Factory Vetting Guide

Vetting is elimination, and the order of the checks is most of the skill. Twenty candidates should become three before anyone books a flight, commissions an audit or pays for a sample — because the checks that cost nothing disqualify more candidates than the checks that cost thousands, and they disqualify them for better reasons.

The reason to be systematic is an asymmetry: the cost of a check and the cost of the mistake it prevents have nothing to do with each other. Confirming that the company on the quotation owns the factory takes an afternoon; discovering otherwise after a deposit has moved takes a quarter.

Why vetting is a funnel and not a checklist

A checklist run top to bottom spends the same effort on the candidate you will reject in ten minutes as on the one you will produce with for five years. A funnel spends effort in proportion to how far a candidate has survived, ordered by cost per candidate eliminated.

Each stage is built around something you are trying to disprove, not confirm. "Can this factory make my product?" invites a yes from everybody you ask. "What would show me it cannot?" has answers: no machinery for the defining process, no comparable product in its recent output, an inspector who reports to the production manager. A stage that cannot be failed is not a stage — so decide in advance what would end the conversation, and what you will do when the evidence is missing rather than bad. Missing is the commonest result and the easiest to explain away.

The five stages

Screen, qualify, verify, validate, monitor. The sequence is ordered by what each stage costs per candidate it removes, which is why the only stage that spends real money sits fourth.

Stage 1 — screen

Screening is desk work, it is free, and it should be ruthless: you are deciding only whether a candidate deserves an hour.

• Screening: what to establish before spending an hour
• A registered legal entity whose name matches the quotation, the email domain and any bank details.
• A manufacturing site with an address, distinct from a sales office in another city.
• Recent output in your product category — not the category next to it.
• A named person who answers technical questions, rather than a channel that answers commercial ones.

Two results deserve more weight than they get. A mismatch between names — certificate holder, test report holder, invoicing entity and factory should not be four different answers — makes the explanation the interesting part. And silence: a candidate who will not answer a direct technical question has told you how the relationship will run. Finding candidates in the first place is a separate problem, and a wide funnel only helps if you close it quickly.

Stage 2 — qualify

The best qualification tool is your own specification. A candidate handed a real tech pack — materials, construction, tolerances, tests, packing — either asks precise questions or does not, and the questions are the qualification. Untroubled enthusiasm about any product at any volume is itself a finding.

• Which critical processes run in this building, and which are subcontracted? Get the subcontractor named.
• What comparable products has this site made in the last year, and can you see one?
• What machinery does the defining process use — the seam, the joint, the finish, the tolerance that fails first?
• Who inspects, who do they report to, and what happens to product they reject?

Stages 3 to 5 — verify, validate, monitor

Verification is skipped most often, because collecting documents feels like verifying them; the sections on certificates, audits and references below are the substance of it. Validation then buys what no document can: evidence about behaviour. Pay for the sample — a free sample is a sales tool, made by the best people in the building with no deadline, while a paid sample against a written specification with a date attached is a small production run. Read the result twice, once for the object and once for the process: did they ask before assuming, flag the substitution or bury it, arrive when they said? It is also where the controls that govern the whole relationship get written — manufacturing quality control covers them, and they belong in place before bulk.

Factory or trading company, and when the trading company is the better partner

Trading company

A company that sells manufactured goods it does not make, buying from one or more factories and selling on under its own name. It may add design, quality control, financing, consolidation and export handling — or it may add a margin and an email address.

The problem is never that an intermediary exists. It is that an undisclosed intermediary breaks the two things vetting depends on: you cannot assess a capability at a site you have not identified, and you cannot hold anyone to a corrective action when nobody will say where the goods were made. A trading company that names its factories can be vetted; one that will not, cannot. Three tells are usually enough: who holds the certificates and test reports, since a report naming a company other than the one quoting you has told you where production happens; the breadth of the offer, because a company quoting knitwear, injection moulding and stainless steel is a desk rather than a plant; and the answer to a process question, which a factory gives immediately and a broker gives slowly.

