Asia Quality Focus Limited. All rights reserved.
EXTENSIVE FACTORY AUDIT REPORT GENERAL INFORMATION AQF Report#
10937
Client Name
GABLEMERE LIMITED
Your Ref#
SIMON
Audit Date
May 25 & 26, 2010
Vendor Name
NEW GOLDEN LUCK
Factory Name
Zhangzhou GuanCheng Industry & Trade Co., Ltd
Factory Address
Pukou Village, Chaoyang Town, Longwen District, Zhangzhou City, Fujian Province, China
Factory Tel/Fax #
86-0596-2171298 / 86-0596-2171098
Item Description
Furniture
REMARKS AND OBSERVATIONS 1. This factory’s main products are steel indoor furniture series (beds/tables/chairs), its main production procedures are steel cutting and tooling (bending, punching, riveting, welding and polishing), surface treatment, assembly and packing. It’s noted from factory tour and production equipments, that the vendor has capacity to produce client intended items. And the factory claimed they had produced the client’s products three years ago. 2. Total workers are about 225 and total managements are about 50. During this audit, 100% employees are on duty. 3. The factory’s management is cooperative with this audit; the overall housekeeping is OK. 4. A new plant is under construction now, and the factory claimed that their production capacity would enhance 40% if new plant (line) began to run at the end of this year. 5. The vendor (New Golden Luck) is not the same as the factory, the factory claimed the vendor was one of their customers. 6. There have 6 QC personnel: 2 incoming materials inspectors, 4 in-process inspectors and 2 final inspectors. Documented quality control system and/or procedures are incomplete. The factory does not consistently conduct quality control function as per their procedures’ requirements. But the workers are skillful. 7. No dormitories are provided to employees as said. 8. Worker’s working hours are not strictly tracked, e.g. there is overtime on working day but no such attendance records. Their payrolls are simple, overtime hours, overtime wage and deduction items are not defined in their payrolls. 9. Found one child labor (Yang Xue-Li is born on Sept1994), after review employees’ personnel records. It’s recommended that factory should establish a formal procedure to verify employee’s age to avoid child labor.
AUDIT CONCLUSION Unsatisfactory (90%)
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 1 of 22
Asia Quality Focus Limited. All rights reserved.
A. FACTORY PROFILE AND INFO (Non-scoring section) Managing director/GM
Zhang Yue-Chong / Zhang Yue-Xiong
Sales/marketing manager
Lou Guo-Qian
QA manager
Hong Chang-Hai
Technical/design manager
Mr. Liu
Factory/production manager
Mr. Tan
Factory contacts/Position/Email
Lou Guo-Qian/ Sales Manager/
[email protected]
Ownership of the factory
Zhang Yue-Chong
Date of establishment
Aug. 10, 2005
Total operating space
20,000sqm
Product ranges
Steel indoor furniture like bed, table and chair
Export percentage
100%
Last year turnover
RMB50millions
Payment Terms (L/C, T/T, etc)
L/C, T/T
Total Lead Time (from getting order to delivery)
30~45days
Nearest seaport / airport
Xiamen seaport / Xiamen airport
Total employees
275
Manufacturing personnel
225
Quality controllers
6
R&D
7
Engineering personnel
14
Others
23
Production capacity per factory
100* 40’ containers a month
Production capacity per auditor
80~90 *40’ containers a month Auchan / French and Spanish Carrefour / French and Italy
Major customers (name/country/percentage)
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 2 of 22
Asia Quality Focus Limited. All rights reserved.
Overview of the factory (new factory gate/old factory gate/ reception area /production plants/office building/abuilding plant )
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 3 of 22
Asia Quality Focus Limited. All rights reserved.
Sample room about 1000sqm
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 4 of 22
Asia Quality Focus Limited. All rights reserved.
Production lines/workshops (finished products area; incoming material area; steel tube cutting; steel tube punching area; welding area; pre-treatment area; two powder coating lines; two assembling lines)
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 5 of 22
Asia Quality Focus Limited. All rights reserved.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 6 of 22
Asia Quality Focus Limited. All rights reserved.
Manufacturing machines (tube bending machine/2sets; riveting machine/12sets; punching/27sets; CO2 welding machine/10sets; tube cutting machine/2; powder coating line/2lines; welding machine/ 5sets; electric weldor/3sets; bench drill/6sets; air compressor/4sets; tap borer/1set; pressing machine/20sets; polishing/1set)
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 7 of 22
Asia Quality Focus Limited. All rights reserved.
