Introduction
In today's globalized marketplace, ensuring the safety, ethics, and sustainability of your supply chain is paramount. At Ardencraft Technology, our commitment to ethical and socially responsible manufacturing practices is at the core of our operations. We understand that producing high-quality products goes hand in hand with ensuring the well-being and safety of our employees, compliance with local laws, and sustainable business practices.
To uphold these values, we conduct regular Social Compliance Audits (SCA) to evaluate factories' practices and make improvements where necessary. This approach focuses on evaluating potential suppliers based on their compliance with social, safety, and environmental standards. In this blog post, we will delve into the details of the SCA, its benefits, and why you should consider it for your supply chain management.
What is the SCA?
The Supplier Compliance Assessment (SCA) is a comprehensive factory audit designed to assess a supplier's adherence to various standards, including social compliance, safety regulations, and environmental practices. Unlike traditional audits, which may only scratch the surface of these critical aspects, the SCA goes deeper to ensure that your suppliers maintain a high level of ethical and operational integrity.
Why Choose an SCA?
Safeguard Reputation: The SCA helps avoid suppliers not meeting ethical standards, protecting your business reputation.
Spot Safety Risks: It identifies supply chain safety risks and socially responsible manufacturing practices whilst aiding improvement and alignment with ethical responsibilities.
What Types of Factories Should Undergo an SCA?
The SCA can be performed on factories of any size you are considering working with. However, it typically focuses on specific processes related to the product you intend to purchase. This targeted approach ensures efficiency and relevancy in the assessment.
Pricing and Duration
Ardencraft Technology offers the Supplier Compliance Assessment at a competitive rate of 595 GBP per man-day near our auditors in Shenzhen, China. Additional travel expenses may apply to other locations. This pricing includes one day on-site, which is often sufficient for most clients. The effectiveness of a one-day audit is maximized when it is a second-party audit aimed at assessing the maturity of a factory's systems and when the client specifies the product type for focus.
Ardencraft Technology also has access to auditors in Ho Chi Minh City and Hano in Vietnam alongside New Dehli in India. We can conduct audits in most of South-East Asia.
General Information
Our journey towards social compliance and ethical manufacturing begins with a comprehensive Social Compliance Audit. This audit is a reflection of your dedication to transparency and accountability in your operations. Here's a glimpse into some of the key findings and areas of improvement identified in the audit:
Risk Evaluation Examples:
The audit assessed various aspects of our operations and assigned grades to different areas, helping us gauge our performance in crucial areas, for example:
- Cooperation of factory management and compliance with laws received a grade of 18/25.
- Voluntary labour practices earned a commendable 22/25.
- Labor hours scored 18/25.
- Health and safety, an area we are committed to improving, received a grade of 12/25.
Auditor's Recommendations
To address areas requiring improvement, the audit identifies key recommendations. Here are some examples from audits we've carried out in the past:
Three Most Severe Issues to Correct:
Wage Transparency: The audit revealed a lack of wage details and payment dates on labour contracts. To ensure transparency, the factory started working on updating all contracts to include this crucial information.
Safety Measures: The absence of first aid boxes and detailed accident logs raised concerns about employee safety. The factory took immediate steps to rectify this by introducing comprehensive first-aid measures.
Personal Protection Equipment (PPE): The audit highlighted issues with employees not using appropriate PPE and lacking related training. The factory started training programs and ensuring the availability of suitable protective gear.
Other Issues to Correct:
Timekeeping: Employees were found to be not recording their hours but relying on electronic systems which were found to not accurately record workers' hours. The factory invested in a new electronic timekeeping system to improve its timekeeping process.
Exit Door Operation: Some exit doors lacked push bar operation, which is crucial for quick evacuation. the factory rectified this for enhanced safety.
Fire Drills: Fire drill records were analyzed and found to lack frequency and thoroughness. The factory started conducting fire drills more frequently to meet recommended state standards.
Machine Hazards: The audit raised concerns about the management of risks associated with machine hazards. We gave the factory recommendations on improving this and implementing a robust analysis and control system with support from our manufacturing support team.
Factory Profile and Major Customers
We check that the factory history is documented with the employee numbers, turnover, major countries served, and which products take up the majority of production; this helps to get accurate information that can be cross-checked against information sent to the client. You don't want to find out that your "factory" actually outsources all of the work to sub-suppliers, resulting in them acting more like a trading company than a manufacturer.
Number of Employees and Working Hours - Example
The factory employs a diverse workforce of 155 individuals, including management, administration, production, quality control, design/printing, and sales professionals. Their employees work 8-hour shifts, with one shift per day and six shifts per week, ensuring they receive the mandated days off and adhere to overtime regulations.
Lead Times and Component Sourcing
Efficiency is our priority, with a rapid lead time from receiving purchase orders to material procurement and manufacturing. We assess the factories' capability of meticulous sourcing of components from trusted areas within China to ensure they meet the customer's production timelines consistently.
In-House Processes
We assess whether the factory performs several key processes in-house, including component assembly, sub-assembly production, Quality process improvement projects, final assembly, burn-in testing, and packing. These in-house operations can easily be outsourced which can affect the final quality of the product. We identify these areas as risks and request documentation on how the factory's sub-suppliers are chosen. Your product is only as good as the weakest part of the supply chain. If one component fails in your product then the whole product is seen to be faulty by your customer.
Cooperation with Audits and Compliance with Laws
We investigate the frequency of cooperation with auditors and adhere to local labour laws ensuring their employees receive wages above the minimum wage, and the factory is actively working to improve labour contracts and document payment details more comprehensively.
Voluntary Labor Practices
The factory is assessed on its dedication to voluntary labour practices such as its commitment to prohibiting child labour, forced labour, and abuse. We interview five employees at random to ensure personal files are accurate and that the workers are above the legal working age and have a work environment that respects the rights and dignity of its employees.
Labor Hours
The audit requests documents to show that the factory strictly adheres to China's labour regulations regarding working hours, breaks, and public holidays. Ensuring their employees enjoy regular days off and work within the legal weekly hour limits all year round.
Health and Safety
While our commitment to employee safety is unwavering, we recognize that there is room for improvement in every factory. Our immediate focus is on enhancing fire safety measures, ensuring the availability of first aid resources, and improving personal protection equipment practices. Audits that highlight risks in these areas result in the factory conducting more frequent fire drills, additional first aid resources and implementing comprehensive risk assessments for machine hazards.
Observation of Facilities and Important Documents
Every factory claims state-of-the-art facilities encompassing production buildings, offices, showrooms, warehouses, and more. We crosscheck key documents such as business licenses, tax certificates, ISO certificates, and organization code certificates, reflecting their dedication to legal compliance and ethical business practices.
Conclusion
At Ardencraft Technology, we prioritize social compliance and continuous improvement. Our audits reflect our dedication to ethical manufacturing and industry leadership. In today's business world, ethical, safe, and sustainable supply chains are vital. Our Supplier Compliance Assessment (SCA) surpasses traditional audits, ensuring your suppliers meet high standards. Choose the SCA to protect your reputation, identify sustainability risks, and elevate your supply chain.
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