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Import & Sourcing in China: How to spot trading companies at trade fair (Hong Kong, Canton)

If you are currently visiting Hong Kong trade show such as Global Sources or HKTDC, or even if you are attending the Canton fair, then you might be looking for valuable and capable vendors able to supply you with high quality products and competitive price. 

At the trade show they are usually hundred and hunger of booth it not thousand. As Hong Kong trade show and Canton fair are usually short (4 days most of time per phase), you might not be able to see everything. As I explained it in other articles of this blog, when purchasing or importing goods from China, you should as much as possible avoid working with trading companies and middle. Previously, I explained that the main issue with this kind vendor profile is that most of time they add up a layer of opacity in the supply chain. Opacity bring complexity to manage the supply chain, particularly when difficulties or control has to be operated on quality management, traceability or even social or environmental compliance.

For this reason, when being at Hong Kong or Canton trade fair you may not want to waste your time discussing with trading companies. In this articles I give a few tips and tricks about how to identify trading companies at trade show in only a few seconds. See below: 

  # Displayed product range

Watch out a product range. Trading companies tend to have a wider range of product displayed on their booth. Quite often they may have a big catalog of products serving them as a one size fit all one stop shop scheme. Hong Kong trading companies have quite often this profile: they act as a one stop shop middlemen. It can tempting to work with such vendors because after all they have everything in one single catalog and they manage all the other parts, yet if you do so, and if the trading company you work with is not transparent with you, you will just loose control on your supply chain

A Chinese factory is usually focusing on one type/category of product because they want to leverage their manufacturing scaling capability on production and want limit investment in R&D. They may have invested in tooling, machines, inventory, and workforce already trained for a certain type of product, so provoking changes in a physical structure is usually not well welcomed because the return on those investment would not be enough substantial.

Obviously some time an assembler may have different type of product but they are rarely too much different. This is at least what I observe from Chinese factories.

  # Company address

After several year of going trough China I can tell quickly if a company is a factory or not. There are mostly two factors you can look at:

First, the level floor in a building where a company is located. If you have already visited chins factories, you probably noticed that factories building in China are rarely taller than 5 floors. So, if you approach a booth in Hong Kong trade show and the company address is on the 32h floor of a building, then you can be pretty sure this company is not a factory but a trading company. 

Second is city typology. Some cities in China are transforming themselves. For example, Shenzhen is currently pursuing a plan to turn around his image of factory city into financial, service and technology city. What does this mean ? It means the government wants to eradicate manufacturing and industrial activity from the city center so they can build big tower for office use. Not only does it enhance the city image as being a modern city but also it is more profitable to build one thousand office in a big tower occupying a small land space rather than a build of 5 floor with only a few offices.

What the government is doing is to push out those « non noble » manufacturing activities out of cities center to the peripheral area. For example, in Shenzhen, the government is pushing manufacturing activities mostly at the north of the city in Baoan, Longhua and Longgang area. There almost no factories anymore in Nanshan (apart a bit in the north of Nanshan), in Futian and Luohu district, very few in Shekou. In Shanghai this is similar: no manufacturing activities near the city center. 

When you understand Chinese cities typologies, you understand quickly which kind of company can be settled where. If you see a factory address in the middle of downtown of Shenzhen, then probably this company is not a manufacturing company but rather a trading. 

Notes about exceptions: sometimes factories are not located in cities center but have a rep office with a show room in the city center. Yet, in this case, the company may indicate both dress on their leaflet, business card and other catalog. Most of time they will mention this address in the city has being a rep office.

  # Company name

IN CHINA

In China, we can tell already a lot from company name. I had the chance to perform company registration in China so I faced the administration and I learnt a lot from it. I also faced the Hong Kong administration for helping with company registration in the past so I also know how it works. 

In China, most of time when you register a company, the name may have to include the type of activity of the company. If for example a company register for an activity of manufacturing, then the Chinese name will include « manufacturing", « factory », « industrial », or « industry" in the name of the company. Similarly, if you register a trading company, then the name of the company may include « trading » or « import export » in the name of it.

It worth mentioning that mostly the company name in Chinese would mention those elements. The english name doesn’t necessarily reveal the nature of a business type, so you would have to search for those terms in Chinese on the company name.

Also, please be aware of the following: company naming style may change from cities to cities. For example, Shenzhen company registration bureau may require to have the nature of the business in the name, but some other cities like Ningbo may not necessarily.