Backup electricity generator (one power generator/5KVA)
Vendor/factory business card Found the vendor is not from this factory, while the factory is a real manufacturer (not a trader).
See below about factory business card and factory gate.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 8 of 22
Asia Quality Focus Limited. All rights reserved.
B. DOCUMENTS VERIFICATION (Non-scoring section) B1.
Business License
Issued and expired date: 2005/8/10 to 2025/8/9
B2.
Export license
Issued and expired date: None
B3.
Products certificates (RohS, CE, etc)
Testing report based on GB/T3325-2008 and GB/T18584-2001
B4.
ISO 9000 Certificate
Issued and expired date:
None B5.
B6.
Social Accountability Compliance Certificate None
Issued and expired date:
Labor Contracts/Factory Regulations
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 9 of 22
Asia Quality Focus Limited. All rights reserved.
B7.
Payrolls and Attendance Records
B8.
Fire Certificate
B9.
Environmental Certificate
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 10 of 22
Asia Quality Focus Limited. All rights reserved.
C. MANAGEMENT SYSTEM Part 1: Design Control C1.
Does the factory review design input & outputs relating to product requirements?
Yes
No
There has a sample making department in the factory, they make sample as per client’s requirement and send to client to verify then production. There have no formal design control procedure in the factory. C2.
Does the design output provide information for purchasing, production (including packaging) use, and determine product specifications, special inspection & test requirement where necessary?
Yes
No
After samples are approved by their client, sample making team issue BOM and engineering drawing to related departments (production department, purchasing team, warehouse and QC team). But special inspection/test requirements are not listed or described)
C3.
Does the factory conduct design testing and record customer review prior to production, i.e. first article, pilot run?
Yes
No
The factory claimed they conduct design testing and record customer review (pilot run and first article), but no such documented evidences (e.g. records and/or written procedures). C4.
When there is change to product design, does the factory conduct verification and validation to the changed product?
Yes
No
The factory claimed they would conduct verification when there is change to product design, but no such documented evidences (e.g. records and/or written procedures). C5.
Does the factory have a method of controlling product changes, e.g. ECN?
Yes
No
When there is change to product design, sales reissue samples making order to design department, design department remake and inspect sample then resend to customer for verification. It‘s difficult to trace the history of product design.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 11 of 22
Asia Quality Focus Limited. All rights reserved.
Part 2: Purchasing Control C6.
Does the factory have a method for selecting, assessing, measuring and monitoring the capabilities of suppliers, i.e. supplier audits, supplier rating etc?
Yes
No
There have a formal and written suppliers selecting and management procedure. But they did not follow this procedure, e.g. they did not assess all of their suppliers. (purchasing procedure and suppliers assessing sheet attached)
C7.
Does the factory have an approved list of suppliers?
Yes
No
Yes
No
Approved suppliers list are not available. C8.
Does the factory purchase materials based on inventory count and lead time?
Yes. They purchase materials after inventory count, and based on production order and BOM. C9.
Are product specification and requirements (including delivery, quality) defined in the factory’s purchase orders?
Yes
No
Yes
No
Spec and requirements are defined in purchase orders.
C10.
Does the factory have priority contracts with critical suppliers, and does the factory provide forecasts?
No, no such procedures. The factory will select new supplier if supplier can not meet their requirements.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 12 of 22
Asia Quality Focus Limited. All rights reserved.
Part 3: Storage Management C11.
Does the factory record incoming material inventory?
Yes
No
Yes
No
Yes
No
Yes
No
Yes. There have materials inventory kept in the factory. C12.
Does the factory store inventory in an appropriate environment and safe condition?
Yes. The store condition is appropriate.
C13.
Does the factory record outgoing finished goods?
Yes. There are outgoing records of finished goods kept in the factory.
C14.
Does the factory clearly identify materials and products in warehouses?
No. Some materials (e.g. packing materials), semi-products and products are placed in the same warehouse and/or area.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 13 of 22
Asia Quality Focus Limited. All rights reserved.
C15.
Is there a First In First Out, FIFO or other method to control and rotate inventory?
Yes
No
Yes
No
Yes
No
The factory does not use FIFO or color management or other method to rotate inventory.
Part 4: Incoming Inspection C16.
Does the factory define the inspection requirements, sampling plan and acceptance criteria for incoming inspection of materials & components?
Sampling plan and incoming material inspection standards is not available on site. C17.
