation and evidence are packed and recorded — spare parts and technical documentation are included, a photo record is taken before crates are closed, and container loading is supervised, with dangerous-goods/export documentation where applicable.

How to run the audit

Match the method to the stakes. A desktop review screens documents and certificates remotely; it is a pre-audit filter for a low-value, well-referenced supplier, not proof of floor capability. A live video audit— the auditor directs the camera in real time through the floor, calibration room and records — verifies that a quality system and infrastructure exist and can check nameplates, certificates and records on camera, but leaves blind spots: material gauge and weight, scrap containment, hidden subcontracting and confidential worker interviews. An on-site audit is the strongest for machine condition, measurements and interviews, and is the right call for higher-value, custom or first-time orders; a pre-recorded tour is not an audit in any mode.

Whichever method, the audit should be run by someone independent of the supplier, competent in the equipment category and applicable standards, and briefed on your specification — and it should precede, not replace, the later Factory Acceptance Test and pre-shipment inspection. A qualification-stage factory visit covers similar ground with a wider, less system-focused lens.

Decision rule

Clearing every applicable section demonstrates the systemic capability to build to specification — a point-in-time assessment of the plant’s system, not a guarantee of any individual unit or of future performance. A gap in any section is a finding, not an automatic disqualification: it should be resolved before award, accepted as a documented risk with a mitigation (tighter inspection, staged payment against verified milestones, a mandatory witnessed FAT), or treated as a reason to look elsewhere. A supplier unwilling to show the underlying records for a section should be deprioritised — on an audit, refusal to evidence is itself the finding.

About factory audits