How Lego improved CSR with toy quality management system?

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How Lego improved CSR with toy quality management system?

Corporate Social Responsibility (CSR) is a must for any toy brand that wants to achieve growth and avoid the costly implications of non compliance. A company that is testament to this fact is Lego. Last year the toy giant reported its highest revenue yet in its 85 year history, their profits rising 1.7% to 12.2bn kroner. This growth showcases the heights you can achieve through organizational commitment. Global retail brands are increasingly wanting to partner with suppliers of children’s toys who can provide them with the appropriate environmental and social compliance. Lego has been able to achieve their CSR goals through going above and beyond what any toy quality management system requires. How have they done this? Renewable energy. In 2012 the toy company began investing in wind turbines to power their operations globally. As a result, in 2016 more than 360 gigawatt hours of energy was used by the LEGO Group to produce the more than 75 billion LEGO bricks sold around the world during the year. Toy quality management systems - renewable energy They initially had committed to making this transition by 2020, but they ended up meeting their target 3 years early! This is one great commitment to the realm of renewable energy. Apart from this they are currently investing loads of money and time into finding alternatives to plastic for their famous building blocks. As consumers increasingly dictate how manufacturers design and make toys, the power of adopting CSR and green initiatives as a part of your competitive strategy will have global results for your brand. What do I mean by this? The toy quality management system you choose to adopt will provide a framework for which CSR is able to be strategically implemented for your brand. Lego is a prime example of this. Whilst they are a children’s toy brand, they have committed fully to sourcing a more environmentally friendly plastic for their iconic plastic blocks. Even though they have not yet found a suitable alternative, their commitment and investment in trying to, puts them at the forefront of an initiative consumers the world over want to see and be a part of. So I put the question to you…

How can your QMS leverage CSR for a globally competitive position?

Let’s take a bit of a deeper dive in… A QMS framework is just that: A framework that has been created to ensure quality in all areas from management to products, to customers, to factory processes and environmental impact. The ISO 14001:15 is the international standard used to navigate environmental impact and innovations. What are the key benefits of complying with ISO 14001:15? 
  • It demonstrates compliance with current regulatory requirements. Toy quality management system - ISO 14001
  • It increases leadership involvement and engagement of employees.
  • It improves company reputation and the confidence of stakeholders through strategic communication.
  • It achieves strategic business aims by incorporating environmental issues into its business management.
  • It provides a competitive and financial advantage through improved efficiencies and reduced costs.
  • It encourages better environmental performance of suppliers by integrating them into the organization’s business systems.
This system provides accountability and creates a platform for building sustainable relationships with your suppliers, as you work together to meet a set of global standards for your toy production.

How can your toy brand go about implementing ISO today?

We have outlined a stepped process which will help you prepare for compliance according to the environmental ISO 14001 framework for your brand;
  • You will need to identify all aspects and environmental impacts of your organization’s activities
  • If you have not established an environmental policy for your organization, you will need to go ahead and do this.
  • You will need to formalize your environmental procedures and publish them in company manuals and company policy.
  • You will need to bring the company into compliance with all legal requirements and mandatory regulations.
  • You will need to get the confirmation of compliance by all stakeholders such as clients and legal authorities.
  • Lastly, you will need to obtain a certification of your environmental management system by a registered third party.
ISO developed these frameworks in which brands are able to optimize their quality systems according to a set of international standards, by international standards it means that consumers can have confidence that their products are safe, reliable and of good quality. The ISO’s standards on road safety and toy safety regulations are just a few of those that help make the world a safer place. As consumers today become increasingly aware of how their favorite brands are attaining goals that closely align with a global value system, it will be important to adopt a toy quality management system that increases your competitive position in the market place. Do you have any questions around environmental auditing solutions? We will be pleased to answer them and help where we can.

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Furniture Inspection Best Practices For Importers

How does one go about skipping on lengthy delays, dodging product recalls and potentially damaging brand reputation that is brought on by furniture quality issues before it’s too late? Importing furniture from South-East Asia is as attractive, if not more, than any other market in the world, but the logistics, compliance, and potential communication challenges it presents does little to guarantee that the standards of quality for your destination market will be met. In this blog post, we seek to outline what you can do to ensure that your furniture reaches you at its highest level of quality, ultimately, to give your brand the competitive advantage it deserves.

Have you determined your DCL (defect classification list)?

This is often a step that is an afterthought, but classifying this, in the beginning, will help to clarify the meaning of your furniture inspection report. This is the most widely used defect category;
  • Critical defect – A critical defect is one that judgment and experience indicate is likely to:
    • result in hazardous or unsafe conditions for individuals using, maintaining, or depending upon the products; or
    • Prevent performance of the tactical function of a major end item. A critical defective is a unit of product that contains one or more critical defects.
  • Major defect – A major defect is one, that is likely to result in failure, or to reduce the usability of the product for its intended purpose.
  • Minor defect – A minor defect is one that is not likely to reduce the usability of the product for its intended purpose, or is a departure from established standards having little bearing on the effective or operation of the product.
If there is no established DCL, API has a detailed inspection checklist which will be made available so as to proceed with the inspection.

DUPRO (During Production Inspection) to help resolve your furniture quality issues early on

This is often a critical stage in ensuring that your final piece of furniture will reach its expected level of quality. Referring to the below, 2700 chairs were recalled because of fall hazards that were due to the breaking or bending of the leg. The CPSC found that structural frame of the upholstery chairs was missing a support block to the leg this was against original design. Furniture inspection - DUPRO furniture inspection - DUPRO check
Such as this upholstery chair, you would never check the structure frame inside visually after it is wrapped by fabric when the production was completed.
Furniture inspection complete productA DUPRO inspection could assess some of these critical points at the right moment before the production was completed. DUPRO could focus on finished products, evaluate production status and quality system implemented on the production line. In many cases, a couch or piece of furniture is inspected before the entire purchase order has been completed. This type of inspection means that any problem that has come about should be identified early on and will, therefore, be addressed on site. Your DUPRO inspection report needs to be inclusive of any and all quality issues that were found during the production process. No issue is too small to include.