Does the factory conduct incoming inspection as planned? Are the results of incoming inspection recorded?
The factory conducts IQC inspection, but the sampling size is not clearly defined. There are incoming materials inspection records in the factory, but those records are incomplete and not properly filed.
C18.
Is the status of raw materials clearly identified, i.e. Approved, Rejected, Pending etc.? Is rejected material recorded and segregated?
Yes
No
No, in the warehouse and workshops, all of incoming materials are not clearly labeled of its inspection status. There is no segregated area to store rejected materials.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 14 of 22
Asia Quality Focus Limited. All rights reserved.
C19.
Does the factory review, determine and record the disposition of rejected material, i.e. RTV, Deviate to Use, Rework, Sort to use?
Yes
No
IQC find rejected materials will record and report to their supervisor, the supervisor determines Return, Sort to use or Rework. There have incoming materials inspection records but no handling records of rejected materials. C20.
Does the factory notify suppliers of rejected materials? Is it recorded?
Yes
No
When materials do not meet factory requirements, QC supervisor will notify purchase clerk, then purchase clerk communicate with suppliers. Related records are not provided to review. Part 5: Production Control/Inspection/Testing C21.
Does the factory define material for manufacture, i.e. a production BOM, router or tag?
Yes
No
Yes
No
Yes. There are tags and BOM on site as known from factory tour.
C22.
Does the factory plan production based on capacity, orders, stock, product type, etc.?
Yes. It’s known from factory management that factory makes production plan based on capacity, orders, production type and stock etc.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 15 of 22
Asia Quality Focus Limited. All rights reserved.
C23
Does the factory control and monitor lead times? i.e. monitor material lead time, safety stock, production planning, etc.?
Yes
No
Yes. The production leader and supervisors update production schedule according to daily production output. C24
Does the factory monitor, control and record all applicable process parameters?
Yes
No
The factory claimed there have technical parameters requirements provided to QC and production departments, but no such written evidence provided to review. C25
Does the factory calibrate all applicable process control points, including inspection and test equipment, e.g. temperature/ pressure gauges, timers, multi-meter, caliper, scale, etc?
Yes
No
There are inspection and test equipments (calipers and thickness gauges) used in the factory. They did not calibrate those equipments periodically. C26.
Does the factory plan and conduct equipment/ tooling maintenance?
Yes
No
All of machines and equipments are not checked, maintained and/or calibrated in the factory. C27.
Are products identified at all stages of manufacture?
Yes
No
Yes
No
Yes
No
Some materials and products are not labeled with inspection status and process status.
C28.
Does the factory define method of manufacture, i.e. work instructions, workmanship standards, defect classification, etc?
Work instructions and approval samples are not available in production areas. C29.
Does the factory conduct in-process inspection as planned? Are the results of in-process inspection recorded?
Yes. There have 8 personnel 100% check semi-products prior to surface treatment, 4 personnel 100% check finished products on assembly lines. 3 IPQC spot-check semi-products and 2 FQC on site.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 16 of 22
Asia Quality Focus Limited. All rights reserved.
C30.
Does the factory summarize and analyze in-process inspection results, i.e. by using control chart, run chart, etc., in various process/workshops?
Yes
No
The factory only records daily data, but does not further summarize and analyze inspection results. C31.
Are rejected material identified and segregated? Are reworked products re-inspected?
Yes
No
Semi-products are not identified with the inspection status, so it’s difficult to identify which is good or reject. Re-worked products are 100% checked by inspectors as said, but no such records. (Attached photo: Non-conforming products are not properly segregated from uninspected products.)
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 17 of 22
Asia Quality Focus Limited. All rights reserved.
C32.
Does the factory clearly define package requirements, i.e. pack list, packaging method, etc.?
Yes
No
Pack list is not available on site. But packaging method is clearly defined into Production Order and production BOM.
C33.
Does the factory define the inspection and test requirements, e.g. safety tests, etc, sampling plan and acceptance criteria for final product inspection?
Yes
No
The factory does not define accepted sampling plan and special test requirements (such as safety test, loading and impact) for final products.
C34.
Does the factory conduct final product inspection and test as planned? Are the results of inspection and test recorded?
Yes
No
Yes, the factory conducts final inspection on assembly line, but no such FQC records provided to review.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 18 of 22
Asia Quality Focus Limited. All rights reserved.
C35.
Are operators /QC personnel trained and are records available?
