Verifying a Factory Before You Order: Audits, FAT and What Documents Prove
Document review proves a supplier is legally and financially able to deliver; a factory audit proves the workshop can build what was quoted; a factory acceptance test proves this specific machine performs before it leaves. The three are not interchangeable, and skipping the audit is the most expensive shortcut, because a defect found at FAT costs weeks while the same defect found on site costs months.
The verification sequence
Verification is cheapest when it runs in order, because each stage narrows what the next one has to check.
| Stage | When | What it proves | What it cannot prove |
|---|---|---|---|
| Document review | Before shortlist | Legal existence, certification, insurance, financial standing | Manufacturing quality |
| Reference checks | Before shortlist | Real-world performance and post-sale behaviour | Capacity for your specific scope |
| Factory audit | Before award or at award | Workshop capability, QA system, current load | How this machine will perform |
| FAT | Before shipment | This unit meets the specified performance | Site integration and utilities behaviour |
| SAT and commissioning | After installation | Performance in the real utilities envelope | Long-term reliability |
What a useful factory audit actually looks at
A tour is not an audit. An audit checks whether the systems that produce quality exist, and whether the workshop currently has room for your order.
- Order book and shop loading against your delivery window — the single best predictor of a late delivery.
- In-process inspection records for a machine currently being built, not a showroom unit.
- Welding, electrical and hygiene procedures with named qualified personnel.
- Traceability of bought-in critical components: compressors, drives, PLCs, instrumentation.
- Non-conformance handling: what happened the last three times a machine failed internal test.
Writing a FAT protocol that can be failed
A FAT protocol that cannot be failed is theatre. The protocol should be agreed in the contract, list measurable acceptance criteria, name who signs, and state the consequence of a failure — usually a re-test at supplier cost, with the shipment held.
Run the test at the specified duty, with representative product where possible, and record instrument readings rather than opinions. Attach the punch list to the payment milestone; retention released against an unresolved punch list rarely gets resolved.
Remote and third-party options
Not every buyer can travel for every stage. Third-party inspection agencies can execute an audit or witness a FAT against your protocol, and a live-streamed FAT with an agreed instrumentation list is far better than no witness at all. What matters is that the acceptance criteria were written by the buyer's side, not supplied by the vendor on the day.
Where the project is financed, the lender often requires independent inspection anyway — aligning the buyer's protocol with the lender's requirement avoids paying for the same test twice.
Frequently asked questions
Is a factory audit worth it for a single machine purchase?
Usually yes above roughly USD 250,000, and always when the machine is production-critical. The cost of an audit is a fraction of one week of lost production after a late or defective delivery.
Can certificates replace an audit?
No. A certificate shows a system was assessed on a date; an audit shows what the workshop is doing this month, including whether your order can physically fit into the current shop loading.
What should be tied to the FAT in the payment schedule?
A meaningful milestone — commonly 10 to 30 per cent of the contract value released only on FAT sign-off, with a further retention held until site acceptance and performance testing.
Who attends a factory acceptance test?
The buyer's engineering representative or an appointed third-party inspector, plus the supplier's project and quality leads. Where financing is involved, the lender's technical adviser may attend or require the report.
What happens if the machine fails FAT?
The contract should already say: corrective work and a re-test at the supplier's cost, shipment held, and delivery-date consequences addressed by liquidated damages. Negotiating this after a failure has no leverage behind it.
Continue from here
The document set to collect before an audit is scheduled.
One scope document sent to qualified suppliers so the quotes come back comparable. Free for buyers.
The seven-step buyer path from scope to commissioning, and where the fee actually sits.
Buyer guides on RFQ structure, EPC contracting and supplier evaluation.