Audit in Manufacturing Industries

 What is Audit?

Audit is a process of examination or revalidation of the work done other than the core owner of the that area or work done by the person. For example if you gave your car for repairing work and service center have you back the car back and you check the work of service team, it is a type of audit. Person how did the repairing work and he himself check the quality then it is not an audit but his manager or delivery team check repair work before hand over to the customer then also this process is known as audit.

Audit is on-site varification of the fulfillment of the compliance. Mostly Audit is done on-site but now a days some audit can be done online also.

Some people or institute take audit as a burdon but it is process that improves the existing process or system and eliminate any loop holes in the system.

Different type of Audit?

As per ISO 19011 there are three different types of audit, this is on the basis of what is auditing.

1. Process Audit
2. System Audit
3. Product Audit

1. Process Audit:

Before we talk more about process audit we must clear about the process, process is number of activities which takes some input and finally divert an output. 

As the name suggests process audit is an audit of the process. This type of Audit is done to check how well the process is maintained and work. It checked if all the processing condition is well prepared and all machines and process are running accordingly. Is there is any deviation from the written process while manufacturing the product. It is important, as in Industries many people are doing same job and if all do same work with some different way then the final output will never be same. Quality of output will be uncertain, so it is important that every one should follow same process of manufacturing, then there is hardly any chance of getting deviated product. 

In process audit an auditor can check or verify following points:

• Is machine is running as per define set of instructions or parameters.
• Is control documents like control chart, run chart etc are filled correctly and timely.
• Training record of the process to the employees.
• Awareness about process of the industry or function.
• Processing condition include all important critical parameters for producing the product.

2. System Audit:

System is a set of similar type of procedure or activities. System can also be define as number of similar process which define a way of working. System Audit include complete department or function or plant. Example of system audit are ISO 14001 i.e environment system, ISO 9001 i.e Quality management system, Financial system, etc. This type of Audit is conducted to check how well the documentation of the system is done. Is everything that is documented are followed and implemented. There are set of rules of a system that is followed in all the process that comes under it. System Audit is basically an audit of the management. System Audit is important all failure mode is well taken care in advance, so that there will very less risk of getting things wrong. 

During system Audit an auditor can verify following points:

• How well written manual is maintain.
• Is everyone in management is aware about the documents.
• How the changes in documents is communicate to the concer persons.
• How well and all failure mode include and take care while manufacturing the products.
• Is any legal or safety related point is bypassed.

 3. Product Audit:

Product is a part or job that one is manufacturing. Product is not only the final part or finished goods but it also include the work done on part during intermediate processes. This type of audit is done to check the accuracy of the product that is manufactured in the industry or plant. Is there any deviation in dimensional or visual parameters. Does the product is as per the requirement of the customer or there is any chance in it. 

For service industry service can be treat as product and product audit is done on service that company is providing, and analysis how much customer is satisfied by the service. Similarly in manufacturing industries also an auditor check customer should always get good product as per his requirement. If any deviated product reached to the customer then supplier team should make corrective and preventive action so that next time customer should not receive any faulty material.

During product audit an auditor can verify or check following points:

• Is product is as per customer drawing.
• Is there any rejection in the process
• Is analysis of rejection is done correctly
• Preventive actions is taken care in present also that are done in past.
• Preventive action is horizontally applied if applicable.

Audit can also be classified on the basis of who is conducting the audit. 
In this category we can classified three types of audit.

1. First Party Audit
2. Second Party Audit
3. Third Party Audit

1. First Party Audit:

As first party of any industry is itself that industry only. So any audit conducted by by the employee of that company is know as First party audit or even called as internal audit. How good other audits will be done is based on how well internal or first party audit is conducted. First party can be done so that every thing in plant or industry will run as per the requirement of the customer or the process defined. As in our above example of car repairing center, audit done by the manager before hand over to the customer is a type of first party audit or internal audit. It is important as it prevent any wrong product reach to the customer. Some time it is special requirement from customer to do internal audit by different layers of hierarchy of the plant. First Party Audit is just like pre-boards i.e preparation for external audit

2. Second Party Audit:

Second Party is done by customer of the company or Industry. It is an external audit conducted by customer or by audit firm referred by customer. This audit is also named as customer audit.

Customer do two type of audits one before taking the product from the supplier in this customer audit and analysis about the capacity and accuracy that supplier can maintain that is demand by customer. Customer also verify if supplier is able to deliver and maintain some special need and requirements of customer. Second audit is done when product is running at supplier end and cross verify all the terms and conditions mentioned in contract before taking the product, weather product is manufactured as per terms or there is any deviation.

Second party audit is more important than first party audit as it directly depend on the business of the industry. If there is any major gap in the system then supplier can event lost the business.

3. Third Party Audit:

As name suggests that third party audit is conducted by the third party that is not directly related to the industry but has influence on the industry. Third party audit is done to get some certificate that is used to do branding for example GPTW ( Great place to work) certification, some certificate are compulsory like EHS ISO14001, IATF 16949 (for auto mobile industries) some audit are done by company itself like financial audit or process audit by other audit firms so that any loop holes of the company can be checked on time. Third-party audits are important as these audit helps to get certification, registration, recognition, an award, license approval, etc.

In this audit an auditor can audit as per requirement of the audit, there is no fixed patter as define in previous two audits. Third party auditors are specialized auditor for a particular type of audit. This is specified audit and above two are general audits. To become Third party auditor he or she should qualify exam to become external auditor.