Factory audit

Costco is a leading global membership based warehousing retailer founded in 1983 in Seattle, Washington, USA. It merged with Price Club in 1993 and was renamed Costco Wholesale in 1997. The company is headquartered in Isengard, Washington and is listed on NASDAQ: COST. Its core profit comes mainly from membership fees, with strict control over SKUs (about 4000 types), bulk procurement, and its own brand "Kirkland Signature" strategy to achieve low prices and high quality. It has over 100 million global members and will have over 920 stores worldwide by 2025. In 2019, it entered China and currently has stores in cities such as Shanghai, Suzhou, and Hangzhou. Costco's factory inspection is centered around the Supplier Code of Conduct, focusing on four dimensions: social responsibility (COC), quality (QMSGMP), counter-terrorism (merged with social responsibility), and environmental protection. Designated third-party organizations (such as * *) conduct surprise or semi notification audits.

Costco Factory Audit Checklist

1、 General Basic Files (Essential for All Modules)

□ Business license, production license, environmental impact assessment approval, fire safety acceptance certificate

□ Factory organizational chart, list of inspection contacts, internal audit plan and report

□ Third party audit institution qualification certificate (must be an institution recognized by Costco, such as SGS, BV, ITS)

Previous audit reports and rectification records

2、 Social Responsibility (COC) Audit Checklist

1. Labor rights and interests

All employee files are complete, including ID cards/age certificates, labor contracts, and onboarding registration forms

□ No child labor (employees aged ≥ 16), underage workers (16-18 years old) have been registered and arranged for physical examination

Complete attendance records for working hours, with weekly working hours ≤ 60 hours and monthly overtime ≤ 36 hours, and at least one day off every 7 days

The salary table includes details of basic salary, overtime pay, and allowances, with complete bank transfer records/employee signature records

□ Salary ≥ local minimum wage standard, overtime pay according to legal standards (1.5 times on weekdays, 2 times on weekends, 3 times on statutory holidays)

Employees are free to resign without any seizure of documents, forced labor, corporal punishment, or discriminatory behavior

2. Health and Safety

□ Complete fire-fighting facilities: There are at least 2 safety exits with a width of at least 1 meter, and fire extinguishers (1 per 80 square meters), emergency lights, and evacuation plans are in good condition

Record of fire drills in the past 12 months (including attendance sheets, photos, and summaries), and employees have mastered the evacuation process

Mechanical equipment is equipped with protective covers and emergency stop buttons, and chemical storage meets MSDS requirements with training records

The first aid kit in the workshop is complete with medicines, and there are first responders and usage records

Dormitory (if any) with a per capita living area of ≥ 2 square meters, mixed gender living is prohibited, and there is no violation of electricity usage regulations

3. Business ethics

□ Anti bribery and anti discrimination policy documents are complete, and there are employee appeal channels available

Unauthorized subcontracting is prohibited. If subcontracting is required, it must be reported in advance and approved by Costco

3、 Quality (QMS/GMP/SQP) Audit Checklist

1. Quality Management System

□ Possess ISO9001 or equivalent quality system certificate, complete quality manual and procedural documents

Clear quality objectives with assessment and improvement records

Quality inspection personnel have qualifications and have records of job training and skill assessment

2. Production and process control

Complete IQC report, supplier evaluation form, and qualified supplier list

Clear production operation instructions (SOP) and traceable records of key process parameters

Complete reports for first article inspection, process inspection (IPQC), and finished product inspection (FQC/OQC)

□ Standardized isolation and handling process for defective products, with rework records

3. Facilities and equipment

Production workshop lighting ≥ 300lux, temperature and humidity controllable, 5S management position

Production equipment has maintenance plans, calibration certificates, and operation records

The material identification in the storage area is clear, and the first in, first out management is standardized

4、 Counter terrorism and Environmental Audit Checklist

1. Counter terrorism audit

The factory wall is ≥ 2 meters long, with access control installed at the entrance. The monitoring covers the warehouse, loading area, and entrances and exits, and the video is saved for ≥ 30 days

The loading and unloading area is isolated from the production area, the goods storage area is locked, and visitors need to register and wear temporary identification

The usage record of high security seals is complete, and the container/trailer inspection shows no damage or entrapment

Key position employees (security, warehousing, procurement) have background investigation records

2. Environmental compliance

Complete pollutant discharge permit, hazardous waste disposal contract, and transfer manifest

The wastewater/exhaust gas treatment facilities are operating normally and have monitoring reports

Standardized garbage classification management, with records of energy conservation and consumption reduction

5、 Preparation for Audit and Key Points for Rectification

All records (working hours, wages, training, drills) must be continuous, authentic, and traceable

The on-site passage is unobstructed, the material identification is clear, and the fire/safety signs are prominent

After review, a rectification report must be submitted within 30 working days. Serious violations (such as child labor and forced labor) will result in direct termination of cooperation.