What are the main personnel involved in the COSTCO audit?

The factory has at least one senior factory manager (with the right to sign) to participate in the entire review process. The participating plant personnel are advised to be familiar with the operation of the plant and have the authority to assist with the audit requirements of COSTCO and to answer questions correctly on behalf of the plant owner and management. The scope includes labor policy, wage hours, production, safety and health, and environmental protection. We recommend that responsible personnel associated with the scope of the audit be able to attend the pre-audit and post-audit summary meetings and participate in the review process to assist in collecting information and providing documentation.

How long does the COSTCO audit process take and what is the number of auditors?

According to the size of the factory, one to three auditors will be arranged to go to the factory for a one-day COSTCO audit. For most audits, auditors are able to speak fluent local language (usually with more than one language ability) and can read and write. Sometimes, the auditing company will select a translator to accompany the auditor for evaluation. In most cases, it will confirm the specific audit date with the factory before the audit, but sometimes it will not notify the specific audit date according to the requirements of COSTCO.

Costco Factory Audit Document List (Checklist)

The following documents should be prepared in advance of the auditor's arrival at the factory to ensure that the audit is conducted efficiently and smoothly. In addition, in order to further understand the factory situation during the audit process, additional documents are also available upon request.

Factory documents and policies

 Business license and other government requirements for license, permit, etc.

 In-house policies and measures 

 Employee handbook includes wage hours policy, anti-discrimination, anti-harassment, employee/management complaints, free association  social security receipts, tax documents and other welfare allowance documents

 Subcontractor's name and address

Labor and management agreement and other union documents, such as meeting minutes  Employee compensation insurance receipt (only for the United States)

Employee file

 Wage working hours record: The salary record of the most recent year is available for reference. The salary record must include the regular salary and overtime pay as well as the various deductions. Working hours records must reflect the current month. Workers go to work every day to punch time, including all regular and overtime hours. 

 Production record form, piece count record 

 Government-provided neutralization timing approval, extension of approval or postponement of payment approval, employee welfare certificate, such as paid leave, production inspection, etc. 

 Labor contract (if required by local law) 

 Employees File, including employment application form, employment record, punishment record, etc. All employees' age documents, including copy of ID card, etc.

 Employees I-9 Form (US only)

Health and Safety

 Factory floor plan or plane escape map

 Safety and health manual and written safety and health outline

 Emergency plan

 Accident investigation form

 Safety and Health Committee records (schedule, meeting minutes, activity records)

Staff training records (employee signature records, schedules, training arrangements)

 Inspection records (fire extinguishers, first aid kits, eye wash stations, emergency lights, alarm systems, machine equipment services, etc.)

 Safety production record sheet (chemical, noise, temperature, ventilation test) 

 Post risk assessment

Chemical storage and material safety data sheet

 Personal protective equipment list

Environmental protection

 Environmental permit and record (exhaust permit, sewage permit, etc.) 

 Drinking water test report

 Waste disposal documents / test results / waste analysis report

 Hazardous substance discharge permit or transshipment record

Supply chain security:

 Counter-terrorism policies and procedures, including access control, personal safety, shipment safety and information technology security 

 Staff training records

 Visitor registration form and employee identification procedures (eg employee wearing a label)

 Vehicle entry and exit registration check record

 Bill of lading and seal tracking

 Background investigation policy and investigation records

Review the relevant shipping documents to confirm the origin

* If you hire temporary workers, seasonal workers, contractors, and auditors through a manpower dispatch company, some of the workers will be selected to participate in employee visits and related document records. The scope of the audit includes production personnel and support production personnel (such as maintenance workers, cleaners, warehouse workers/factory shippers, security/security personnel, kitchen workers, etc.). Please communicate this request to the manpower dispatch company prior to review.

The following is an introduction to the factory audit process of COSTCO. All programs are not necessarily in the following order, but all programs are included. In addition, in order to further understand the factory situation, additional procedures or documents are also required to be provided by the factory according to actual conditions. In order to ensure the smooth progress of the audit process, the factory needs to arrange for all relevant personnel to participate in the assistance. It should be noted that any rejection of the scope of the evaluation audit during the audit process will affect the final audit results.

The auditor arrives at the factory—the auditor arrives at the factory and presents the business card and work permit. Please inform the factory in advance of the arrival of the security personnel.

