Detecting Unauthorized Subcontracting in Cross Border Supply Chains
Detect unauthorized subcontracting by reconciling raw material mass balance against electrical draw telemetry and conducting unannounced floor tooling audits.
Factory Gate Audit
Meaning
Physical inspection protocols conducted at the point of departure for finished goods ensure that the shipment matches the purchase order and quality specifications. A factory gate audit involves checking the count and packaging of products before they are loaded onto transport vehicles. This final check prevents the export of defective items and reduces the likelihood of costly returns or disputes with the buyer.
Cargo Verification
Inspectors randomly select cartons to confirm that the contents are identical to the approved samples. During a factory gate audit, the weight and dimensions of the pallets are measured to verify that they correspond to the packing list. If the inspector finds any discrepancies, the entire batch may be held for a full re-examination.
Documentation Review
Export licenses and quality certificates are checked to ensure they are valid and belong to the specific goods being shipped. The factory gate audit includes a review of the bill of lading and the commercial invoice to confirm that all regulatory requirements for the destination country are met. This step is necessary to prevent delays at customs and to ensure that the buyer has all the necessary paperwork for clear title.
Security Measure
Sealing the containers with tamper evident devices after the inspection protects the integrity of the shipment during transit. The factory gate audit provides a definitive record of the condition of the goods at the moment they leave the supplier’s control. By recording the seal numbers and the time of departure, the auditor creates a chain of custody that can be used to investigate any damage or loss that occurs between the factory and the final port.