Update your furniture specifications, based on the DUPRO feedback

Upon receiving your DUPRO furniture inspection report, you will need to go through every step of the report thoroughly. Look at what “pending” results there may be. You should have a strategy in place on how you address these “pending” quality issues. Furniture inspection - redefining product specifications It is at this point that you will need to re-communicate your products specifications to begin addressing those furniture items with “pending” status. Sourcing in Asia is not without communication and language barriers. You can look to overcome these barriers by using a neutral third party quality provider who has the expertise in your sourcing area. Having boots on the ground will ensure that your product specifications are communicated correctly and clearly.

Do a root cause analysis as a preventative measure going forward

It is important to note that a root cause analysis should not be a once off thing that you implement in the odd major defective production case. You should have an RCA strategy of exactly how you will handle defective furniture products with your supplier. Don’t have an RCA strategy? Follow the steps I’ve outline below to help you;
  • Problem Recognition and Definition – Acknowledge and define what your furniture’s production problem is.
  • Identify the causes – Go through the process of cause identification. The trick here is to not spend too much time brainstorming or mind mapping. This needn’t be a time-consuming aspect of the RCA.
  • Identify solutions – Based on your cause identification you will need to identify the best possible solutions to addressing the problem so that it does not happen again.
  • Implement the solutions – If your furniture’s quality was compromised on the production line, you would need to begin implementing the solutions that you were able to identify to prevent any future occurrences of this. The solution needs to be one that optimizes and betters your operational processes. If the proposed solution does not accomplish this, you may need to repeat the above steps to ensure you come up with something that will.
An RCA does not have to be a time-consuming strategy. What it does need to do is highlight the problems and make room for process optimization.

A FRI (Final Random Inspection) is based on sampling inspections

An FRI is a pre-shipment inspection of a small sample of your furniture. This inspection type is used to determine any quality defects that may have come from the production process. preventing product defects - Sample test.jpg A random furniture sample will be selected at this point, where they will each be checked one by one to inspect whether or not they meet the following;
  • Does it meet all of the product specifications as laid out by you?
  • How many visual defects are there?
  • What onsite tests need to be done?

Key Takeaways

The steps as laid out above should be planned and strategized over for each product category that you source. The benefits of the above inspection types;
  • They allow you to detect quality issues early on.
  • A step-by-step analysis of the root cause of the problem which allows you to make sure this problem doesn’t recur.
  • They allow room for re-communication of product specifications.
Analyse every report from every inspection type. If you are not happy to communicate this and communicate what needs to be done differently to meet your required specification. This kind of planning and strategy will see you through the production of high-quality furniture that will positively position your brand in the market place. Have you endeavoured to optimize or customize your inspection solutions? Let us know in the comments section how any of these solutions have been of benefit to your organization. If you have any inspection related questions, please feel free to get in touch with us.

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Toy Testing: How To Comply With En 71 & ASTM F963

With the strict safety and quality standards of children’s toys, there is absolutely no room for non-compliance. Compliance issues can cause potential health hazards and in some cases fatalities. Here we discuss the importance of toy testing and provide you with an exact outline of toy safety regulations and all of the most recent updates to help you avoid compliance issues, so that you can continue to produce toys of the highest quality. The toy industry is a lucrative one with “toy sales in 2015 increasing by 4% over 2014 to $87.4billion…with estimated growth expected to exceed $90 billion in sales in 2016.”

There is surely continued opportunities for economic growth and sustainable innovation in this massive industry going into 2017 and beyond.

But, the toy market, and product safety specifically, makes it a volatile one.

What happens when due diligence is left by the wayside?

41% of toys that were recalled in the EU alone were due to choking hazards, whilst chemical compositions makes the second largest recall between January 2016 and July 2017.

By looking at the graph below, you will see the breakdown of recalls over this period of time:

Toy testing regulations and compliance issues

The stats above paint a clear picture for importers to abide by toy safety compliance standards, for it is not only in your best economic interest, but also for your brand’s protection and growth.

Today, children’s toys are subject to some of the strictest safety and quality standards in the retail marketplace due to the sensitive nature of their consumer base.

The question is…

How do importers keep up with the latest news in toy safety regulations to avoid potential disasters and recalls as reflected above?

In this blog post, I seek to highlight the EU EN71 safety standards that your imported toys need to comply with. I will also highlight the latest updates of this standard, to ensure you are up to date with the latest in toy compliance.

We also look at the US standard, ASTM F963, where we will highlight the latest updates to ensure that your products are in compliance. Lastly, I seek to provide you with actionable steps to achieving compliance according to these standards and what you can do to continue producing children’s toys of the highest quality.

EN 71

The EN71 is a set of European Product Safety standards that apply to all toys, sold in the European Union. The EN 71 also forms a part of the CE directive. As an importer of children’s toys you will need to ensure that the toys you are importing into Europe are labelled with this CE mark.

This mark basically stipulates that a particular toy is compliant with the safety regulations as laid out by the European Union and its safety standard.

Here is a table of what this standard is inclusive of, but I will also highlight the ones that have been updated recently so that you, know exactly what your products need to be compliant with;

TABLE of EN71

Toy testing & safety regulations - En 71

The latest EN71 update includes

The latest children’s toy update and revision of the above table is as follows;
The CEN has published Toy safety standard EN 71-12:2016 for n-nitrosamines and n-nitrosatable substances. This standard is expected to be harmonized under Toy Safety Directive 2009/48/EC by publication in the Official Journal of the European Union (OJEU).
Major change of the new version includes this;

  • More stringent limits of n-nitrosamines and n-nitrosatable substances for toys intended for use by children under 36 months and intended or likely to be placed into the mouth of the child.
  • a modified definition for ‘elastomer’ from ISO 472:2013 (Plastics – Vocabulary, for better clarity)
  • a new procedure for the extraction process for toys and parts of toys other than balloons
  • use of porous graphitic carbon (PGC) reversed phase (C18) high performance liquid chromatography (HLPC) columns as an additional option for analysis
  • an additional set of multiple reaction monitoring-transitions (MRM-transitions) for quantification and identification

What this revision should mean for your sourcing and production strategies

This standard is applicable to the following products;

  • Toys and parts of toys made from elastomers and intended for use by children under 36 months
  • Toys and parts of toys made from elastomers and intended to be placed in the mouth
  • Finger paints for children under 36 months

Manufacturers will need to provide evidence of compliance from the supplier of these materials, before the manufacturing of these items can proceed. There may also be a random sampling after mass production for post production testing to ensure you are not in violation of the above safety regulations.