Opening Meeting—The auditor briefly describes the audit process to the factory owner, production manager, personnel manager, and other factory-organized managers and answers questions.

Safety and Health Inspection - The auditor will inspect the factory to see if the production site is safe and sanitary; the production status; whether there is an outsourcer; the treatment of wastewater; the storage of chemicals and hazardous substances. Factory inspections are not limited to the production sites of COSTCO products, including all production sites, warehouses, chemical storage areas, kitchen restaurants and dormitories (if applicable). The scope of the audit is to cover all plant areas covered by the factory to which the business license belongs. If necessary, the auditor will take photos of the defects found.

Employee Interviews - Randomly select employees to conduct closed-door interviews, either individually or in groups, without the involvement of plant managers. If the factory employs manpower dispatchers, these employees are also included in the scope of the audit. The number of employees interviewed is determined by the auditor. Employees' access includes basic questions such as factory recruitment system, working period, working conditions, punishment policy, and freedom of movement. Employees can be informed in advance that they will conduct a factory audit, but they are not allowed to teach employees how to answer the questions asked in the interview.

Document Review—File access includes factory documents (labor policy, business license, production record, safety and health, environmental protection, etc.) and employee documents (labor contracts, employee files, employee handbooks, payroll, hours records, etc.).

Supply Chain Security—The auditor verifies that counter-terrorism precautions meet the requirements based on the supply chain safety checklist.

Review Summary Meeting—The auditor will meet with the plant management to summarize the review. The factory needs to arrange for the management personnel (with the right to sign) to participate. The auditor will share the evaluation results with the factory management personnel, return to the questions raised by the factory, and provide a legal reference. The review summary report will list the deficiencies identified during the audit, relative to the improvement recommendations and the time required for COSTCO acceptance improvements. The review summary report will be provided to the factory on the day of the audit. Factory managers need to understand the contents of the evaluation summary report and sign and confirm. If you have any comments on the review, please indicate in the summary report.

After the review is completed---a formal audit report will be sent by email within five to ten business days based on the contact information listed on the review application form. COSTCO will automatically receive a report. If you are not a COSTCO supplier, please ensure that the COSTCO vendor authorizes UL-RS to send a report to you.

The facility will send the improvement plan to vendorcompliance@costco.com within five days of the audit. The auditor will inform the submission of the improvement plan during the review and summary meeting, and the factory will keep a copy of the review summary report. Costco hopes that all parties will become a team to help the factory fully meet industry standards, national regulations and international legal requirements and requirements within a reasonable time. Costco has the final decision on the results of the audit and whether it is necessary to apply for follow-up audits.

We encourage the factory to communicate with the auditor on the day of the audit to understand the audit non-conformity. If the audit is completed, you still do not understand the non-conformities found in the audit or do not know if it improves, we will provide a telephone consultation service, which is included in the audit fee. Please contact the UL Customer Service Manager for arrangements.

The COSTCO audit is a compliance requirement of COSTCO for its suppliers, mainly on social responsibility. Whether the employer, salary, and welfare of the factory meet local laws and regulations, whether the human rights of employees are respected, and whether the working environment is in line with the health and safety of employment.

What are the benefits of the factory that passed the COSTCO audit?

• Promote consumers to build positive emotions on products.

• Solid cooperation with buyers and broaden new markets, laying a solid foundation for long-term development.

• Reduced business risk and increased orders. Lost orders caused by work-related injuries, legal proceedings, etc.

• Developing new markets and customers, socially responsible companies will stand out from their competitors.

• Establishing a management system that meets international requirements can be recognized internationally and increase rivals that compete with well-known brands.

COSTCO inspection method, in addition to traceability, there is a different sampling system than the standard system is the employee's sample survey.

Costco, a warehouse supermarket in the United States. Feedbacks from export companies, Costco procurement is not only large, but also good prices, so Costco has become the target of domestic export companies. But to become a Costco qualified supplier is not an easy task. Export companies must cross the COSTCO audit.

What are the latest requirements for COSTCO audit? The following is answered by Shanghai Tranwin:

1. What projects does the Costco audit include?

It usually includes three aspects: social responsibility, anti-terrorism and quality inspection. However, at present, social responsibility and anti-terrorism are almost all reviewed together. Social responsibility and quality audit are comprehensive, and counter-terrorism is relatively simple.