Sometimes, a company may register with a first name such as trading but later if this company transform itself into a manufacturing and trade activities, then the name of the company may include both or only one key words.

A quick way to identify the activities of the company is also to check the business scope of the company via the business license. Normally, a business license will indicate what are the activities handled by the company and the type of product this company get capability to trade or manufacture.

IN HONG KONG

The Hong Kong company registration system is totally different from the Chinese one. When you register a company in Hong Kong, there is no naming convention apart avoiding a few keyword you can not use (« trust, government » are some of them for example). Apart this, you can name an IT company as « IT Manufacturing » if you like. So, you would not get too many information about a hong kong company really just with a name.

How to recognize Chinese companies from Hong Kong companies? Well, not very difficult: Chinese companies name are based on a « Co Ltd » suffix whereas Hong Kong companies are using « Ltd » suffix. If you see a booth with a name finishing with « Ltd » this is a Hong Kong company. Does it mean this Hong Kong company is not a factory. Well, not necessarily. There are some Hong Kong company which own and hold Chinese companies in the mainland for the industrial activities. So, if you see a Hong Kong company, this doesn’t necessarily mean this Hong Kong company is not a holding of another Chinese structure. From my experience, those structure are the most difficult to sort out regarding the trading vs manufacturing dilemma. 

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Hong Kong Trade-show & Canton Fair: 4 advices to save time and increase productivity

If you travel from overseas to visit Hong Kong trade-show and Canton fair, you probably know that those 4 days are usually very short to see a maximum. I have attended Hong Kong, Guangzhou, Shanghai and Beijing trade shows for several years so I know a bit about the challenge, particularly in Hong Kong when you have both Globalsources and HKTDC which are time to time happening on the same date. 

In this articles I explain what is based on my experience the best strategy to optimize productivity. How to see a maximum in a minimum of time:

  # Know the floor map in advance 

The first advice is obviously to be organized and to properly prepare your trip in advance. First, look at the floor map on the trade-show website. Spot on the most interesting product you are interested in, review the exhibitor list, tick in advance which one seems the more appealing to you. 

Sort and categorize by priority order which products are the most appealing to you then build a drawing of the ideal path you should follow to optimize your time. When drawing your path, make it in a organized way go one line of booth after one line. Once you are at the trade-show don’t change this methodology of walking trough the floor.

  # Travel light and comfortable

Let’s say it, walking around a whole day long in a trade show is tiring and exhausting. So, make your life easy, don’t take any heavy luggage with you or heavy back pack. If you have no other choice than having luggage, then make sure they have wheels. Don’t take heavy clothes. Get some comfortable shoes as the floors are usually huge and require you to walk a lot, to stand a lot, to stop and restart so if you don’t have comfortable shoes you will suffer. 

Choose comfort over looking. Don’t feel obligated to wear a suit, a tie, a shirt and some banker like shoes if you don’t feel comfortable in it. Keep in mind this: when you may go to visit your vendor in his manufacturing plant, the boss of the company may be driving a big BMW car but he may also be wearing a short, a t-shirt, and pair of flip flop. He will not care too much if you wear a shirt, a tie or some weston, rather he will look at your order size and the profit he can get from.

  # Don’t take all catalogs unless absolutely necessary, even less the gadgets

When walking though the trade show floor, sales people will jump on you to give you their catalog, give you some gift ask gadget and obviously to get in exchange your business card so they can better send you some information later aka spamming you. Well, even if you have a big bag to potentially carry all those catalog and gifts then I advice you not taking them as it will make you even more tired to carry them, increase your luggage weight. Keep in mind all those catalog can be sent to you via email in PDF format. 

Rather, ask the business card of those gentle chinese sales only and write on it what you were interested in. If they ask yours, then two potential solutions which I usually apply :

First possibility : make a business card dedicated to those vendors which I know will spam me anyway and whatever I ask them to stop doing so. Create an email address: [email protected] so that you never get your own email box being spammed with dirty emails. 

Second possibility : « I have given all my business card already, please take my email : [email protected] and send me more information later » .

  # Don’t enter very booth

It can be tempting to enter every booth to check each product but something I learnt is you should better not do it, especially if like me you don’t want to start wasting your time in useless discussion such as « Sir, where are you from, what product you sell etc… ». 