ASTM F963-16

The ASTM F 963-16, The Standard Consumer Safety Specification for Toy Safety, is a comprehensive standard that addresses numerous hazards that have been identified with toys.

Toy testing & safety regulations ASTM F963-16

 

The latest ASTM F963 update includes

  • Among the changes, the 2016 revision addresses ride-on toys with: a new curb impact requirement, a clarification of overload and stability requirements, and a strap exemption.
  • new labelling requirements for toys that have certain small coins or button batteries,
  • temperature and current-limiting requirements for lithium-ion batteries, and
  • new requirements for materials and toys that could expand if accidentally swallowed.
  • Other revisions include:

– new soaking and compression tests for magnets

– new requirements and clarifications related to microbiological safety;

– clarifications to heavy elements requirements for toy substrate materials

– revised requirements for toys involving projectiles; and,

– clarification of requirements and supplemental guidance for impact hazards.

What this revision should mean for your sourcing and production strategies

You will have noticed that all children’s toys that have been produced after 30 April 2017 needed to be tested according to ASTM F963-16.

According to ASTM F963-16 all toys that are intended for children of 12 years old and under need to be tested by a registered CPC third party testing and quality provider, who will then furnish you with the appropriate product specific CPC which declares that your product complies with the federal toy safety standard.

Suggestions for complying with these toy testing regulations

As an importer you may be feeling overwhelmed about adhering to the regulations as laid out above and while you should be doing everything you can to adhere to them, here we lay out a few suggestions of how to go about doing this;

  • You need to work towards improving quality control procedures by strictly monitoring the quality of raw materials. Do not fall into the trap of using cheaper, substandard materials. Whilst this may be appealing for cost reduction, you will be putting your brand at unnecessary risks.
  • Improving your products quality always needs to be a primary goal. Many of the new updates in regulation also stipulate the use of a third party quality provider as mandatory for your products compliance.
  • Ensure you use a third party company that is up to date with the latest in toy testing and safety regulations. This will reduce the risks of potential product recalls resulting in a bad image for your brand, but also a loss in revenue.
  • Seek new non-toxic environmentally-friendly raw materials. How do you go about sourcing your raw materials? This may step may be a little more difficult to pursue, but let’s take a look at Lego. Their blocks are made of plastic, but currently, they are investing loads of money and time into finding alternatives to plastic for their famous building blocks. It’s this kind of commitment that ensures a positive and innovative position in the market place.

Understanding the regulations and what they mean for your current sourcing strategy for children’s toys will help give appropriate direction and guidelines to your current competitive positioning in the market place.

By understanding these regulations and ensuring compliance according to them, you are able to guard yourself against potential product recalls and even potential lawsuits that could come from health and safety violations that are sadly too often found within children’s toys.

“API is equipped to meet the above product testing and safety requirements accordingly to ensure your brand’s safety and protection.”

 

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Case Study: CQI (Continuous Quality Improvement) Strategy

A CQI strategy should be adopted to provide you with a road map toward improvement of your supply chain activities. It should be designed in such a way that takes your retail brand through the process of data collection, data analysis and a continuous cycle of monitoring of activities for efficiency.In this blog post, we take a look at one of our very own retailers that experienced various supply chain complications, and what we did to help them implement an effective CQI plan that would ultimately reduce their expenses and optimise their quality systems.

A continuous quality improvement Case Study

A well known European sourcing company kept finding that 60% or more of their inspection reports failed or were declared pending. As a quality director you will know that a high pending rating slows down your decision making process and directly affects productivity rates. It was at this point the retailer decided to review the problem in a lot more detail; through the services of a third-party quality provider – API.

So, what was API’s approach?

  • We needed to quantify the difficulties that they experienced. We went and recorded all of their product defects and fail or pending reasons for their products. Our inspectors capture all available data which is then entered directly into API’s data capture system. This process allows for data analysis to be done across all inspections or per category/ supplier.CQI

What was the problem?

One of the top reasons for pending products was a discrepancy in information that was found on the shipping mark compared to that of the product specifications.

But, why were these problems experienced?

The retailer had three different coding systems, which made it difficult for the supplier and they often mixed these numbers up.

API was able to find this problem through various stages of data collection and analysis.  API then presented their finding to the management team where it was discussed how to deal with these different coding systems, and what kinds of things should be present on the shipping mark in order to minimise their current supplier confusion.

What solution was implemented?

API was able to identify an opportunity for improvement within the rules and guidelines of the retailer, and the documents were modified to help minimise their suppliers’ confusion. An opportunity was also identified to update the supplier manual to be inclusive of these new modifications, which then needed to be re-distributed to all of the existing suppliers.

As a part of the continuous quality improvement plan it was strongly suggested to consistently monitor the company’s passing, fail and pending rates in order to effectively evaluate levels of improvement as a direct result of the implementation of the plan suggested by API.

What were the results of implementing this CQI plan?

The retailer experienced great success by implementing this solution. They experienced a passing rate that remained mostly over 80% even during peak season. 

 

CQI graph

After the improvement suggestions were implemented it helped this retailer to significantly reduce their pending and failure rates. In a situation like this, it’s important to note that even though the problem was not directly related to manufacturing, it still required both the quality and merchandising team to implement the changes as suggested by API.

 

Key Takeaways

Implementing a a continuous quality improvement strategy for your retail brand is essential for production, quality and management effectiveness – without it you will be firefighting problems all along the way. As a part of your strategy you need to be answering these five questions – if you aren’t go back and make sure that you do:

How did your CQI strategy improve;

       1.  Your organisational effectiveness?
       2. Your level of customer satisfaction?
       3. Your levels of compliance?
       4. Your organisational culture?
       5. Your organisation’s documentation?

If you cannot answer those questions definitively you may need to reevaluate your strategy to be more inclusive of addressing them.

