Factory Acceptance Testing

Factory Acceptance Test (FAT) for Custom Automation Equipment: Balancing Technical Standards, Business Reality, and Project Risk

By HONZER · 2026-07-17

For companies purchasing custom automation equipment, Factory Acceptance Test (FAT) is often considered the final checkpoint before shipment.

Introduction: FAT Decisions Are Not Only Technical Decisions

For companies purchasing custom automation equipment, Factory Acceptance Test (FAT) is often considered the final checkpoint before shipment.

The expected process is straightforward:

FAT completed according to requirements → Equipment accepted → Shipment → Payment → Site Acceptance Test (SAT)

However, real industrial projects are rarely that simple.

In customized automation projects, FAT often becomes the stage where technical requirements, supplier responsibility, customer expectations, and commercial interests meet.

The most difficult FAT decisions are usually not about whether a machine can operate.

The real challenge is:

When the equipment does not fully meet requirements, should the project strictly follow technical standards, or should both parties consider business reality and negotiate a solution?

This is the core challenge of automation equipment risk management.

A professional FAT process is not designed to reject equipment.

Its purpose is to identify risks before shipment and prevent higher costs after installation.

1. FAT Problems Are Not Equal: Five Levels of Acceptance Decisions

In real factory environments, FAT findings should not be treated as a simple “pass or fail” decision.

For customized automation equipment, problems usually fall into different risk categories.

Level 1: Minor Corrective Issues

These are relatively low-risk problems.

Examples include:

incorrect equipment labels;
incomplete documentation;
software interface adjustments;
minor appearance improvements.

These issues usually do not affect the core function of the machine.

The supplier can normally complete corrections before shipment.

The key requirement is clear responsibility and completion tracking.

Level 2: Engineering Optimization Issues

Some FAT findings require additional engineering work.

Typical examples:

PLC program optimization;
mechanical alignment adjustment;
sensor position improvement;
process parameter tuning.

These issues are common in custom automation equipment projects because every system is developed based on specific customer products and processes.

From practical factory experience, many automation problems are not caused by poor manufacturing quality, but by insufficient process validation during development.

For example:

A production line may achieve the expected cycle time during short testing, but after an 8-hour continuous run, repeated positioning errors or sensor instability may appear.

In these cases, the important questions are:

Who owns the correction?
What is the completion deadline?
How will the improvement be verified?

Level 3: High-Cost Modification Risks

The most difficult FAT situations involve major technical changes.

Examples:

replacing critical components;
redesigning mechanical modules;
changing the original process solution;
modifying key automation functions.

At this stage, FAT becomes a business negotiation.

The supplier may consider:

“The equipment was designed and manufactured according to the agreed technical solution.”

The customer may consider:

“The equipment has not achieved the production requirements.”

Both sides may need to evaluate:

modification cost;
technical feasibility;
production value;
responsibility allocation.

Possible solutions include:

supplier absorbs the cost;
customer shares the cost;
both parties modify requirements;
controlled acceptance with improvement plans.

This is why FAT is not only a technical inspection.

It is also a risk-based decision process.

Level 4: Requirements That Cannot Be Fully Achieved

In some projects, FAT reveals that certain requirements cannot be completely achieved.

The reasons may include:

product design changes;
immature production processes;
unrealistic initial expectations;
limitations discovered during development.

The wrong approach is to immediately assign blame.

A professional approach is to evaluate:

Is the original requirement technically realistic?
What is the production impact?
What is the cost of achieving the target?
Is the improvement value worth the investment?

Sometimes a negotiated acceptance is not a quality compromise.

It is a rational project decision based on total value.

Level 5: Additional Requirements During FAT

Another common issue is new customer requirements appearing during acceptance.

For example:

“The equipment is almost completed. Can this additional function be added before shipment?”

However, new requirements are not equipment defects.

They are project changes.

Both parties should clarify:

whether the change will be implemented;
additional cost;
delivery impact;
validation requirements.

Without clear management, new requirements can create unlimited project risks.

