COSTCO WHOLESALE

FACTORY EVALUATION
REPORT
COSTCO WHOLESALE CPS-I NUMBER:
NON-FOODS QUALITY ASSURANCE CLIENT DEPT.:
999 LAKE DRIVE EVALUATION DATE:
ISSAQUAH, WASHINGTON 98027 ISSUE DATE:
ADDENDUM DATE:
ATTN: nonfoodsqa@costco.com
C.C.: XXXXXXXXXXXXX
BCC: COSTCO-CPSI@us.bureauveritas.com OVERALL RATING
*See Below Note
GOOD
CORRECTIVE ACTION REQUIRED
UNSATISFACTORY
Note: Rating is based on factory evaluation results. Final acceptance, or
rejection is per Costco only.
FACTORY EVALUATION RESULT

Evaluation Rating:
Points Achieved:
Points Possible:
CV EVALUATION Critical Failures Found:
* Note: Any critical failures automatically result in evaluation failure.*

Type of Evaluation: Evaluation

Re-Evaluation
Other (please specify):
Cashmere Evaluation (add cashmere evaluation addendum)

Product Description:
Factory Name (English):
Factory Name (Chinese):
Factory Address (English):
Factory Address (Chinese):
Factory Tel. Number: Factory Fax Number:
Vendor Name: Factory Email:
Costco QA Project Person: Costco Item No.:
Vendor Style no:
Country of Origin: Country of Destination:
Previous Report No: Charge Vendor: Yes: No:
Addendum Report: Yes: No:
Reason For Addendum:
Date of Audit: Auditor:
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Total Points Total Points Achieved

Possible
A. Metal Detection Procedures

B. Facilities & Working Environment

C. Quality Control System

D. Incoming Material Inspections

E. In-Process Quality Control

F. Final Inspection

G. Finishing and Packaging

H. Non-Conforming Materials

I. Communication, Documentation
Control and Work Improvement

J. Handling of Complaints

K. Trans-shipment

Grand Total Possible:

Grand Total Achieved:

Executive Summary:
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Recommendations For Improvement:

Factory Information

COMPANY ORGANIZATION NAME Met during audit?

Owner Yes No
Managing Director/General Manager Yes No
Sales Manager/Marketing Manager Yes No
Plant Manager Yes No
QC/QA Manager Yes No
Production Manager/Factory Manager Yes No

Factory has been in operation since

STAFF:
Full time Part time Temporary Contract
1. No. of workers
2. Cutting Room
3. Sewers
4. Packing
5. Clerical
6. Mechanics
7. Supervisors
8. Engineering Staff

PRODUCTION INFORMATION:
Monthly Production Capacity Required Lead
Time
Main Products Produced:
Woven:
Knitted:

FACTORY SELF-OWN QUOTA OF LAST YEAR:

Category Quantity Category Quantity Category Quantity Category Quantity

OPERATIONS PERFORMED:
Operations In house Outsourcing Operations In house Outsourcing
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Spinning Buttoning
Weaving Hand stitching
Knitting Pressing
Cutting Folding
Sewing Packing
Linking
Embroidery
Fusing Others:
Trimming
Washing

PHYSICAL CONDITION:

1. Masonry Yes No 9. Canteen Yes No

2. Steel Yes No 10. Quarters Yes No
3. Number of Floors 11. On site Medical station Yes No
4. Square Meter 12. Yes No
5. Electrical Light Yes No 13. Yes No
Source
6. Air conditioned Yes No 14. Yes No
7. Fire Equipment Yes No 15. Yes No
8. First Aid Equipment Yes No 16. Yes No

Type of ownership of factory (i.e. Taiwan owned, HK owned,

Chinese owned, Local Chinese Township Enterprise, Etc.):

If the factory is a Foreign-Investment Factory, At All Times

Number of Home Country Staff at factory: % of the time

Title & Responsibilities of home country staff:

Factory Background Information

1. Who are the owners / principles of this factory?

What are their names / titles?
2. If factory is located in China, are the owners from:
Taiwan Hong Kong Chinese government-owned
Chinese private enterprise Other:
3. If factory is Chinese government owned, what is the name of the Chinese government unit?
4. If the factory is a Chinese-Chinese private enterprise, what are the work experience and
backgrounds of the owners?
5. How many years has this factory been at this particular location?
6. What is the factorys approximate annual FOB export dollars (US$) for the past 3 years?
7. How many years has this factory been manufacturing the same or similar item(s) as that being sold
to Costco?
8. What are the names of the factorys key customers in the U.S. / Canada / Europe?
9. What are the names of any OEM customers (i.e. brand name customers)?
10. What is the factorys monthly capacity (# of 40 containers) and at what percentage capacity is its
current output? (i.e. Is it 90% full? Is it 75% full?)
11. Is the factory vertical or nearly vertical? Explain:
12. If factory is primarily an assembly / finishing / packaging operation, who are the other key sub-
factories involved with this product?
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Equipment

Total # of Sewing Machines:

Total # of Serger
(overlocking) Machines:

Listing of all major machinery & Equipment at factory relevant to the manufacturing of the
product. (Do not list sewing / serger machines)
Brand Name/Type Manufacturing # of If Relevant
of Machinery Model # Country Purpose Units Capacity

PERSONS TO WHOM QC/QA MANAGER REPORTS:

Does QC or QA Manager have other job responsibilities in

other areas? If yes, please list. Yes No

Other Job Responsibilities:

Current Major Customers:

A. METAL DETECTION PROCEDURES*

These 4 questions must be answered Yes or No. N/A cannot be used as an answer for any question in this section.
Costco requires some form of metal detection for all garments.
1. Are metal detectors used? Yes No
Type of metal detector:
Quantity available for use:
Frequency of Calibration:
Who Calibrates the Equipment:

2. Are needle guards used? Yes No

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3. If needle guards are used, are they used consistently on all machines? Yes No
4. Needle replacement policy in effect? Yes No
Explain policy:

Note: Factories making childrens garments are required to have a metal detector. Based on the
production method for adult garments, if the factory does not have a metal detector but they do
use needle guards, have a needle replacement policy or some other means of ensuring no metal is
left in the garments, Costco may approve the factory despite not having a metal detector.

* Denotes critical questions.

B. FACILITIES & WORKING ENVIRONMENT

1. Are fax, email, and telephone utilities available?

Yes No
2. Are the working areas clean with no obstructions?
Yes No

3. Is the lighting and ventilation condition adequate? Yes No

4. Is there a written machine maintenance schedule?

Yes No

5. Does the factory possess a strong maintenance team to back up

production? Yes No

6. Does each machine have a maintenance record hung on it?

Yes No

7. Is there a time card recording machine?

Yes No

8. Are the aisles, exits and stairways kept clear at all times?
Yes No

9. Are workers wearing uniforms and need to change working shoes

before entering into the production floor? Yes No

10. Is there at least one well-stocked first aid kept on every factory floor?
Yes No

11. There are no workers smoking at the production area observed during
evaluation. Yes No

12. There are no workers drinking or eating at individual workstations?

Yes No
13. If factory caters lunch/ meal to the workers, is kitchen safe and clean?

Yes No
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Rating: Facilities: Score 1 Point for each marked yes. Total: / 13

Item #: Remarks:

C. QUALITY CONTROL SYSTEM

1. Is factory operating a formal internal quality control procedure on its Yes No
products?

2. Are all QA staff a separate team and different personnel from the Yes No
trimming and inspection workers?

3. Are there adequate number of QA staff to deal with the quality and Yes No
quantity of spot-checking?

4. Is the QA manager authorized to stop production when there is Yes No

serious quality problems with production?

5. Are there adequate internal training programs provided for all quality Yes No
control personnel involved?

6. Are there adequate traceable training records? Yes No

7. Are the factory Q.C. personnel certified before they perform their job Yes No
as outlined in the Q.C. procedures?

8. Does the factory use international, national, client or its own approved Yes No
standards to perform in-house quality control?
Which used:_____________________________________________

9. Does factory have a detailed written plan demonstrating how safety Yes No
requirements on products are checked in house?