Let us know in the comments section below about how you have gone about improving your own quality systems

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check out our preventive quality management guide to get you started

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Put In Place A CQI Strategy For The Festive Season

The festive season is fast approaching and retail stores the world over are seeing an influx of people coming through their doors to purchase essential and luxury items. This time of the year is a very busy (and lucrative) time for most retail businesses, but it also presents an increase in supply chain pressure and demand that can lead to unsatisfied customers if quality becomes an issue.

Quality should most certainly not be a seasonal prerequisite for your brand.

It’s of vital importance that you have a continuous quality improvement (CQI) strategy in place to ensure you have a road map for success to ensure that you deliver, even more so when your supply chain pressure is on.

In this blog post, we look at why you need an improvement strategy, and we will also touch on the seven quality management principles and how they serve as the path to better quality for you, all year round!

Why You Need A CQI Plan For Your Retail Brand;

A CQI plan is meant to form a road map to improving your production activities, which will positively impact your production outputs. It should be designed to take your retail brand through the process of monitoring, data collection and analysis as a part of your daily activities.  

So what Tools Are Commonly Used for improved quality processes?

These tools are not used in isolation of one another, and a lot of the time the tool you choose to select will be situation specific, so you may use a combination of the below mentioned tools;

  • Check Lists – This will need to be prepared ahead of time, and you should look at creating a template and update it regularly. It should be used to collect and analyse all kinds of data relating to your production procedures and operating systems.
  • Brainstorming – This enables a creative environment where ideas are shared in a large group. The key here is to ensure there is no judgment as this will hinder the creative process. The point is to uncover any hindrances to your production process, aCQI strategy and the quality management principles nd this tool should be inclusive of all levels of employees for creative and productive inputs.
  • Benchmarking – Oftentimes benchmarking against industry standards such as ISO 9001 is used in order to compare how your quality systems are lining up accordingly. You need not only benchmark against an industry standard, but if you wanted to you may also benchmark against your competitors.  
  • Root-Cause Analysis –  This is a continuous improvement strategy that is often adopted to get to the root cause of a problem and seeks to permanently eliminate that problem from ever recurring again. There are a number of techniques that can be used as a part of your RCA strategy, and it will be up to your unique situation as to what tool you select.

These tools are only a few of what’s in the arsenal of techniques that can be used to implement a sound improvement plan. You need not only select one tool, you can mix and match to ensure that you find what works best for you.

The 7 quality management principles integral to your CQI plan;

If you are successfully adopting a quality management system, which I shall be bold enough to say that you should be, then you will know that an improvement approach is integrated into each principle of the most popularly used Quality Management System – ISO 9001. So let’s dive into what these principles are;

QMP 1 – Customer focus; How well are you meeting and exceeding your customer’s expectations? Your brand will need to work towards sustained confidence from your customer base

QMP 2 –  Leadership; The creation of unity and purpose with the engagement of employees at all levels will be crucial to how well you are able to align your strategy, quality policies, and production processes to achieve quality objectives.

QMP 3 – Engagement of people; By involving all people at all levels of your organisation you will create opportunities to effectively and efficiently achieve your quality and production objectives.

A CQI strategy for Improved product quality

QMP 4 – Process approach; A consistent approach to your organisation’s interconnected systems and operations produces a set of production results; in understanding how your production results are achieved you are then able to optimise your systems accordingly, ultimately improving your production performance.

QMP 5 – Improvement; Continuous improvement is essential for your organisation to maintain exceptional levels of performance. An improvement focus and strategy allows you to react to changes more efficiently.

QMP 6 – Evidence-based decision making; Decision-making should always be based on evidence and data analysis, this approach is more likely to produce your desired results and outcomes.  

QMP 7 – Relationship management; Successful production of your household goods can often come down to the way in which you manage your relationship with your supplier. Let it be open, communicative and collaborative. This approach has had more success when it comes to that increase in retail supply chain pressures.

These principles are the underpinning guidelines of the ISO quality management systems. When applied correctly they are able to take you towards that continuous performance improvement approach for your entire supply chain.  

The Benefits of Adopting A CQI for your Retail Brand

There are a number of benefits of adopting a continuous quality improvement strategy for your retail brand, ones that should not be ignored if you are to remain a competitor in the retail marketplace.

  • Reducing the number of quality errors – It will help you analyse available data, identify any areas for improvement, or any already existing production problems which will in turn reduce the number of quality errors that arise in your supply chain.
  • You increase your supply chain adaptability – It will ensure that when problems are identified your supply chain knows and understands the changes it needs to make in order to optimise for supply chain efficiencies.
  • Increased productivity – It will enable you to identify existing or potential problem areas within your supply chain, and once identified, you will be able to implement the solution which will increase your productivity outputs.

Key Takeaways

As the festive season has arrived and retail pressures are beginning to surmount to what seems like you will never get through it, rest on knowing that everything you have implemented up until now will work in your favour.

Your own continuous quality improvement strategy should include;

  • A variety of tools and techniques; such as brainstorming and checklists
  • You will also need to intimately understand the 7 quality management principles if you are to implement a successful strategy
  • If you are questioning why, don’t; there are production and quality benefits as well as those much needed bottom line benefits.

If you have not implemented a continuous quality improvement strategy before enlist the above knowledge in order to implement the appropriate quality management steps needed to ensure that only quality products reach your consumer; product defects and recalls are every retailers nightmare, with over 2000 children’s toys declared unsafe in the EU in 2016, but a successful strategy will make sure that Santa pays you a visit too.

What continuous quality improvement strategies have you implemented in the past that have proved full proof especially as we enter into the festive season?

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Why Every Company Should Use Environmental Auditing

Manufacturing in the 21st Century has brought about some ugly truths about the way in which many retail brands produced their products, from the amount of CO2 emissions released to the way in which manufacturers dispose of waste. Today, environmental auditing is not a mandatory practice for retail brands, so is it even necessary? 

At API, we believe that ethical brands are the most perfectly positioned to meet the increasing demands of consciously aware consumers today.