2. FAT Standards vs Business Reality: Where Is the Balance?

A common question in industrial projects is:

Should FAT follow standards strictly, or should companies consider business relationships?

The answer is not simply choosing one side.

A completely rigid FAT approach may create:

unnecessary delays;
increased modification costs;
damaged supplier relationships.

However, excessive flexibility may create:

unclear responsibility;
uncontrolled technical risks;
future production problems.

Professional industrial project management requires balance.

The goal is not maximizing one party’s short-term benefit.

The goal is maximizing overall project value.

This is the essence of industrial project negotiation:

Technical standards define expectations, while risk management determines practical solutions.

A mature FAT process should clearly define:

acceptance criteria;
defect classification;
correction responsibility;
timeline requirements;
SAT conditions.

When both parties understand the risk boundary, FAT becomes a tool for cooperation instead of conflict.

3. Why Shipping Equipment Before FAT Completion Creates Larger Risks

One of the biggest risks in automation projects is allowing unresolved FAT issues to move into SAT.

The normal process should be:

FAT verification → Problem resolution → Shipment → SAT → Production validation

However, some projects choose:

FAT problems remain → Shipment → SAT problem solving

This decision often transfers risk instead of solving it.

For suppliers:

original engineers may leave;
equipment knowledge may disappear;
troubleshooting becomes slower;
additional engineering costs increase.

For customers:

production schedules may be affected;
responsibility becomes unclear;
onsite modification costs increase.

A real industrial case demonstrates this risk.

A manufacturer purchased a customized automation production line.

Because the customer’s own product development was not fully completed, the equipment supplier performed basic FAT verification and shipped the equipment.

The expectation was to complete SAT soon afterward.

However, product changes continued for nearly two years.

During this period:

customer project managers changed;
procurement personnel changed;
original supplier engineers left.

When SAT restarted, the new engineering team struggled to understand the original PLC logic and equipment design decisions.

The supplier had to spend more than two months reviewing programs, modifying hardware, and repeating debugging activities.

Eventually, both sides reduced some requirements and completed acceptance.

The lesson is clear:

Unresolved FAT risks do not disappear. They usually become more expensive over time.

4. Common FAT Management Models in Global Manufacturing Projects

Different companies use different approaches to control FAT risks.

1. Customer Internal FAT Team

Large manufacturers often create cross-functional FAT teams including:

production;
process engineering;
quality;
safety;
project management.

This provides comprehensive evaluation but requires strong internal resources.

2. Supplier Reputation-Based Acceptance

Some companies rely on long-term supplier relationships.

This can improve efficiency.

However, trust cannot completely replace formal risk management.

3. Third-Party Inspection

Some buyers use external inspection companies to verify equipment operation.

This reduces management workload.

However, checking whether a machine runs is different from evaluating whether it can support stable production.

4. Independent Industrial Risk Consultant

For complex automation equipment projects, independent risk assessment provides another option.

An independent industrial risk consultant does not replace suppliers or customer engineering teams.

The role is to provide an objective evaluation of:

technical risks;
supplier capability;
FAT acceptance risks;
delivery risks;
production implementation risks.

For companies purchasing customized automation equipment internationally, this independent perspective can reduce information gaps and improve decision quality.

Conclusion: FAT Is Not About Rejecting Equipment, It Is About Controlling Future Risk

Customized automation equipment projects are always a combination of technology, engineering experience, and commercial decisions.

FAT is not simply a final inspection.

It is a critical risk control stage before equipment enters production.

The most professional FAT approach is not the strictest approach, and it is not the most flexible approach.

It is the approach that creates the best balance between:

technical requirements;
project reality;
supplier capability;
customer production goals.

For manufacturing companies working with China-based automation suppliers, professional FAT management helps identify problems before shipment rather than paying higher costs after installation.

Honzer Industrial Risk & Consulting provides independent FAT inspection, supplier technical risk assessment, and customized automation equipment delivery risk control services for global manufacturing companies.

The objective is simple:

Identify risks before production begins, not after problems occur.

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