A trading company is legitimately the better partner when:

• Your product needs several unrelated processes and somebody has to own assembly of the whole thing.
• Your quantities sit below what a competent factory will take seriously, and an aggregator buys access you could not get alone.
• The best factory for the product has no export function, no technical staff in your language and no quality department.

Three fits that get conflated: capability, capacity and commercial

Almost every "quality problem" that surfaces three months in is one of these three tests that was never run separately. They fail differently, they are evidenced differently, and a strong pass on one says nothing about the others.

Capability fit

Can this site make this product to this standard, repeatedly? Capability is a property of a site and a process, not of a company. A group with an excellent plant making laminated outerwear tells you nothing about the plant across the yard doing jersey basics: machinery, operator skill and failure modes are all different. Ask for evidence from the specific building your order will run in. Skip this test and the symptom is a defect that recurs in the same place, because the process was never capable of the tolerance.

Capacity fit

Can this site make this much, on this calendar, alongside the work it already owes other people? Capacity is a question about a period, not a number: total lines mean nothing without what is already booked, and a factory genuinely free in March may be somebody else's in September. Too big for you and your order becomes filler; too small and one order becomes their whole business, which feels excellent until a delay leaves them no cushion. Skip this test and dates slip late and all at once, with undisclosed subcontracting behind them.

Commercial fit

Are the terms ones you can live with? Minimum quantity, price basis and validity, payment terms, tooling and pattern ownership, who pays for a failed inspection and the rework after it, what a lead time is measured from, and what happens when a material price moves. Commercial fit is where the cost of the decision lives rather than in the unit price — landed cost sets out what a quotation leaves out.

How to read a certificate

A certificate is a statement by a named body that a named thing met named requirements on a date. Four questions extract almost everything it can tell you, and the fourth is the one that gets missed.

1. Scope. Which site, which processes, which product categories? A scope is a boundary, and the useful reading is what falls outside it.
2. Issuer. Which body issued it, and is that body accredited for this scheme? ISO defines certification as the provision by an independent body of written assurance that the product, service or system in question meets specific requirements, and accreditation as the formal recognition that a certification body operates according to international standards. ISO is explicit that it does not itself certify anybody.
3. Validity. Is it current, and for how long? A certificate is a statement about a past assessment carrying an expiry date, and expiry dates are where diligence quietly lapses.
4. Fit. Does it cover the product you are buying, made in the building your order will run in? A group certificate held by one plant, or a certificate for the product line in the next unit, is the commonest way a genuine document supports a claim it never made.

The verification route is the issuing body, not the supplier. ISO's own guidance for a management-system certificate is to identify the certification body from the statement of certification or the mark being used, then confirm with that body — and, where the body itself is the question, with its accreditation body. Scheme databases do the same job faster: OEKO-TEX publishes a label check that confirms a certificate from its label number.

A scope certificate is not a shipment certificate

GOTS makes this distinction structural, and it generalises. A scope certificate says a site was audited and found to conform for named processes and product categories. It does not say the goods in your container are certified. That is a separate document — a transaction certificate, issued for the shipment by the same certification body, with integrity established through volume reconciliation. A buyer who wants certified goods rather than a certified supplier makes it a condition of the order.

Product certification needs the same care about scope. OEKO-TEX STANDARD 100 certifies that an article was tested against a list of harmful substances, with stricter human-ecology requirements the more intensive the skin contact. That is a statement about substances in a tested article — not about workmanship, durability or fit, and not proof that your bulk was made from the certified material.

What an audit does and does not tell you

Audit

ISO 19011, the standard giving guidance on auditing management systems and now in its fourth edition, defines an audit as a systematic, independent and documented process for obtaining objective evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled.