Rather use the "quick scan from outside booth » methodology to scan the booth and see if something is really interesting. I know sometimes it can be difficult to see products from far away, but once you get used to it you can be hyper productive doing so. If a product really interest you then allow yourself to enter the booth to get further information but try to time box your stay on the booth. 

  # Tips

If you have no time to go yourself to Hong Kong tradeshow because you are busy with something else but still would like to be in touch with the market and the last new products that vendor propose, then I invite you look at this service which we can provide to you here

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China Manufacturing: Prevent Quality Issue using DFMEA process

I having being saying for long time that 80% of quality issue on products comes from design and 20% only of quality related issue comes from manufacturing and procurement causes. On behalf of my clients I have been performing Root Cause Analysis on defectives products for a while now, and I have to admit that very frequently problems initiate from design, conception, engineering and lack of planning more than from manufacturing itself.

When performing New Product Development, there are typically different ways to operate:

The amateurs will start developing straight away their product and will adjust on the fly the design and engineering, and this mass production after mass production while catching fire like a firemen.

The most professional one will plan and spend time at the beginning of the process to attempt to anticipate all the problems that can be identified before they finally occur. The professional will supply with solutions to all those failures even before the design start.

In this article, I explain how a design / engineering process can be optimized, made more reliable and how it can anticipate product failure even before the design and engineering start by using a DFMEA process.

I explain what is DFMEA and how to use it efficiently during the New Product Development phase.

  # What is DFMEA

DFMEA stand for Design Failure Mode and Effect Analysis. I think the denomination already easily translate in what it is but for those who have no quality engineering background, the DFMEA is an organized methodology allowing to identify cause of risks and potential failure which can happen on a new or modified design products and what are the effect of those failure on its environment (user, regulation, related process or product). In short, it identify what can cause failure, what will be the effect of those failure and help to establish patch to avoid those failure. 

The methodology particularly establish a scale related to risk criticality, risk prioritization  so the designers and engineers know on which problem, cause and risk they should focus their effort first.

This methodology was invented in the 1960 during the space race when rocket were exploding without any possibility to perform a root cause analysis post explosion (as all the product was spreader into small piece). Scientists decided to work the way around by attempting to identify potentiel risk or failure during design in a proactive way before problem happens and not just in a reactive way after the rocket exploded.

DFMEA is a methodical and organized approach allowing to anticipate a maximum of potential failure due to design and conception very early in the New Product Development design and engineering process.

  # Why using DFMEA

DFMEA can be considered as an investment. An investment in time, ressources and effort allowing later to avoid having to manage with non quality cost such as fixing, maintenance, recall etc… I don’t know any buyer, importer, retailer or even manufacturer willing to deal with recall, repair and maintenance of the products they sell or manufacture.

The DFMEA process allow to drastically reduce those non quality cost by anticipating issue and by supplying with solution, corrective action and patches during the hardware product development process and not after it. Remember that at the Product Development stage of an hardware product we are still nearby the white sheet of paper so change and correction are still made at lower cost than later on when the product development phase is achieved, even worse than when product is in manufacturing stage or distribution stage.

Modifying a product when it is already in manufacturing stage will involve to perform again some engineering, to perform a validation prototype, potentially to certify again the product (as it is has been modified), potentially to modify tooling, jig or fixture, potentially scrap some stored material, reorganize part of a production line etc… All of this involve a lot of costs and waste.

Modifying a product which is already on the market in distribution mode will be even worse because on the top of the all the modification which have to be made on manufacturing and engineering, on the top of this, some recall, repair or replacement of product to customer might be necessary. In this case the non quality cost increase drastically and may even eat up all the margin generated by the sale of the product.

From what I see, many factories and manufacturers who design (or pretend to design) products in Asia just skip or botch this process of DFMEA. Most of time, they don’t even know what is is. it is still actually an important one when you consider mass production of a physical product as non-quality cost scale quickly when mass production is considered.

If you are about to develop a new products and are not yet entered into mass production phase, and if you have not perform DFMEA yet, then I highly recommend you to stop everything you are doing now and to perform a DFMEA before going further.

  # How to perform DFMEA

The DFMEA process work as follow: 

Step 1: Identify the stake holders which may have an influence on design, engineering, manufacturing, usage, and maintenance of your product. Take all those people and lock them in a room one or more day to brain storm all the possibile failure which may happen using the next steps below

Step 2: Establish the scope of the DFMEA.

