"Picture Day" - Why Factory Audits Are Not Enough
I'm quite fortunate to be able to discuss compliance topics with multiple audiences which helps me to better understand the challenges many face when trying to meet their Fortune 1000 client compliance needs. My last blog entry addressed the topic of testing in The Golden Sample: Why Testing Alone Isn't Enough. There are many companies out there, suppliers and distributors alike, who rely on testing as the only component of their testing program. Other companies use factory audits as their only form of compliance program. Factory audits are an important tool to measure your factory's ability to meet social responsibility guidelines but factory audits alone do not ensure compliance and rarely address product safety.
I call factory audits "Picture Day." Remember back in the day when you combed your hair, brushed your teeth, put on your best pair of khakis and a new shirt—all for your classroom photo. I can tell you that the kid in my picture bore little if any resemblance to the same kid out on the playground 30 minutes later. Unfortunately, that can sometimes be the issue with factory audits. Factory audits are a snap shot in time and they may or may not be an accurate reflection of how the factory is performing on a day to day basis.
Factory audits and product testing are the most commonly used tools to measure product safety and compliance. Some would argue that they are the best tools we have available. They just need to be used as components of an overall compliance program that allows you transparency and control of your supply chain. Compliance and product safety are hard. They can't be an afterthought, and they can't be done for $500 a year. They are proactive daily commitments to being better. And they do not guarantee 100% safe products or socially compliant factories.
We see examples of this nearly every week in the news. For example, Apple just got creamed in The NY Times over the working conditions in the factories making their iPads. This is truly tragic and it saddens me, but it is not going to put a dent in the demand for the iPad 3.
Walmart is also regularly in the news on this topic. According to their 2009 Global Sustainability Report, Walmart had 14,264 factory audits in 8,246 factories in 2007 and 11,502 factory audits in over 7,000 factories in 2008. I think these are pretty impressive numbers and yet in spite of an obvious commitment, their reputation for factory worker rights is less than stellar.
For those of you who may not be familiar with what a social responsibility audit is measuring, here is a link to the UN Global Compact's ten principles in the areas of human rights, labour, the environment and anti-corruption. These principals are primarily what is being looked at in social responsibility audits.
The vast majority of big companies manufacturing in Asia have products that are a lot more expensive than promotional products and they have huge financial commitments to corporate social responsibility programs (CSR). These companies are good at compliance. They also have the ability to dramatically influence what happens in their supply chain unlike most promotional products companies. And yet, they still have issues. Audits are an important component of your compliance program and you should be commended for doing them if they are proactive and part of your standard business practices rather than only at the request of a customer. Just know that if it is all you are doing, you only scratching the surface of the issue.
Brent Stone is executive director - operations for Quality Certification Alliance (QCA), the promotional products industry's only independent, not-for-profit organization dedicated to helping companies provide safe products. A Six Sigma Black Belt, Stone has more than 25 years of in-depth supply chain management experience with extensive expertise in process design, development, improvement and management. He can be reached at firstname.lastname@example.org or visit www.qcalliance.org for more information.