10. Do detailed Q.C. reports reflect that the products are to be properly Yes No
checked beforehand?

11. Does quality controller fully understand factory quality policy, quality Yes No
consciousness, and the importance of the quality assurance concept?

12. Does Q.C. have adequate basic knowledge and expertise on products Yes No
to be made and general manufacturing technology?

Rating: Quality Control System: Score 1 Point for each marked yes. Total: / 12

Item #: Remarks:
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D. INCOMING MATERIAL INSPECTION

1. Does factory perform incoming fabric inspection procedures? Yes No

2. Are incoming and outgoing raw materials registered to let stocks check? Yes No

3. Are raw materials properly labeled, stored, and traceable? Yes No

4. Are raw materials kept in controlled storerooms to avoid theft, loss, and any Yes No
deterioration of quality?

5. Is there a fabric inspection machine? Yes No

6. Does the factory have its own laboratory or light box? Yes No

7. Is the inspection-sampling schedule adequate and can the quality of the Yes No
product be guaranteed with confidence?

8. Are adequate inspection records maintained to prove products are checked Yes No
and meet all requirements?

9. Are there adequate written inspection instructions available as guidelines to Yes No

inspectors?

10. If testing equipment is needed during inspection, is it sufficient and in good Yes No
condition?

11.Is there a systematic control on the non-conforming raw materials and is it Yes No
efficient?

12. Are faulty fabrics / raw materials well separated in order to avoid mixing? Yes No

13. Are different shade lots of fabrics or raw materials well separated in order Yes No
to avoid mixing?

Rating: Incoming Inspection: Score 1 Point for each marked yes. Total: / 13

Item #: Remarks:
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E. IN-PROCESS QUALITY CONTROL

1. Are all toolings fully tested and evaluated with all measurements and Yes No
safety issues?

2. Are samples of pilot run carefully be reviewed by engineers and Yes No

quality staff to see all safety aspects are being met?

3. Is IPQC sufficient to prepare for mass product? Yes No

4. Is there any documentation either from the engineering, QC Yes No

department, or top management to authorize mass production?

5. Are there line patrols by quality controllers or other means to monitor Yes No
the compliance of the product to meet quality and safety requirements?

6. Does factory use international or clients standards to carry out in- Yes No
process inspection? Are there records?

7. Do records reflect the action taken on the rejected lots? Yes No

8. Do records show rejected lots are well identified and segregated from Yes No
accepted lots?

9. Are rejected lots well-identified and segregated from accepted lots? Yes No

10. Are there adequate, clearly written criteria/instructions available for Yes No
inspectors to follow?

11. Are there adequate approved samples attached to all areas to give Yes No
inspectors or workers a guideline?

12. Are the inspection and test equipment sufficiently reliable to verify the Yes No
conformance of the semi-finished final product?

13. Is the testing equipment calibrated accurately and is it sufficient? Yes No

14. Are the inspection defects charted, analyzed, and monitored to improve Yes No
the problems encountered?

15. Are shade batches separated in a lay while cutting? Yes No

16. Are cutting panels checked before they are put into the sewing floor? Yes No

17. Is there a tearing test for fused parts? Yes No

18. Are cutting panels properly placed into containers / boxes? Yes No

19. Are workers wearing protective gloves while they are operating cutting Yes No
machines?
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Rating: In-Process Quality Control: Score 1 Point for each marked yes. Total: / 19

List the various in-line QC Checks:

Item #: Remarks:

F. FINAL INSPECTION
1. Does factory QC perform internal final inspections on finished Yes No
products?

2. Are there written formal inspection reports and are they properly filed Yes No
and traceable to review quality of products?

3. Are customer drawings/specifications readily available from quality Yes No

control or engineering department on request?

4. Does factory perform internal mechanical tests during production to Yes No

safeguard the products quality?