Step 3: List all the functions of your products in a table

Step 4: Establish all the potential failure possible on each function of your product and list them in your table face to each function

Step 5: For each failure establish the list of all the consequences of those failures on the product, user, environment, regulation and other related third party product or other systems around. List them in your table face to each failure.

Step 6: Establish the severity S of each failure with a rating for this severity from 1 to 10, where 1 is the less significant and 10 is the more catastrophic, and report it to the table in a new column face to each failure type.

Step 7: Establish all the potential cause of those potential failure and list them in the table in front of each failure.

Step 8: Establish the occurence rating O for each potential cause from 1 to 10, where 1 is very unlikely and 10 is the most inevitable to occur, and report it in the table in a new column

Step 9: For each cause list the current process control in place and associated and report it in the table in a new column aligning with each cause.

Step 10: For each control establish the detection rating D from 1 to 10, where 1 is the control has the maximum chance of detecting the failure or the cause and 10 has no chance to detect the failure or the cause, and report it in the table in a new column aligning with each cause.

Step 11: Calculate the Risk Priority Number (RPN) by multiplying S by O by D, and report it in the table in front of each cause in a new column

Step 12: Calculate Criticality by multiplying S by O, and report it in the table in front of each cause in a new column

Step 13: Identify and list recommended actions to prevent those failures by starting with item which got highest RPN and highest criticality.

Step 14: For each actions, identify and list who is responsible for it and the expected target completion dates

Step 15: Implement the actions and update the FMEA table to update S, O, D , RPN and Criticality. Normally all of those should have lowered in number.

  # When to implement DFMEA

Ideally the DFMEA should be implemented during the design phase and as soon as possible as the product development phase is started  but in this case it should be continually implemented at different stage of the process. If you implement it to early, then the engineering is not yet established. If you implement it too late then the product development moved forward too much yet and will imply a higher modification cost.

  # Working with an example

An electronic product such as a DVR product is supposed to be installed in a fleet of vehicle such as bus. The vehicle is going to be used in Alaska for transporting school kids from remote location to city. Bus number : 200. Expected unit cost of the system : 500 USD. Expected setup fees to install the system : 500 USD. Expected maintenance cost : 200 USD / year.

Total expected fix cost: 200 bus x 1200 = 240 000 USD. The client think to spend around 1 to 2% (around 5000 USD) of this budget on DFMEA process to avoid to inflate maintenance cost which if the system fail will cost him to have someone to fix to around 500 USD / day. If 200 pieces fail, it will generate an extra cost of 100 000 USD.

Hence, during the design phase, instead of just relying on his asian manufacturer, he decided to conduct a DFMEA by appointing a consultant to lead the DFMEA. The consultant setup several days meeting with engineers, designers, manufacturers and customers, sit them on a table in order to optimize the design before anything else. 

As the product is an electronic product and is setup in a vehicle riding in a very cold region of the USA, already a few potential failures and causes are identified: life cycle of components, temperature and humidity range acceptance of electronic, reaction of the assembly to the vibration of the engine (unsoldering of component), temperature reaction for cable, etc….

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China Import: How to prepare quality inspection checklist

If you are about to place an order to a manufacturer in China or in Asia, before signing your contract / purchase order and sending your deposit you better establish and make validating your quality inspection checklist by your vendor. Many importers and international buyers don’t prepare their orders well enough and don’t take the necessary time to establish quality inspection check list to secure their order at maximum and reduce risks related to quality.

Quality inspection checklist are useful because they help to establish what is acceptable and what is not. This is not only a contractual way to protect yourself against a potential « you didn’t tell me you didn’t accept this kind of deviation » speech but rather a way to assist your vendor to make his own quality control process better by himself before you send a third party inspection company to check your goods.

Special attention to quality inspection checklist should be cared of when your order is a bit in rush and that you can not afford to have a reworking or repairing process to be operated post mass production after a quality inspector identified some defects on your production.

Here below are a few guidances about how to prepare quality inspection checklist efficiently.

 # List the expected defects

Obviously the quality inspection checklist as its name imply will list the expected defects you may expect to find on your product. If you have manufacturing experience and a good methodology you may be able to establish easily the defects list. My personal methodology to do this work is actually to study the manufacturing process and to perform a PFMEA to attempt identifying potential risks of failure and defect generation on certain particular manufacturing processes. 