Your brand’s social and environmental standings plays a bigger part in the heart’s of consumers the world over than ever before. We have created a visual guide that takes you through:

  • What an environmental audit is
  • Why you should adopt an EMS
  • Complying with ISO 14001
  • Types and scope of environmental audits
  • Essential pre-audit/post audit activities 
  • Key benefits for your brand 

 See why an environmental quality audit is essential for your brand below:

environmental auditing

So Why does your brand need an environmental audit?

  • It ensures legislative compliance
  • It reduces your environmental impact.
  • It reduces your water and energy usage
  • It has positive implications for your brands image and your bottom line

An audit such as this will have long term benefits for your retail brand as well as ensuring a competitive place in the market.

 Click below for more on how you can get started with your audit today! 

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2 Root Cause Analysis Techniques To Improve Quality

As a Root Cause Analysis (RCA) is a continuous improvement strategy used to identify the drivers of a problem, it serves the purpose of eliminating that problem from ever recurring again! But, how is this achieved? There are a number of RCA strategies that technical auditors can adopt to identify and eliminate the problem. In this blog post, I seek to take you through a tried and tested technique that many organisations adopt. So let’s dive in; Getting to the ‘root’ of the problem It is important to note that a root cause analysis should not be a once off thing that you implement in the odd major defective production case. You should have a Risk Assessment/Risk Management strategy that integrates RCA to exactly how you will diagnose non-conformities in your production process and handle your resolution process. 2 Root Cause Analysis Techniques for an improved quality audit The premise of every RCA can be defined as this;
  • Problem Recognition and Definition – You will need to acknowledge and define what your retail production problem is.
  • Identify the causes – You will need to go through the process of cause identification. The trick here is not to spend too much time brainstorming or mind mapping; this needn’t be a time-consuming aspect of the RCA.
  • Identify solutions – This step is based on your cause identification. In this step, you will need to identify the best possible solutions to addressing the problem so that it does not happen again.
  • Implement the solutions -If your products quality were compromised on the production line, you would need to begin implementing the solutions that you were able to identify in the previous step to prevent any future occurrences of this. The solution that you select needs to be one that optimizes and betters your operational processes. If the proposed solution does not accomplish this, you may need to repeat the above steps to ensure you come up with something that will.
An RCA should not be a time-consuming strategy. What it does need to do, is highlight the problems and make room for process optimisation.

So Who Conducts A Root Cause Analysis?

In a nutshell, the above is how an RCA would be performed, but who conducts them? This is a good question, especially if you are outsourcing your quality audit solutions to a certified third-party organization. Usually, your RCA is performed internally. Your factory manager can go for RCA training or a third-party organisation like API can deploy a trained quality auditor who will be able to assist you as you go through the RCA process. Can RCA’s Improve Quality Performance Results? Yes, they can improve your audit results, as your organisation is taking the onus to identify a recurring problem, analyse that problem to ultimately eliminate that problem, thus creating an improvement culture for your brand. The primary benefits of an RCA can have for your organization include this;
  • It provides a learning process to better understand the cause and effect of various solutions.
  • It provides a logical approach to solving your production problems through already existing data.
  • It can reduce your risk.
  • It will prevent recurring problems.
  • It will improve overall production performance.
  • It will leads to more robust quality management systems.
Through RCA an diagnostic you will be able to instil a continuous improvement system for your organization, where you will be able to reap the benefits of a well run production line. Let’s take a look at two popular RCA techniques and how you can go about performing them for any production problems that you may be facing.

The 8 Disciplines Problem Solving Technique

This problem-solving technique is used to identify the root causes of potential problems or nonconformities in your production process. It was developed and used primarily by the Ford Motor Company in the 1980’s for the above reasons; to identify and solve recurring production problems. This technique is not just for the automotive industry, but has proved itself useful for a diversity of industries. Many quality auditors undergo training to enable them to perform problem-solving techniques such as the 8D. The 8D technique is mainly focused on areas like safety equipment, factory procedures, factory flow, out-of-spec parts, logistics and any other concerns that may be a danger to workers. Let’s dive into how you can perform this technique; Defining the 8D Technique **Scenario – 2700 chairs were recalled last year because of fall hazards that were due to the breaking or bending of the leg. The CPSC found that structural frame of the upholstery chairs was missing a support block to the leg, which was against the original design specs. As I am sure you are aware – this is quite a problem, one I am sure your brand does not want to repeat. So let’s go into how you can adopt the 8D technique to solving a production problem such as the above; Create a team – You will need to establish a team with the appropriate the product and process knowledge. So this may be anyone who was in the factory, or even the QC manager as he may not have relayed the product specs correctly? Describe the problem – With your team you will now need to describe the problem in as much detail as possible using the who, what, where, when, why, how, and how many questions. These questions will enable your team to quantify the potential problem at hand. We know that 2700 chairs were recalled, you now will begin to uncover the reasons behind this. Implement and verify containment action – Once you have described and identified the problem you will need to contain those problems. How will your organisation prevent a massive recall like this in the future? Identify the root cause – Now you will need to identify all potential causes of the problem and question why it was not identified earlier. This process will come up with more than one cause, and each will need to be proved through some thorough brainstorming. Formulate and verify corrective actions – Based on the above findings you will need to define and implement the appropriate corrective actions.  2 Root Cause Analysis Techniques for an improved quality audit - Risk assessment for an improved quality audit Correct the problem and confirm the effects –  Based on the findings of the above steps, you will need to ensure that the cause of the problem is removed and you will then need to supervise the effects this may have on your future production process. Prevent the problem from recurring – As the 8D technique is a continuous improvement technique, you may need to revisit and amend the management systems and/or operating systems, practices, and procedures to be sure that your root cause has been removed and the problem will not recur. Congratulate the team – This is an important step as your team will have spent a lot of time reflecting and analysing each production step to the benefit of your brand. Acknowledge and recognise them for their efforts and thank them individually.

