In many countries, unethical manufacturing practices are a common scenario. It is prevalent mostly in third world countries. As there are lots of cheaper manufacturing options, many factories of third world countries implement these inferior production methods.

Research studies highlight the fact that about 24.9 million people across the globe were trapped in forced labor in 2016.

The condition of most factory workplaces is below average. Modern-day organizations hire supplier auditors to ensure that the factories have proper working conditions. They also monitor the production techniques implemented by these factories and thereby, addressing the quality standards. The major reasons for audit failure come in the form of technical failures, social failures, and environmental failures.

Common Causes for Audit Failure

The most common causes of audit failure are listed as follows:

Technical failure

It is one of the most common causes of audit failure. Organizations scrutinize the quality systems of a factory by going through the technical audit. Marketers can also be aware of the fact that whether the factories are conforming to the proposed production techniques. Most of the time, technical failures arise because of disorganized documentation, calibration of machinery, and upkeep of equipment. A large number of factories especially in third-world countries implement outdated systems in their operations like old excel spreadsheets, ineffective reporting procedures, and inadequate quality policies.

Though sourcing in the third-world countries has its benefits, it is not without challenges. Many factories fail to cope up with resources and finances while conducting their procurement operations. When auditors visit a factory, they come across machinery that is often out of calibration. As a result, the auditors cannot get access to accurate results.

Social failure

It is a social audit that scrutinizes the existing social systems and structures. Social failures come in the form of child labor and hazardous working conditions. All factories should adopt a “zero tolerance” approach when it comes to child labor. However, many factories do not conform to these guidelines. Supplier auditors must take stringent actions against these factories.

Besides this, hazardous working conditions are prevalent in many factories. It leads to serious accidents and mishaps. Faulty Personal Protective Equipment (PPE), expired fire extinguishers, no properly marked exit signs, and absence of safety gear add to the problems.

Environmental failure

Modern-day business firms address environmental concerns while conducting their procurement operations. However, this is not the same in every case. Many factories do not have proper methods of waste storage. This is indeed a major problem in today’s era. Auditors must check whether the factories are conforming to the environmental laws. If the factories emit poisonous fumes into the atmosphere, it is an environmental risk in every sense. Moreover, it also creates grounds for audit failure.

Organizations have to address the above-mentioned failures to conduct their sourcing operations effectively. Supplier auditors play a great role in this regard. If you run an organization, hire an auditor for operating smoothly in the sourcing destination.