Three words there carry the weight. Criteria: an audit measures against a stated set of requirements, so "audited" without naming them says nothing. Evidence: findings rest on verifiable evidence, and because an audit runs in finite time, that evidence is a sample. Extent: the output is the degree of conformity, not a verdict on whether the factory is good. So the first question about any report is what it was an audit of — three different exercises get called "the audit".

Social audit programmes are the easiest to over-read, and the programmes themselves say so. amfori is explicit that amfori BSCI is not a certification: an audit produces a report and a grade rather than a pass or fail, held on its platform and visible to members and the audited supplier. Its own account of what an audit is worth is the sentence to carry — audits are "a snapshot of conditions at a specific point in time, based on on-site observations, interviews and document reviews", and while they help identify risks and areas for improvement they "cannot capture hidden or emerging risks, nor guarantee full compliance with laws or standards".

So read the report, not the grade. The audit date, the site address, the criteria and whether the visit was announced set what a grade even means, and the corrective action plan says more than the score: what was wrong, what was promised, by when, and whether a follow-up found anything changed.

Reference-taking that produces something other than a curated list

Asked for references, a supplier supplies its three happiest customers, and the calls confirm what you already believed. The fix is not to distrust the list. It is to change the questions, and to add sources the supplier did not choose.

1. Ask for references in your product category and your market: a comparable product, shipping into the same regulatory jurisdiction, at a comparable quantity.
2. Ask about a failure rather than a success. "What went wrong on an order, and what did they do about it?" Every real relationship has an answer; only a manufactured one does not.
3. Ask what changed afterwards. A supplier who fixed something durable — a work instruction, an incoming check, a jig — is a different proposition from one who apologised.
4. Ask your specific fear. If your product fails at a seam, a tolerance or a colour match, ask about that.
5. Go around the list. A freight forwarder knows whether cargo is ready when promised; a testing laboratory knows how often a first submission passes.

One further source is worth the awkwardness: a buyer who stopped working with them. A supplier who can name one and describe the disagreement without rancour is demonstrating something no reference call produces.

What you can learn before anyone visits

A site visit or a paid audit answers questions the desk cannot, and should be spent on exactly those. Everything below is available remotely, and together it eliminates most candidates.

• Remote evidence, in rough order of value
• Whether the addresses on the quotation, the certificates, the test reports and the invoicing entity agree.
• Certificate numbers confirmed in the issuing body's own database, or with the body directly.
• Audit reports in full — dates, criteria, scope, findings and corrective action plans.
• The quality of the questions your specification provokes, which is the best remote signal there is.
• A live video walk-through you direct: the machine that does your defining operation, the sample room, the incoming material store, the reject area. A pre-recorded tour shows what somebody chose to show.
• How a deliberately awkward question is handled — an impossible tolerance, an aggressive date, a contradiction in the specification.

Comparing candidates on the same terms

A small team does not need a weighted rubric borrowed from somewhere else. It needs two things: gates that are pass or fail and never scored, and a short set of scored dimensions that are the same for every candidate, with the evidence recorded beside each score. A gate is something no score can compensate for — fail one and the candidate leaves, however cheap it is.

• The legal entity is identified and matches the documents.
• Capability evidence exists for this product family, from the building the order will run in.
• Where your market or your customer requires a certificate or an audit, a current one exists, in scope, confirmed with the issuing body.
• The supplier will accept inspection, and an inspection clause.
• The commercial basis is complete enough to compare: price basis, quantity, payment, lead time from a defined event, validity date.

Then score, on dimensions chosen before you saw the candidates. The weights are yours, because they encode what your business cannot tolerate. Write them down first, use one scale for everybody, and keep the evidence beside each score so a number can be re-derived rather than remembered.

Comparable score = Σ (dimension score × your weight), over gate-passing candidates only

Meaningful only because every candidate was scored on the same dimensions, on the same scale, by people who wrote the weights down first.