The Five “Whys” Technique

This problem solving technique is simpler in its approach and you may find that you need to adopt a more structured technique for more complex situations. In saying that, there are many organisations that adopt this technique for the above reason, as it is simpler and maybe less time consuming than others. This problem solving technique was devised in the 1930’s by Sakichi Toyoda, the founder of Toyota Motor Corporation, where it gained its popularity in the 1970’s helping to solve common production problems. This techniques is designed to ask “Why” five times. If we take an example such as this;  “We cannot assemble this product”.  Then a trained quality auditor would ask: Why? One part is too long or too short Why? The machine that cuts this part works inconsistently Why? One adjustment is loose Why? A lock nut is missing Why? The maintenance manual does not mention this lock nut In its simplest form we would have identified that the problem lies within the instruction manual – The manual can then be updated to include the problem of the lock nut.

Key Takeaways

Production problems are a struggle, but there are many ways in which these struggles can be avoided and prevent potentially costly recalls for your brand. In this post, we looked commonly used problem-solving techniques that will ensure a smoother production process for your retail brand. These root cause analysis techniques are designed to incorporate a full team approach to identifying the root-causes of any production problem you may be facing, and successfully eliminating them together to achieve greater production success.
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A Factory Quality Audit Checklist To Assess Your Suppliers

Household goods manufacturing and supply chain operations are often vulnerable to compliance and regulation violations. With the pace at which the many complex parts of a supply chain can move, it’s no wonder that retailers who trust too willingly in their suppliers can land up in hot water when things don’t go according to plan. The only way to address these challenges head on is by conducting a quality audit. Discover our factory quality audit checklist that touches on quality management, social and environmental compliance here. An audit of your supplier’s factory is conducted to ensure that your supplier and their factory’s operations are able to produce your product to your expected levels of quality, as well as ensure compliance in your product’s destination market. This is not the only reason though… Carrying out audits also help to assess the risks that may be present with a particular supplier and provide direction on how you can go about managing that risk. Ultimately, the decision to work with a particularly supplier will be up to you, but your decision will at least be based on a trusted risk assessment with a presented improvement strategy. Our checklist takes you through a what a brief assessment of your supplier’s quality systems would/should look like. We will cover 3 main sections in this checklist:
  1. Quality Assurance & Technical Questions
  2. Social / Health & Safety Questions
  3. Environmental Audit Questions

How Does A Quality Audit Grading System work?

For each checkpoint, the following guideline should be used; N/A – Checkpoint not available or not evaluated. 0 – Major non-conformity – absence of procedure or proof of big discrepancies in implementation – a corrective action will be designed for this checkpoint. 1 – Minor non-conformity –  incomplete procedure or proof of discrepancies in implementation – a corrective action will be designed for this checkpoint. 2 – Acceptable –  procedures are available and implementation is acceptable, however opportunities for improvement exist – an opportunity for improvement can be designed for this checkpoint. 3 – Good – procedure and implementation acceptable, no opportunity for improvement identified. 4 – Best Practice – factory has designed and implemented best practice of industry.

Quality Assurance & Technical Questions

a factory quality audit checklist 1WHAT TO LOOK OUT FOR:
  • Quality manual and all procedures show revision control (sign-offs & dates), history of changes
  • Product quality yield data, problems and corresponding improvement actions, status of preventive/ corrective/audit results
  • Strategic and tactical objectives, goals, action plans, etc.
  • Analysis of field failures, inspection yields, resource needs, internal audit results, corrective action status, etc.
  • Management review meetings, goal setting, performance measurement, internal audits, action plans, customer surveys
  • Employee involvement/recognition program, Lean, Six Sigma, kaizen, SPC, 5-S, cost reduction programme
  • Corrective actions, trend charts, meeting minutes, non-conformance frequency & cost analysis
  • Management review meetings and corrective actions
  • Look for use of training aids and work instructions at work stations
  • Qualification records, certification history
  • Records of testing, production quality records, audit records, interview workers to validate training records
  • Job descriptions, job skills assessment, training records, training manuals

What if my quality assurance score is below standard?

API is able to customize its QA solutions based on your specific needs and requirements. API will provide the supplier information on how they can go about improving various things within a factory. This information will be relayed back you, the retailer, where you will gain insight into your potential supplier and their factory operations to ensure compliance across the board.

SOCIAL / HEALTH & SAFETY QUESTIONS

A factory quality audit checklist 2

What to look out for:

  • Procedure for training and communication and participation
  • Emergency preparedness and response plan, monitoring and performance measurements
  • Policies and procedures, health and safety trend charts, accident rate improvement history
  • Safety committee or group meeting minutes, accident investigation reports, safety audit reports
The social audit assesses the social systems and structures that your supplier has in place and is normally based on the standards as laid out by the SA8000. As a professional third party auditing company, API is able to provide their industry expertise and long time experience to aid you in achieving your social compliance certification.

Environmental Audit Questions

a factory quality audit checklist 3

What to look out for:

  • Environmental policy statement document
  • Records of agency/government inspection, procedures for measuring and monitoring environmentally sensitive activities
  • Record of purchases, waste stream and consumption; inventory control procedures
  • Records/use of; non-hazardous (RoHS/WEEE compliant) materials in production, biodegradable materials, returnable containers or packaging, recycling program, packaging materials made of recycled materials

Key Takeaways

A factory quality audit checklist allows you insight into your suppliers quality control processes and manufacturing capabilities, their strengths and weaknesses. This empowers you to strengthen those weaker processes where needed. A quality audit checklist will help ensure:
  • your factory’s quality systems are up to date, organized and well recorded.
  • confidence in the selection of your supplier based on checklist insights.
  • confidence in the quality of the product that is manufactured.
  • confidence that compliance standards are actively being met by your supplier.
This approach allows you to build a more collaborative relationship with your supplier, where you supplier has a more invested approach to your brand and its product. It helps to ensure top class quality systems and a mutually beneficial relationship between supplier and retailer.
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3 Types of Factory Quality Audits Your Retail Brand Needs

Many retail brands today are littered with non-compliance, human rights and environmental violations. These organisations find themselves at a loss on how to handle this kind of supply chain complexity risk. So, how can your brand prevent all of this? Factory quality audits. These quality audits aim to identify, eliminate and reduce supply chain risks for your retail brand. They also offer continuous improvement strategies to allow for constant growth, awareness and a strategic competitive position in the marketplace. In this blog post, we explore the different kinds of quality audits that third-party quality providers can offer you, so let’s dive into what each audit can provide you with and what the benefits will be for your brand.

