Understanding the application and execution of Factory Acceptance Tests (FAT) and the role of third-party witnessing is crucial in ensuring the quality and compliance of procured equipment or systems. Here’s an explanation that covers why FAT and third-party witnessing are used, some suppliers offer these services, when they are used, their impact on RFQs and supplier deliveries, and the typical steps involved in third-party witnessing.

What is FAT and Why is it Used?

Factory Acceptance Test (FAT) is a critical inspection process for verifying that machinery or equipment built by a supplier meets the agreed specifications. It is conducted at the supplier’s factory before shipping the equipment to the buyer. The purpose of FAT is to:

• Ensure that the system is fully functional and meets all contractual specifications.
• Identify any potential issues that could affect the system’s operation before it arrives at the buyer’s site.
• Save costs and time that might otherwise be spent on extensive modifications after delivery.

What is third-party witnessing and why is it used?

Witness by third party refers to the involvement of an independent third party who attends the FAT to verify the process and results. This third party can either be a specialized company or a certified individual expert who is not affiliated with either the buyer or the supplier. The reasons for including a third-party witness are:

• To ensure impartiality and objectivity in the testing process.
• To provide expert insights that might be beyond the technical capability of the buyer’s team.
• To increase confidence in the test results among stakeholders.

Suppliers of third-party witnessing services

Several global organizations provide third-party witnessing and certification services. Some of the well-known suppliers include:

• SGS
• Bureau Veritas
• Intertek
• TÜV SÜD
• Lloyd’s Register

These companies specialize in testing, inspection, certification, and verification services across various industries.

When is it Used?

Third-party witnessing is typically used in the procurement of:

• High-value or critical equipment.
• Products that require compliance with stringent safety or environmental standards.
• Custom machinery where failure can result in significant operational downtime.

Impact on RFQ and Supplier Delivery

Incorporating FAT and third-party witnessing in the procurement process affects both the RFQ and supplier delivery:

• RFQs must specify that FAT is required and that it will be witnessed by a third party. This specification should include details about the scope of the tests, the standards to be adhered to, and any specific qualifications the third party should have.
• Suppliers must be prepared to accommodate third-party witnesses and ensure that their facilities are accessible and equipped for conducting thorough tests. This requirement can affect their delivery schedules and may involve additional costs.

Typical Steps During “Witness by Third Party”

1. Preparation and Planning:
   • Agree on the FAT protocol and schedule.
   • Select and appoint a qualified third-party witness.
2. Conducting the FAT:
   • The supplier performs the test as per the predefined checklist or standards.
   • The third party observes the test to ensure compliance with the agreed procedures.
3. Reporting:
   • The third party provides a detailed test report, noting any non-compliance or issues observed.
4. Validation:
   • If the equipment passes all tests, the third party validates the results, often providing a certificate or seal of approval.
5. Feedback and Rectification:
   • If there are issues, the supplier must rectify them before re-testing or shipping. The third party may need to re-witness these corrective actions.

Including FAT and third-party witnessing in procurement processes ensures that equipment meets operational and safety standards before it is shipped, reducing risk and potentially costly downtime due to equipment failure. This rigorous approach is essential for critical and high-value procurements.

Factory Acceptance Test (FAT) protocol

A Factory Acceptance Test (FAT) protocol is a crucial document that outlines the procedures and criteria for testing equipment at the manufacturer’s site before it is shipped to the purchaser. The FAT protocol is typically detailed and tailored to ensure that the equipment meets all contractual specifications as agreed upon between the buyer and the manufacturer. Here’s an explanation of the typical content found in an FAT protocol:

1. Introduction

• Purpose of the Test: Clearly state the objective of the FAT, which is to verify that the equipment functions according to its design specifications.
• Scope of the Test: Outline the specific equipment or systems to be tested.

2. Test Details

• Equipment Identification: Provide details like model numbers, serial numbers, and any other relevant identification information.
• Test Equipment and Tools: List all equipment and tools required for conducting the FAT.