2. What is the Costco GMP audit?

COSTCO GMP audit is a special name for Costco quality audit. It is very different from other customers' quality audits. There are many special requirements for them. For example, for risk assessment, the company loses more points and is more difficult.

3. Why do you want to pass the Costco audit?

To put it simply, after Costco has communicated with you, it is necessary to pass their supplier audit before the official cooperation, which is commonly known as Costco audit. After passing, it is possible to become a qualified supplier or ship.

4. Can Costco accept other audit reports?

Previously, many garment home textile companies were required to conduct WRAP certification, but the project was difficult to audit, and the audit cost was high and the cycle was long. In fact, in addition to having its own COC auditing standards, it also accepts other projects, such as SMETA and C-TAPT reports, to replace WRAP certification. If the company applies for it, it is a safer alternative to apply for the SMETA project and then submit it to the customer.

5. How to write CAP after Costco audit?

After the review, the English CAP needs to be submitted regardless of whether it has been passed. Beginning this year, the English CAP and improvement evidence will need to be submitted on the COSTCO system, and the audit company will review it one by one. If you don't write it, you will be asked to resubmit. There are only three chances, more than the factory needs to pay the relevant fees.

6. What is the term of validity of the Costco audit?

Usually one year, if there are serious problems or the scores are not enough, re-audit will be required within 3-6 months. Customers need suppliers to continue to improve and continuously improve management

COSTCO is a large-scale membership chain wholesale and retail market with 327 chain stores in 7 countries and regions, including the United States, Canada, the United Kingdom, Mexico, Japan, South Korea and other regions. Each store has an average floor space of more than 130,000 square feet.

COSTCO adopts a membership-based shopping method. Members only need to pay a membership fee of 40 US dollars per year to buy the required items below the market price of 5%-30%. The products sold by COSTCO are mainly in the form of wholesale large-packaged goods, which include food, home appliances, computers, daily necessities, hardware, tires and even automobiles. In 1998, COSTCO joined the gas station in the business project. Customers who hold the membership card can buy gasoline at 20% of the market price at COSTCO's own gas station.

Costco will endeavor to maintain the rights and safety of its suppliers' employees, and Costco believes in and respects cultural and legal differences around the world. For this purpose, Costco:

1. It is forbidden to use illegal child labor, prison labor or slavery and abuse of employees.

2. Suppliers are expected to comply with at least the labor laws and environmental regulations of the host country.

3. Encourage suppliers to strive to achieve “above or exceed the goals of Costco (Supplier Code of Conduct)”

COSTCO is a large-scale membership chain wholesale and retail market with 327 chain stores in 7 countries and regions, including the United States, Canada, the United Kingdom, Mexico, Japan, South Korea and other regions. Each store has an average floor space of more than 130,000 square feet. TCO adopts a membership-based shopping method, and members only need to pay a $40 annual membership fee to buy the required items below the market price of 5%-30%. The products sold by COSTCO are mainly in the form of wholesale large-packaged goods, which include food, home appliances, computers, daily necessities, hardware, tires and even automobiles. In 1998, COSTCO joined the gas station in the business project. Customers who hold the membership card can buy gasoline at 20% of the market price at COSTCO's own gas station.

Purpose

Costco will endeavor to maintain the rights and safety of its suppliers' employees, and Costco believes in and respects cultural and legal differences around the world. For this purpose, Costco:

1. It is forbidden to use illegal child labor, prison labor or slavery and abuse of employees.

2. Suppliers are expected to comply with at least the labor laws and environmental regulations of the host country.

3. Encourage suppliers to strive to achieve “above or exceed the goals of Costco (Supplier Code of Conduct)”

With this step, Costco believes in providing employees with viable and definite protection and improvement. Costco's Supplier Code of Conduct applies to all suppliers working with Costco, and Costco will work with suppliers who are committed to implementing this Code of Conduct or have taken action, and Costco has the right to and cannot comply with this Code of Conduct. The supplier terminates the business relationship. Costco may amend, enforce and/or interpret this Supplier Code of Conduct; except for Costco, the Code does not create any bias and is beneficial to either party.

Definition

Above or beyond Costco's Code of Conduct for Suppliers means that the programs and policies adopted by suppliers and related production units exceed the legal requirements of the time and continue to improve the working conditions and environmental protection of employees. The suppliers and related production units used by Costco are striving to achieve this goal and are committed to protecting and improving the rights, safety and working environment of employees.