5. Are there records to show factory has ever performed such mechanical Yes No
safety tests?

6. Are adequate inspection and testing records maintained? Yes No

7. Does the factory inspect 100% of the product? Yes No

8. Is the sampling size of products for final inspection adequate enough to Yes No
show the confidence of safe products?

9. Are there normal procedures to require acceptable inspection reports to Yes No

authorize and shipment of the products?

10. Does factory perform 100% check on functionality? If not, is the Yes No
current procedure sufficient?

11. Are measurement audit conducted during final inspection? Yes No

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12. Are dummies used to check the fitting and hanging aspects of finished Yes No
garments?

13. If some operations are sub-contracted out, will the factory send its QC Yes No
to the sub-contractors site for monitoring the quality and are there any
out-inspection records to proving that?

Rating: Final Inspection: Score 1 Point for each marked yes. Total: / 13

Item #: Remarks:

G. FINISHING AND PACKAGING

1. Are packed master cartons well stored in a covered area or a good Yes No
shelter to keep from sunshine, to avoid being flooded or rained upon
and protected from dirt & rodents?

2. Is there adequate safeguard to prevent another companys products Yes No

from being packaged into master cartons?

3. Is there adequate control to prevent any defective or rejected products Yes No

from being packed into master cartons?

4. Are semi-finished products well segregated from final finished Yes No

products in the packing area?

5. Are finished products packed into master cartons immediately when Yes No
case product count has been done?

6. Do workers wear gloves, hats/caps when necessary? Yes No

7. Is the method of product count into master cartons accurate? Yes No

8. Is the current procedure acceptable to avoid the possibility of shortage Yes No

of product?

9. Is the packaging area tidy and free of contaminants? Yes No

10. Is there any equipment to use for stamping the date code, lot code, and Yes No
case number?

11. Is filter connected to the water pipe used for steam boiler in pressing Yes No
room?

12. Have the steam boilers been examined periodically by outside-certified Yes No
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engineers and with certificates to prove it?

13. Is cleaning liquid and agents properly stored to avoid fire catching or Yes No
inhaling by workers?

14. Is weighing machine used to take the actual weight of the cartons? Yes No

15. Is barcode scanner used to verify the correctness of barcode stickers on Yes No
packages (if applicable)?

16. Are finished cartons put on pallets to avoid direct contact with floor? Yes No

17. If laundry or washing machines are used, are there any written Yes No
procedures for wastage water treatment?

Rating: Packaging: Score 1 Point for each marked yes. Total : / 17

Item #: Remarks :

H. NON-CONFORMING MATERIALS

1. Is non-conforming material sufficiently identified? Yes No

2. Do records show that reworked parts/materials have been re-inspected Yes No

to comply with standards?

3. Is scrap material handled satisfactorily? Yes No

4. If reclaimed materials are used, is there adequate identification and Yes No

checking to specification?

5. Can the factory demonstrate how they handle the non-conforming Yes No
materials such as products that fail the mechanical tests?

6. Can the factory supply solid proof to guarantee non-conforming Yes No

materials or products are absolutely segregated from normal
production and none will be mixed into the production? Or re-selling
with brand labels.

7. Is non-conforming material properly segregated at all stages? Yes No

8. There are no signs that workers are wearing garments identical to Yes No
garments being produced?

Rating: Non-Conforming Materials: Score 1 Point for each marked yes. Total: / 11
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Item #: Remarks:

I. COMMUNICATION, DOCUMENTATION CONTROL AND WORK MOVEMENT

1. In the case of authorized subcontracting, does factory provide adequate Yes No

supervision and specifications to ensure the compliance to the
requirements of client standards?

2. Is there an adequate and formal system for receiving purchase orders, Yes No
tooling, and equipment?

3. Are pre-production samples or pilot lots evaluated in writing and with Yes No
comments attached on it?

4. Are approved drawings and specifications used properly, filed in Yes No

chronological sequence, traceable and easily available?

5. Do factory management and key staff understands English sufficiently Yes No

to ensure communication?