3. Test Criteria and Methodology

• Performance Criteria: Define the performance standards that the equipment must meet. This includes operational capacities, speeds, and any other relevant performance indicators.
• Test Procedures: Describe the step-by-step procedures for each test that will be conducted. This should include the sequence of operations, adjustments, and handling instructions.
• Safety Procedures: Specify safety measures and protocols that need to be adhered to during the test.

4. Acceptance Criteria

• Pass/Fail Criteria: Clearly define what constitutes a pass or a fail for each test, including allowable tolerances and parameters for acceptance.
• Documentation Requirements: Detail the types of documents, records, and data that need to be collected during the FAT.

5. Roles and Responsibilities

• Personnel Involved: List all participants in the FAT, including their roles and responsibilities. This may include representatives from the manufacturing team, quality assurance, and the buyer’s technical team.

6. Test Schedule

• Timeline: Provide a detailed schedule for each test, including start and end times.
• Sequence of Tests: Outline the order in which the tests will be conducted to ensure systematic execution.

7. Reporting and Documentation

• Test Reports: Describe the format and content of the test reports that will be generated.
• Review and Sign-off: Outline the process for reviewing test results and the criteria for sign-off by the responsible parties.

8. Post-Test Procedures

• Handling of Non-Conformities: Explain how non-conformities will be handled, including any corrective actions and re-testing procedures.
• Final Acceptance: Detail the final acceptance process once all tests are satisfactorily completed.

9. Appendices

• Supporting Documents: Include any diagrams, schematics, or other technical documents that support the FAT procedures.
• Reference Standards: List any industry standards or regulations that apply to the FAT.

This protocol ensures that all aspects of the FAT are comprehensively planned and documented, providing a clear framework for evaluating whether the equipment meets the necessary specifications before it is deemed ready for delivery.

Sourcing a third-party witness service 

When sourcing a third-party witnessing service for overseeing tests like Factory Acceptance Tests (FAT) or other compliance verifications, it’s crucial to consider several factors to ensure that the service provider is competent, reliable, and appropriate for the specific needs of your procurement and project. Here’s what you should consider along with information about standards that regulate these services:

Factors to Consider When Sourcing a Third-Party Witness Service

1. Expertise and Experience: Ensure the third-party witness has relevant expertise in the specific equipment or systems being tested. Experience in your industry and with your type of equipment is critical for accurate assessment.
2. Accreditation and Certification: Check for certifications or accreditations from recognized bodies. This validates that the service provider adheres to industry standards and maintains high-quality services. Common accreditations include ISO/IEC 17020, which applies to various types of inspection bodies.
3. Reputation and References: Assess the reputation of the provider in the market. Look for reviews or testimonials and ask for references from other clients who have used their services. This can give you insights into their reliability and the quality of their work.
4. Geographical Coverage: Consider their ability to provide services in the geographical location where the manufacturer is based. This includes their legal capability to operate in the country and their physical proximity to the site.
5. Compliance with Standards: Ensure that the third-party can perform testing and witnessing according to the relevant standards required for your equipment and industry. This might include specific international or national standards.
6. Reporting and Communication: The ability of the witness to provide clear, comprehensive, and timely reports is crucial. Assess their reporting format and ensure it meets your requirements for documentation and traceability.
7. Cost: Compare costs between different service providers to ensure you are getting value for money. However, the cheapest option may not always be the best if it compromises on other critical factors.
8. Insurance and Liability: Verify that the third-party witnessing provider have adequate insurance cover, including professional indemnity insurance, to protect against any potential liabilities arising from errors during the witnessing process.

FAT and third-party witnessing is used as part of the sourcing process and is relevant for the tactical buyer role. Learn more about Sourcing in the bundle The sourcing engine room – a modern sourcing process. Learning about managing Engineering Change from Dave Barr.

The Sourcing Engine room is build around three courses presenting the basics of a modern sourcing process. Learn about the key activities when preparing, negotiating and implementing a new improved supply chain.

Note: Illustration to the blogpost “The role of third-party witnessing” is created by CHAT-GPT on April 21, 2024.

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