None of this is an industry standard, and any source presenting a weighting as one should be read sceptically. Its only job is to make a disagreement explicit — which dimension, which evidence.

A score is never the decision: it produces a ranked shortlist people then argue about, and if the argument reveals a dimension you left out, add it and rescore everybody. Leave room to walk away — if the best gate-passing candidate is still not good enough, widen the funnel.

Vetting does not end at the first order

ISO 9001 puts monitoring inside supplier control rather than beside it: an organisation is required to determine and apply criteria for the evaluation, selection, monitoring of performance and re-evaluation of external providers, based on their ability to provide conforming processes, products and services, and to keep documented information about those activities. Re-evaluation is the word that matters. A supplier is qualified as of a date.

• On time in full, measured against the date the supplier confirmed rather than the date you asked for.
• Inspection results by defect class, and whether a lot was accepted, sorted, reworked or held.
• Rework, replacement and air-freight costs, and who actually paid them.
• Corrective actions raised, what changed in the documents as a result, and whether the next lot cleared.
• Certificate and audit expiry dates, held somewhere that generates a reminder.

Then treat a short list of events as automatic triggers for re-evaluation rather than as news: a change of ownership, plant manager or quality manager; a move to a new building; subcontracting you were not told about; a lapsed certificate; two consecutive lots outside your agreed defect limits; or a price that moves in a direction the material market does not explain. Reducing supplier quality risk covers the operational half, and the same records feed both.

A worked example, illustrative

A brand shortlists nine factories for a technical outerwear jacket. Screening removes four in an afternoon: two are trading companies whose certificates name a factory they will not identify, one has no output above jersey weight, one cannot produce a registration matching its invoicing entity. The remaining five receive the tech pack. Two return quotations with no questions at all, which is the finding; one asks three precise questions about seam sealing, which is the other. Verification removes a front-runner when its social audit report turns out to cover a different site in the same group. Two go to a paid sample: one arrives late with an undisclosed substitution of the membrane, the other on the promised date with a note asking for approval of a construction change. The trial order goes there — two samples, no travel, and behavioural evidence deciding it at every stage.

Common mistakes

• Treating a certificate as a conclusion rather than a document with a scope, an issuer and an expiry date.
• Collecting audit reports without reading the findings, the criteria or the site address.
• Running one fit test and believing you ran three.
• Vetting a company when capability lives in a building.
• Accepting free samples as evidence of production behaviour.
• Letting the funnel narrow to one candidate before terms are agreed, at which point you are no longer choosing.

The vetting checklist

• Before a purchase order
• Legal entity identified, and matching the quotation, certificates, test reports and bank details.
• Manufacturing site address confirmed, and distinct from the sales office.
• Capability evidence from that site, for this product family, from the last year.
• Critical processes mapped as in-house or subcontracted, with subcontractors named.
• Capacity confirmed for your months, with your order's rank by value understood.
• Certificates confirmed with the issuing body: scope, issuer, validity, coverage of this product at this site.
• Audit reports read in full — criteria, date, scope, findings, corrective action plan.
• References taken in your category and your market, including one failure and one former customer.
• A paid sample against a written specification, produced to a date.
• Specification, approved reference sample and defect classification agreed in writing before bulk.
• Terms complete: price basis and validity, payment, tooling, rework, delay and dispute handling.
• A monitoring record open, holding certificate expiry dates and the re-evaluation triggers.

How Library of Trade approaches it

Library of Trade is not a marketplace or a directory, and brands contract directly with the suppliers they produce with. What we bring is a network of suppliers evaluated on manufacturing capabilities, product expertise, production experience, certifications, quality history, communication reliability and capacity — and, where appropriate, through supplier documentation, factory assessments, audits and physical visits. AI structures the fragmented information vetting throws up and compares candidates on the same terms; human experts judge, negotiate and validate, because placing production is a judgement and stays one. Product sourcing sets out where vetting sits in the wider process.