Technical Audit

Let’s begin by defining what a technical audit of a factory is; This is the process of evaluating and assessing your factory’s technical capabilities; whether or not they have a quality manual with all its quality systems defined from organizational structure to assessing whether or not a factory has any internal audit and inspection procedures. This audit will also assess the factory’s layout and whether or not there is scheduled regular maintenance and calibration of machinery. This audit is typically based on the guidelines of ISO 9001: 2015, which is an internationally recognised standard to ensure an efficient quality management system (QMS) of your chosen factory. The latest update has meant that the standard is more performance focused, and this is done by merging a process-based approach with risk-based thinking and adopting the Plan-Do-Check-Act cycle. ISO 9001 - Techincal Quality Audit According to the guidelines as laid out by ISO 9001:2015, they are roughly categorized into eight sections; five of which are mandatory for the QMS of your factory;
  • Requirements for a quality management system
  • Management responsibility
  • Resource Management
  • Product Realization
  • Measurement, analysis, and improvement of your QMS
Clauses one to three are not requirements, but are informative about the scope of this standard references to help understand the standard better, and terms and definitions that you may need to aid in the adoption of this QMS. What are the objectives of a technical audit? The objectives of hiring a third-party auditor to assess the quality management systems of your factory would be this;
  • To assess whether there is an effective and efficient QMS of the factory.
  • To assess whether or not this factory is able to meet your production requirements.
  • This audit will assess the potential risks you may be aligning yourself with.

Social Audit

The SA8000 was established by the Social Accountability International in 1997. Over time this standard has become a reliable framework that many retail brands and organisations adopt to eliminate human rights violations from their supply chains. Looking back at the sweatshop claims against Mattel in 2011 for its use of child and forced labour, not to mention illegal amounts of overtime that were agreed to under the table, these horrific situation still need to continuously be eliminated from today’s retail supply chains. Social quality audit The SA8000 framework can measure the social performance of an organisation in eight different areas; this is rooted by the management system element that can drive continuous improvement in all areas. This standard is valued for its meticulous approach to achieving certain levels of social compliance. The 9 SA8000 social compliance requirements are:
  • Child labour – No children younger than 15 years of age may be employed by any factory, as we can tell in the case of the above factory, this was not the case.
  • Forced labour – No person may be employed by a factory if they haven’t offered to do so voluntarily.
  • Health and safety – A safe and healthy workplace environment must be provided by the factory, who should also prevent any potential health and safety incidents and work related injury or illness from occurring. You would need to ensure that there is sufficient personal protective equipment (PPE) within hard-labouring factories.
  • Freedom of association and collective bargaining – All staff have the right to form, join and organize trade unions and to bargain collectively on their behalf.
  • Discrimination – A factory is prohibited from engaging in discrimination in hiring, remuneration, access to training, promotion, termination or retirement.
  • Disciplinary practices – A factory is prohibited from engaging in or tolerating the use of corporal punishment, mental or physical coercion or verbal abuse of employees.
  • Working hours – A factory must comply with applicable laws, collective bargaining agreements and industry standards on working hours, breaks and public holidays.
  • Remuneration – The right of staff to a living wage must be respected by the factory.
  • Management systems – Compliance must be reviewed and implemented to the SA8000 standard through developed policies and procedures.
If child labour is found within your supply chain, it results in an immediate audit failure! You need to ensure that your supplier complies with the requirements of SA8000 so that you can eliminate potential areas of risk that may be present in your supply chain. Once you receive your audit report, based on the findings, your supplier will have time to rectify any mishappenings, and this will then usually result in unannounced visits to assess whether any improvements have taken place. Key Benefits of a social compliance audit for your retail brand
  • Compliance according to the SA8000 framework will prove that your brand is committed to social accountability; from treating your employees fairly to ensuring compliance with minimum wage requirements.
  • It will by nature continuously improve the efficiency of your supply chain.
  • If your organization aims to operate internationally, this standard will stand you in good stead for any international tender.
  • This standard will ensure that you are globally compliant and that you reduce and manage risks accordingly.
  • This standard will also provide brand protection for your organization.

Environmental Audit

An environmental audit will assess whether or not your factory complies with environmental regulations; this will often be based on the ISO 14001: 2015 standards which are an internationally recognised family of standards. I want to go back to the above factory that was producing toys for Mattel; in the undercover investigation it was found that hazardous chemical products were used in the production process, but factory workers were told to hide them when auditors came in. Environmental quality audit There are many concerns with regards to a situation as the above 1. The chemical usage in the toys would likely not have met international regulation. 2. Hiding violations from an auditor only aids non-compliance and illegal production processes. 3. How are these chemicals affecting factory workers? How are they stored? How are they disposed of? The environmental audit procedure seeks to uncover the above issues, with the ultimate goal of eliminating those kinds of violations and ensuring a clean and well-managed supply chain. An environmental audit such as ISO 14001:2015 will assess the following;
  • The legal requirements according to the substances that are being used which would along with risk assessment document.
  • An audit would assess whether the factory has an existing Environmental Management System (EMS) in place.
  • An audit would assess the solid and hazardous waste situation of the factory and whether or not they have an appropriate procedure in place for the disposal of waste.
  • An environmental audit would assess waste water disposal, how and where you are disposing this waste water, this is often paired with waste water testing to know what kinds of chemicals are present that could potentially be damaging to nearby water canals.
  • An audit will also assess the CO2 emissions of your supplier’s factory.
  • An audit will assess the amount of energy and water that your supplier’s factory uses.
See the checklist we created on the types of questions an auditor may ask when visiting a factory. This would be coupled with the observation skills that a professional auditor would possess. **TIP The above audits assess your factory’s current operating procedures. It must be said that it is not uncommon to find a factory that complies with everything we have mentioned up until now. The key is to understand that these audits aim to highlight any major risks, but that upon receiving your audit report you will also receive continuous improvement suggestions, to aid your factory in achieving compliance and an excellent social and environmental rating.   So you may be thinking, that’s great I know what they will assess, but what are the felt benefits of an Environmental Audit? Good question, let me tell you why you need an Environmental Audit;
  1. It ensures compliance with international regulation.
  2. It encourages better environmental performance of suppliers.
  3. It reduces environmental impact.
  4. It reduces costs through a lower environmental impact.
  5. It provides a strategic competitive advantage for your brand.
So I pose the question to you – are you ready for an environmental audit?