For example, I know that gluing process performed by hand where the workers will have to deposit glue with a glue tube have a higher potential risk to generate defectives units than gluing process performed with a machine which for every shot will deposit always the same quantity of glue.

To understand which process is at risk, you have to make the effort to understand the manufacturing process operated on your product manufacturing. To understand the manufacturing process operated on your product mass production either you have already experience about it and it is wonderful, or you go onsite yourself to understand it, or you send some factory auditor to perform a manufacturing audit at your manufacturer facility and report to you what was audited so you can better understand the manufacturing process operated on your production.

Once you have a proper understanding of the manufacturing process, you can then identify which process has more chances to generate more defectives than other. This is those process you have to focus your effort on because those process will be the one to give you the more trouble and the more chance to have reworking or repairing your product post production.

Despite all those efforts you would deploy to attempt avoiding defectives product, you may forgot to list some defects type in your defective list. If you are worry of this happening, then the best way to process is to perform a quick inspection early in the manufacturing process via an initial production inspection to identify potential defects you may have forgot to list in your quality inspection check list.

If you have difficulties to establish those quality inspection check list for your product, we have capabilities to assit you via a consulting service, so that you can benefit an experienced team to free your time 

# List the tests you need to perform on product

On the top of listing defects you expect to find on your product, you may also identify some functional non conformance . Those are non conformance related to functionality of your product and may quite often be findable only when testing the product in real condition.

Here, need to be differentiated lab testing and on site testing.   

Obviously, the more technical your product the more test needed: example testing promotional gift pen testing may only relate to testing the pen can write a certain distance without having the ink to dry and the caps can close perfectly without play while opening and closing 20 or 30 times. On the other side, if you product is a mobile phone, then the testing list might be much longer: test screen brightness, sound speaker, connection capability to wireless (bluetooth, wifi, 3G, 4G), capability to install and setup mobile apps, etc...

# Use pictures

Most of people only use words to describe what they accept and what they don’t accept. Yet, based on my experience and following my lean manufacturing principles I always advise to you visual and easily understandable way to explain your partners what you want and what you don’t want.

So, when you prepare your quality control and inspection check list make sure to include pictures, drawing and ideally some defectives and validated sample to show your vendor what is acceptable and what is not. For example, you may supply two pictures  : one picture showing an area of your product with the defect and one picture showing the same area without the defect. So that your manufacturer can compare his product to the pictures easily.

# Indicate criticality of defects

As most of importers use sampling and AQL methodology to establish the acceptability of their production lot during inspection process, this methodology involve to consider threshold based of defect rate based on defect criticality. When you list a defect in your list you have to indicate the level of criticality this defect is on your product.

Not all defects are critical, some defects are minor, some are major too. Your manufacturer may become mad or simply not accept your order if all the defects you list in your defective list are critical and subject to make your quality inspection be failed. Be realistic and honest in your approach. What is really major and make your product not sellable easily. What is minor and make your product sellable without any problem on your market. What is critical and make your product totally unsellable because dangerous.

# Choose threshold and gauge wisely

If you use the AQL standard to determinate your lot quality, then you have the choice to decide which gauge should be used. The AQL gauge are simply a translation of a percentage of accepted defect based on criticality of the defects found on your lot. 

When you appoint a quality inspector to inspect or perform a quality control for you, then you have to notify your inspector what are the gauges used for critical, major and minor defects quantification. The lower the gauge the lower the percentage of defects being accepted. Obviously it is good for you to have a low rate of defectives accepted, but in this case your inspection may fail often as the tolerance for mistake of your supplier will be tightened. 

Most of people use AQL level as 0 for critical, 2.5 for major and 5 for minor without really understanding what does it imply. Quite often they are also amazed to find defectives in their production. Well, when you accept an AQL level higher than 0, the chance you get defective in your production are usually not equal to 0.

BONUS

Below I give a tip which can help you to reduce considerably your problems when importing from China

# Supply them with solution

If you had the courage to spend time generate a quality inspection check list then you better make one step further to anticipate in a proactive way how to solve problem related to those defectives.

An easy mindset would be to think : « this is not my problem, this is the supplier fault, he has to deal with those problems, I am just buying products. Period». 

