Most retailers in Europe, US and Australia require their supplier's factories to be audited before starting any business or before placing an order.
The objective is to understand in a bit more detail about the wood factory in terms of its capacity and capability to produce the goods to be purchased. Buyer needs to secure that the supplier is good in terms of financial, technical capabilities, factory legality, worker health & safety, and how the factory management plan about factory's environment. Audits can be carried out by retailer internal teams or third-party auditors who have certain knowledge and experience. The audit is carried out in several stages or at different times according to the type of examination to be carried out. Top priority usually includes a new technical audit followed by a social or environmental audit, depending on the retailer's needs.
Technical Audit
The audit is focusing on the technical aspects of a factory. These are include the checking on the production space or buildings, types of equipment and machines availability, technological advances used, experience of the workers in the production process, quality of production goods, maintenance of machines, and other technical aspects that have a direct impact on product quality.
Social Audit
The auditor will focus on examining social conditions, especially for workers and other employees in the factory including HR management, the procedures for paying salaries, overtime works and payment, freedom of opinion or unions, work safety measures in the factory, health care for employees including prevention procedures, and dormitories for workers employees (if available).
The two types of audits above are minimal requirements from retailers. Some buyers, and depends on their internal policy may will combine these audits into one report.
Environmental Audit
In fact this audit is rarely implemented in a wood factory unless the buyer's special request. Environmental audits are more common in food and cosmetic manufacturers. Or if the factory activities have a large impact on the environment. For example, a textile factory, a paint factory, or a used goods processing factory.
It will prioritize the overall impact of production activities and wastes on the environment, such as air pollution, ground contamination, noise pollution, and handling of water waste and hazardous materials from factories.
Wood Audit
An example of a wood audit is when a wood processing factory (furniture or artificial board) wants to have an FSC (Forest Stewardship Council) certificate. All wood supply chain activities by the factory will be detailly verified through several inspections. From the terms of purchasing raw materials, organization of components in the factory, until the finished products leave factory.
Basically, a wood audit is done with aims to ensure that the wood supply chain from raw materials to finished goods are all connected and clear traceability.
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