6. Does factory have clear instructions to its departments to delegate Yes No

authority to stop production if the products do not meet requirements
of clients standards?

7. Is client technical information clearly identified with adequate controls Yes No

throughout production process?

8. Does the factory realize that all the technical information related to the Yes No
clients product is confidential and will not be exposed to other clients?

9. Does factory work closely and efficiently with client on the assigned Yes No
project to advise and discuss any failure on processing problems?

10. Do records show that regular pre-production meetings would be held Yes No
before a new style is firstly put into production?

11. Are the factory rules and the labor ordinance posted on the notice Yes No
board so to let the workers know their rights and privileges?

12. Do records show the daily production output of each section? Yes No

Rating: Communication, Documentation Control and Work Movement:

Score 1 Point for each marked yes. Total: / 12
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Item #: Remarks:

J. HANDLING OF COMPLAINTS

1. Are customer complaint handled by management? Yes No

2. Is factory operating a formal handling of complaint procedure? Yes No

3. Are the complaints analyzed and investigated the root causes? Yes No

4. Are corrective and preventive actions taken to eliminate the non- Yes No
conformity?

5. Is the corrective and preventive plan communicated with the customer? Yes No

6. Is there any adequate traceable handling of complaint records? Yes No

7. Do records show that the corrective and preventive actions are Yes No
properly conducted and monitored to be acceptable?

Rating: Handling of Complaints: Score 1 Point for each marked yes. Total: /7

Item #: Remarks:

K. TRANS-SHIPMENT INFORMATION (YES / NO)*

These 8 questions can only be answered Yes or No. N/A cannot be used to answer any question in this section.
1. There is no any evidence of trans-shipment. Yes No
2. Does all WIP (work in progress) present at the time of the inspection have Yes No
appropriate paperwork?
3. Is the country of origin correct on all paperwork? Yes No
4. There is no evidence of diverted shipments from other countries. Yes No
5. There is no evidence of contraband production. Yes No
6. There is no evidence of fraudulent labels. Yes No
7. Can WIP be completed within this factory? Yes No
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8. There is no evidence that the factory is subcontracting out garment Yes No
production.
*Denotes Critical Questions
Rating: Trans-shipment Information: Score 1 Point for each marked Yes. Total: /8

Item #: Remarks:

Conclusion

The factory is generally acceptable/ not acceptable for producing products for Costco Wholesale.

BV Office Name xxxxxxxxxxxxxxx

Approved by: xxxxxxxxxxxxxxxxxxxx

Photos:
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BUREAU VERITAS INFORMATION SUMMARY

Client Name: COSTCO WHOLESALE
Address: 999 LAKE DRIVE
City / Province: ISSAQUAH, WASHINGTON 98027
Country: USA
Contact:

Fax No.:

Vendor:

Factory Name and Address:

Service Performed:

Auditor Name:

Service Date:

Report Date:

Total Pages:

The conditions observed during the Factory Evaluation are detailed in the preceding pages.

[BV Office Name]

Approved By:

The above reflects our findings for the particular factory in concern on the date of our service only. This report does not certify, confirm or imply: a) compliance with any
government, industry or association regulations or standards, unless stated otherwise; or, b) the quality of any specific products manufactured by the factory/sellers/suppliers;
or, c) the shipment of any specific products. This report does not discharge or release the factory/sellers/suppliers from their commercial, legal or contractual obligations with
buyers in respect of products manufactured by the factory/sellers/suppliers. Our services, including reports and certificates, are subject to the General Conditions of Service
of Bureau Veritas which have been sent to your company. They can be resent upon written request. This report cannot be partially copied. Any reader other than the party for
which this report has been specifically issued is hereby informed that the General Conditions of Service of Bureau Veritas contain liability limitation provisions.

BV Office Name, Address, Country Name, Tel: xxx-xxx-xxxx Fax: xxx-xxx-xxxx E-mail: xxxxxxxxxx

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DO NOT DISCLOSE OUTSIDE YOUR ORGANIZATION WITHOUT BUREAU VERITAS PRIOR WRITTEN CONSENT".