Yes
No
Yes
No
Yes
No
Yes
No
Training plan and training records are available.
Part 6: Continual Improvement C36.
Does the factory have continuous improvement program, i.e. management review, CAPA, 5S, Six Sigma, collect and review statistical data points etc?
No written procedures and records was established for continuous improvement. C37.
Does the factory initiate actions or projects to improve quality performance and processes base on above analysis results?
No, There is no evidence to proof factory how to continually improve quality. C38.
Does the factory have a method of reviewing customer complaints? Is complaint data entered into the continuous improvement program, i.e. CAPA, Trend Analysis, etc.?
Customer complaint management is poor. When sales receive customer complaints, they communicated with production and QC departments in the meeting and take out correction plan to the customer. It’s difficult to trace CAPA records and written procedures. C39.
Does the factory have an Internal Audit program?
Yes
No
Yes
No
Yes
No
No, no internal audit program. C40.
Does the factory management conduct management review based on data analysis, to determine strategies, align recourse to drive continuous improvement?
There are no management review records and plan. Part 7: Social Environment Responsibility C41.
Is overall air quality and lighting condition generally acceptable?
Yes, overall air quality and lighting condition are generally acceptable.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 19 of 22
Asia Quality Focus Limited. All rights reserved.
C42.
Is there any worker less than 16 ages on site or less than 16 ages at join date?
No
Yes
After reviewing all of employees’ personnel records, it’s noted that one worker (Yang Xue-Li) is born on Sept 29, 1994 and less than 16 ages now.
C43.
Do workers’ regular working time and overtime meet local labor laws?
Yes
No
It’s found from workers’ attendance records, their overtime hours are 64 hours on March this year and did not meet local labor laws (36hr/month). C44.
Do workers have at least one day off in seven?
Yes
No
No, It’s found that some workers worked 31 days on March this year after reviewing workers attendance records. C45.
Are workers voluntarily employed? (No ID card, diploma, or money detained)
Yes
No
Yes
No
Yes. Workers are voluntarily employed per interview with management and workers. C46.
Is worker’s monthly/hourly salary equal to or higher than the government standard?
Workers are paid as per piece rate. Their payrolls are very simple, overtime hours/overtime wage / deduction items are not defined, except total amount. In addition, selected workers’ attendance records are inaccurate (overtime were not recorded on working day), so we could not verify their hourly wage.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 20 of 22
Asia Quality Focus Limited. All rights reserved.
C47.
Are first aid supplies available on each floor?
Yes
No
Yes
No
Inadequate fire aid supplies in the factory, only one fire aid kit is equipped in warehouse. C48.
Is there any PPE (personal protection equipment) in place when necessary?
Yes. Personal protection equipments are available, e.g. veil for welder and powder coating workers, earplugs for punching workers.
C49.
Are fire extinguishers, fire alarms and emergency lights properly equipped?
Yes
No
The number of fire extinguishers is adequate, but some are equipped higher than 1.5M, some are ineffective. Emergency light and fire alarms are inadequate.
C50.
Are fire drills and evacuation drills conducted periodically?
Yes
No
Yes, they conduct fire drills once time per year. The lasted fire drill was conducted on April last year.
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 21 of 22
Asia Quality Focus Limited. All rights reserved.
SUMMARY OF POINTS ACHIEVED Maximum Points Possible
Total Points Achieved
Design Control
5
0
Part 2 (C6-C10)
Purchasing Control
5
2
Part 3 (C11-C15)
Storage Management
5
3
Part 4 (C16-C20)
Incoming Inspection
5
0
Part 5 (C21-C35)
Production Control/Inspection/Testing
15
6
Part 6 (C36-C40)
Continual Improvement
5
0
Part 7 (C41-C50)
Social Environment Responsibility
10
4
50
15
Section No.
Section Description
Part 1 (C1-C5)
Total: Overall Rating:
30%
AQF Audit/Inspection Conditions:
SIGNATURE OF FACTORY REPRESENTATIVE Signature: Lin Zhu-Ming
Date: May25~26, 2010
This report is issued by Asia Quality Focus (HK) Limited. The results reflect our findings at time and place of inspection and this report does not relieve sellers / manufacturers from their contractual liabilities & responsibilities for their products or prejudice buyers’ right for compensation for any apparent and/or hidden defects not detected during our random inspection or occurring thereafter. This report does not evidence shipment. www.AsiaQualityFocus.com Page 22 of 22
