This is a serious situation that requires immediate and decisive action. Moving an order to a different factory without your explicit consent is a major breach of trust and contract. Here's a breakdown of the situation, potential reasons, risks, and crucial steps you must take:

1. Cost Reduction: The new factory offers significantly lower labor or material costs, increasing the supplier's margin.
2. Capacity Issues: The original factory is overloaded, behind schedule, or has equipment failure. The supplier finds a "quick fix" without consulting you.
3. New Partnership/Incentive: The supplier has a new relationship with the alternate factory or receives incentives to use them.
4. Quality/Compliance Issues (Hidden): The original factory might be failing quality checks or facing compliance problems the supplier hasn't disclosed. Moving it might be an attempt to hide this.
5. Logistical Convenience: The new factory might be closer to the supplier or other shipments, reducing their logistics costs.
6. Lack of Respect/Procedures: A poorly managed supplier who doesn't value your business or lacks proper change control procedures.

Major Risks for YOU:

1. Quality Degradation: Different factories have different equipment, skill levels, quality control systems, and material sources. Product consistency and quality are highly likely to suffer.
2. Compliance Violations: The new factory may not meet your required standards (e.g., ISO, BSCI, Sedex, specific industry certifications, labor laws, environmental regulations). This could lead to customs issues, fines, or reputational damage.
3. Intellectual Property (IP) Theft: Moving production increases the risk of your designs, processes, or proprietary information being leaked or copied.
4. Delivery Delays: The new factory may have its own capacity issues, learning curve for your product, or logistics challenges, leading to late shipments.
5. Increased Costs: While the supplier saves money, you might face unexpected costs (e.g., re-qualification, air freight due to delays, higher defect rates, lost sales).
6. Reputational Damage: If defective or non-compliant products reach your customers, your brand suffers.
7. Loss of Control: You lose oversight and direct influence over critical aspects of your product's manufacturing.
8. Breach of Contract: This action almost certainly violates your purchase agreement.

Immediate Actions You MUST Take:

1. STOP the Shipment (If Possible): Contact the supplier immediately and issue a formal, written instruction (email is traceable) demanding they cease all production and shipment of your order from the unauthorized factory. State clearly this is a breach of contract.
2. Gather Evidence:
   • Communications: Collect all emails, messages, calls where the supplier informed you (or tried to inform you) of the move. Note the timing and tone.
   • Documentation: Review your original Purchase Order (PO), contract, and any previous communications regarding the order.
   • Proof of Move: If you have proof (shipping docs, photos, inspector reports) showing production started/moved, secure it.
3. Demand Full Explanation & Documentation:
   • Formally request (in writing) the exact reason for the move.
   • Demand the full name, address, and contact details of the new factory.
   • Demand immediate access to the new factory for an audit (see below).
   • Request all documentation related to the new factory's qualifications, certifications, and capability to produce your product to your standards.
4. Conduct an Urgent Factory Audit:
   • Do NOT rely solely on the supplier's word. Immediately dispatch your own quality inspector or hire a reputable third-party inspection agency.
   • Audit Scope: Must include:
     • Factory registration and legal status.
     • Relevant certifications (ISO, BSCI, Sedex, specific industry certs - verify authenticity).
     • Production processes and equipment suitability.
     • Quality control systems and procedures.
     • Material traceability.
     • Labor practices (audit if possible, or demand proof).
     • IP security measures.
     • Capacity and capability assessment for your specific product.
   • Goal: Determine if the factory is actually capable and qualified to produce your product to your required standards before any more work is done.
5. Review Your Contract (Legally):
   • Scrutinize clauses related to:
     • Change Orders: Is there a formal process requiring your written approval for changes like factory relocation?
     • Subcontracting: Does it explicitly prohibit subcontracting without prior written consent?
     • Quality & Compliance: Requirements for maintaining standards and audits.
     • Termination Rights: What are the grounds and procedures for terminating the contract due to this breach?
     • Force Majeure: Does the supplier truly have a valid FM claim (e.g., natural disaster destroying the original factory)? Unlikely for a routine move.
     • Governing Law & Dispute Resolution: Where will disputes be handled?
   • Consult a Lawyer: If the order is significant, the breach is clear, or the supplier is uncooperative, consult a lawyer specializing in international trade or contracts immediately. They can advise on your legal rights, potential remedies (damages, specific performance, termination), and formal demand letters.
6. Communicate Firmly & Professionally:
   • All communication should be in writing (email is fine, but be clear).
   • State the facts: "You moved PO [Number] to [New Factory Name] without our prior written consent, as required by Clause [X] of our contract dated [Date]."
   • State the impact: "This action constitutes a material breach of contract and poses unacceptable risks to product quality, compliance, and delivery."
   • State your demands: "We demand immediate cessation of production at the unauthorized factory. We require access to [New Factory Name] for an audit within [Timeframe, e.g., 48 hours]. We require full documentation... We require confirmation that production will resume at the original factory..."
   • Set consequences: "Failure to comply will leave us with no alternative but to [e.g., terminate the contract, seek damages, suspend future business]."
7. Make a Decision:
   • If the New Factory is Viable & Supplier Cooperates: Only consider this option if:
     • The audit passes comprehensively.
     • The supplier provides ironclad guarantees, accepts full liability for any costs/defects/delays arising from the move, and agrees to significant price concessions.
     • You have a legally binding addendum to the contract explicitly approving this specific move with all terms and conditions.
     • This is high-risk and often not recommended unless absolutely necessary.
   • If the New Factory is Unqualified or Supplier is Uncooperative:
     • Terminate the Contract: Exercise your termination rights due to material breach. Issue a formal notice of termination.
     • Seek Damages: Calculate losses (e.g., cost of finding a new supplier, air freight for replacement goods, lost sales, rework costs) and demand compensation.
     • Find an Alternative Supplier: Immediately start sourcing a replacement for this order and future business.
     • Report the Supplier: If they are part of a certification program (like BSCI, Sedex), report the breach. Warn your network.

Preventing Future Issues:

1. Explicit Contract Clauses: Mandate written approval for any change in manufacturing location, subcontracting, or significant process changes.
2. Regular Audits: Conduct announced and unannounced audits of key suppliers and their subcontractors.
3. Approved Supplier List: Maintain a list of pre-approved factories. Require suppliers to use only approved facilities or seek approval before adding new ones.
4. Strong Relationship Management: Build relationships with key people at the supplier and the factory level. Make your expectations crystal clear.
5. Supply Chain Visibility: Implement systems to track production location and progress more transparently.
6. Diversification: Avoid over-reliance on a single supplier or factory for critical products.

Key Takeaway: This is a major red flag. Treat it with the seriousness it deserves. Your immediate priority is to STOP the unauthorized production, VERIFY the new factory's capability through an independent audit, and ENFORCE your contractual rights. Never accept such a move without thorough due diligence and a formal, binding agreement. Protect your quality, compliance, and reputation above all else.