Conclusion

Retailers today often only consider one or two of the above quality audits, but as consumer behaviour has shifted, you may want to consider being certified according to all three international standards. This would ensure that your organization achieves a strong competitive position in the marketplace. So let’s take a quick re-look at the benefits these can have for your brand;
  1. These audits will ensure compliance to international regulation
  2. These audits will provide a continuous improvement strategy for your supplier.
  3. These audits will ensure a well organized quality management system for your supplier.
  4. These audits will reduce your costs.
  5. These audits will strategically position you in the marketplace.
The insights of the above quality audits should provide you with enough information to decide on how you should manage specific supply chain risks. These audits aim to eliminate many of the common supply chain violations found and ensure the optimisation of your quality systems.

dive into our visual guide to show you why your retail brand needs environmental auditing today!

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What Are The Common Reasons For Quality Audit Failure?

Unethical or morally gray manufacturing practices are not uncommon for many factories across the globe, most commonly situated in third world or developing countries, for their cheaper manufacturing options. The figures, from the UN’s International Labour Organisation (ILO) and the Walk Free Foundation, show 24.9 million people across the world were trapped in forced labour for 2016. These cheaper conditions translate into unregulated conditions with little to no regulation and monitoring of working conditions, most of them horrific. These situations have lead to an increase in monitoring and auditing solutions to try and regulate the some of the terrible working conditions that many retail brands have been susceptible to over the years. Despite this, there are still many that fail to meet certain international standards and regulations put forth, making it absolutely necessary to know just what you need to avoid! In this blog post, we dive into some of the most common reasons that households goods suppliers fail their quality audits and what you can do to make sure your retail brand doesn’t fall into this pool.

Technical Failures

A technical audit is used to evaluate and assess a factory’s existing quality systems from policies and organizational structures, to the defined roles and responsibilities of the factory’s staff. So what are some of those common reasons a supplier may fail their technical audit? Disorganised documentation – As mentioned above, your supplier’s quality policies, records, reports and all documentation will be reviewed. Many factories often run on outdated systems like old excel spreadsheets, which opens your brand up to human error and potential risks that can be avoided. Without adequate reporting procedures or quality policies, the likelihood that your production requirements will be met, according to specification and in compliance with its destination market, will often not be the case if you choose to work with a supplier that has undefined and disorganized systems. Calibration and Upkeep of Machinery and Equipment – Many factories are dotted between third world and developing countries. There is a reason why Europe and U.S.A prefer to source abroad. It is often a lot cheaper than what they can find within their own borders, but that does not come without its own set of challenges.   Calibration of machinery in quality audit Many factories struggle with resources and finances, which means their money will often go into sourcing raw materials for the next production before putting money into the servicing of their machinery and equipment. This will mean that when an auditor comes to inspect the factory and its layout that the machinery is often out of calibration or filled with too much oil, which can contaminate your product and potentially places your brand in a risky position. Not ideal.

Social Failures

A social audit assesses the social systems and structures that your supplier has in place. Social compliance audits are always in line with the standards as laid out by SA8000; Child labour – Many social audit failures arise from being socially non-compliant with child labour causing an immediate “zero tolerance” failure. This is a serious violSocial Compliance in a quality auditation. If this is discovered during your audit process, it is recommended to rather find a different supplier. There are no grounds where this is acceptable. Hazardous working conditions – Hazardous and unsafe working conditions are not unheard of in many third world factory’s across the globe and are often the cause of factory technical audit failure. Things like faulty Personal Protective Equipment (PPE), expired fire extinguishers, no clearly marked exit signs, exits not in working order, machinery that is in need of calibration or lack of safety gear found on heavy machinery can lead to audit failure. These safety violations are easy enough for your supplier to address and solve, so bear this in mind upon receiving audit results as you will often need to factor in corrective time for your supplier. Panasonic and Sony have been caught in supply chain scandals, which have created immense amounts of bad media coverage for the global electronic brands. They have been accused of unfair labor practices in factories, vastly underpaid staff and electrical components that are said to be sourced from parts of the world known to be inclusive of child slave labour.

Environmental Failures  

With regards to ISO 14001, while it’s not a mandatory compliance standard, it is a little more complex to navigate because of this. But as the rules of engagement in retail have shifted into the hands of the consumer, retail brands are forced to rethink the application of this standard within their supply chain. Consumers today, are interested in reducing their environmental impact on the planet and your brand should help them do just that. How you ask? By complying with the guidelines of ISO 14001:15 – In saying that what are some of the common reasons many factories fail environmental audits? Incorrect methods of waste storage or disposal – This is often a problem as many factories do not have the capability or facility to dispose of their waste correctly. If your factory disposes fumes into the atmosphere or disposes untreated water into sewerage systems, it is considered to be an environmental risk and grounds for audit failure. Often a certified third-party waste disposal company will need to come and collect your waste to ensure that is disposed of correctly; your supplier can receive certificates, stating correct disposal as well. Environmental Quality Audit Let’s take a look at how this could play out; Wal-Mart paid a criminal fine of $11 million and another $3 million to the Missouri Department of Natural Resources, for violating the Clean Water Act by illegally disposing of hazardous waste materials. This is a serious violation and a costly one at that, environmental violations are not taken lightly so bear that in mind as you proceed.  

Conclusion

Understanding the most common reasons for quality audit failure allows you insight into the kind of supplier your brand should be aligning itself with. These audits are complex (especially the social and environmental audits), and it is up to the observation skills of your chosen auditor that will determine the level of compliance that a supplier meets. The audit report that your retail brand receives will present you with a full picture of all the risks a third-party auditing company is trained to see. It will be up to you to make a final decision, bearing in mind the authoritative position consumer’s today are in, by putting your customers first and producing products in an ethical manner, you automatically put your brand first.

Let us know in the comments section if this has been helpful information for you.


Ever wondered whether environmental auditing was for you? Check out our visual guide to help you on your way!