Costco refers to Costco's head office, subsidiaries and joint ventures, including Costco Wholesale Canada Limited, Costco Wholesale UK Limited, Costco Wholesale Korea Limited, Costco (Taiwan) Good City Co., Ltd., Costco Mexico. SA de C V and Costco Wholesale Japan Ltd. These are collectively referred to as "Costco".

Production facilities refer to the main production units, processing plants or production plants that produce goods. The production facility may be owned by the supplier or subcontractor. Regardless of the relationship of the supplier or subcontractor, the supplier is responsible for ensuring that the production facilities comply with the Supplier Code of Conduct.

Commodity means that all products are stated on Costco purchase orders and packaging, including pallets, instructions, warranties, and all other materials and services included in the merchandise.

A supplier is a company that provides goods to Costco, including parent companies, members, subsidiaries/subsidiaries, agents, representatives, and family members, as well as other businesses, names, or trademarks associated with the sale of Costco's goods.

We have recently coached a number of COSTCO GMP audit projects, which are very different from the regular customer audits, especially the standards adopted by the COSTCO GMP audit. The project mainly includes two audit reports of QMS and C&C, and also specifies ITS to adopt SQP.

At present, customers must entrust SGS, ITS and BV to conduct GMP audits.

There have been significant inconsistencies in the audit criteria used in previous audits. Since June 2015, COSTCO has redefined the adopted standards. The entire audit not only uses the scoring system, but also the scores of the final audit report. At the same time, it also needs to look at the problems found, such as minor/moderate/major/critical, etc., and also according to the level of red orange yellow green.

From the overall rating, it is mainly divided into 5 levels.

In addition, each level looks at the nature of the problem points involved. If the score is low or involves serious problems, the client will request a full or partial review. If the score reaches a certain level and there are no serious problems, the audit is valid for 1 year or half a year. Otherwise it will take 1-3 months for on-site review.

In addition, a written CAP is required in the Costco GMP audit and must be completed in English. There is a lot of content, high requirements, and sometimes even proof of improvement is required. The auditing company will review and check the submitted English CAP and the improved evidence one by one. In the past, many CAPs and improvement evidence submitted by many factories were repeatedly called back to the company for re-editing and submitting, which made the foreign trade factory annoying.

Why are there any factories that fail to pass the COSTCO quality audit? Tranwin summarizes the experience and lessons of many consultants. The comprehensive analysis of the auditors' on-site interpretation is as follows:

1. Employees do not understand AQL. Internal auditors do not have internal audit training records or are not familiar with internal audit requirements. The annual training program has no GMP-related training topics, or no assessment records.

2. Some test equipment calibration has expired.

3. The material/product is not stored off the wall and stored by the window.

4. The wall peels off mold, the ground is dirty, there are spider webs, the roof is broken and the area is water.

5. There is no automatic closing of the door/door curtain in the workshop and warehouse. The window is open and no screens are installed. The lights in the production and storage areas are unshielded.

6. Warehouse materials, semi-finished products, finished products without date or batch number identification, can not confirm whether the factory's first-in-first-out is effectively implemented, can not be retroactive.

7. There is no simulated recall record, or no record of traceability in the recall is saved.

8. The factory has no cleaning plan and implementation records.

9. Employees do not understand the quality of the factory and the product safety policy.

10. The production parameters of machinery and equipment are not controlled according to the specified requirements.

11. Food or beverages are brought into production and storage areas.

12. Only individual departments have the goal of setting measurable quality; the implementation of targets is not regularly assessed. When the target is not met, there is no corresponding cause analysis and improvement plan.

13. The internal audit and management review did not include GMP.

14. The list of foreign documents of the factory is incomplete, such as lack of customer standards, relevant regulatory standards for product sales, product standards, etc., and is not issued according to controlled requirements.

15. The risk assessment is incomplete, such as: lack of procedures, incomplete records (physical, chemical, biological aspects of product contamination during production, packaging or storage), control measures, personnel responsibilities, etc.

16. The factory does not have a primary or periodic assessment of the supplier/subcontractor.

17. Wooden pallet storage is not suitable, damaged, no procedures, cleaning inspection records.

18. Training record for pest control personnel/certification of third party pest company. No pest control record. No mousetrap device, fly-killing device, no distribution map, and improper installation.

19. The factory has no pre-operational inspection procedures to verify that the equipment has been effectively cleaned and in good condition.