Well, you may think this way but you expose yourself to several risks: 

First adopting a such attitude will make that indeed the supplier has to manage his problem himself alone. What about if they have no idea about how to manage them ? Normally, it should not happen if they have experience on the product they manufacture but in some rare case when you would work with a small factory for a small order or with a small factory which is 50% cheaper than the competition then you might find out they actually don’t know how to solve their problem. So, if you have capability to help them by supplying them with a solution to avoid defectives generation by implementing a simple solution then you better anticipate and supply them a solution.

Second, if they indeed face problems and that you are not a big buyer, then they may not want to repair or rework your goods because for them it involve extra cost, hence reduced margin. You will then be a in situation where the vendor got your goods (partly defective for sure) and will have your deposit as collateral. You are now in a situation where you have to negotiate endless to obtain a reworking of your goods otherwise you loose your deposit and you don’t get your goods to be shipped.

So, in order to avoid such situation, I invite you to anticipate those defectives which would be generated and which you could not accept while simultaneoulsy anticipate a solution to avoid or correct those defects before your goods to be packed in their packaging and shipped to overseas. Having a proactive approach will occur an extra small over charge of work load but may save you a lot of time and hassle later if things start to go wrong.

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China Manufacturing Optimization: What are Good SOP (Standard Operating Procedure)

# They indicate the tools, jig and other accessories needed to perform the task.

Best SOP I have seen indicate what are the tools necessary for the worker to perform his work properly. Do they need a particular screw driver, gauge, caliper or anything else to make their work properly ? This should be indicated clearly and ideally those tools, jig and other accessories location should be indicated too with reference number to avoid workers to use wrong tools. Most of time production manager will be in charge of distribute and set those tools but yet it doesn’t cost much for the worker to verify it quickly when he receive it.

# They are easily readable

This is one of the fundamental principles of lean manufacturing and 5S methodology : make everything visual and keep it simple. If you want your worker perform well, they first need interested in what they do. I found out that many workers are actually happy to learn and not just executing like robots all day long. 

Make your documentation attractive and "read appealing » so your worker will have the drive to read them at least once, or better even every time before they restart working (rare case).

# They are in color

If like me you have audited a high number of factories and manufacturer you have probably noticed that many manufacturers indeed print SOP, but they print in black and white for saving money. Most of good SOP include pictures rather than just text, but have you noticed how often those SOP are with pictures which are unreadable ? This is no use to make SOP if workers can not read and understand them easily. By printing them in color, most of time pictures are more readable, hence your SOP more "read appealing ».

# They are really read before starting production 

There is no use to make SOP and put them on the line if they are not used. I don’t count how many time I have audited factory with SOP on the line on the top of the workers head while questioning the workers about what is written on the SOP and hearing an answer totally different from the truth of what is written on the SOP.

# They are bilingual

Very very very few factories does it (because most of time their clients never ask it to do it) but still it is very useful to have SOP in bilingual: local language one side and english on the other. Indeed, having local language is best to have local workers and production managers to be able to read the documents. 

On the other side, if you are a careful and organized buyer you might want to be able to read those data sheet. Obviously, you may not be fluent in Chinese, Cambodia, thai or any other language where your production is taking place so having them in English is a great advantage to be able to verify and control that manufacturing process are according to what it should be.

# They are on one sheet of paper

Ideally, it is better to have everything on one single page. It is not always possible, but if you have the chance that your SOP can be on only one page then you should do it. There is nothing more troublesome and boring than having a very long. If more than one sheet of paper is needed (what is not recommended but sometime necessary) then make sure the page have page number such as 1/2 and 2/2 so that the reader will know another page is present on the SOP.

# They are placed in front of the workers and are easily available

There is no use to make some SOP or any other documentation if nobody read them. The best way to have your employees to read and use SOP really is to have this SOP in front of them all the time, so if they have a doubt they don’t even need to stand up to read a SOP placed above their head, they just need to turn their eyes to read about what is written on the SOP.

# BONUS

# They are divided mostly in three essentials parts:

I typically divide my SOP in three parts:

One part related to local IQC the parts received by the workers. 

Imagining a chain of N workers on a line, typically here the best is to make the N worker to briefly inspect and quality control the work done by the worker N-1 before starting anything else. So that if the worker N-1 didn’t do his work properly then the worker N become the quality gate which doesn’t pass a defective product on the next step of the manufacturing flow. This is like a qc watchdog made at every single step of the manufacturing process and it is very efficient. In case the part is defective, the worker N can either send it back to the worker N-1 or even better, sort it in a special red box for defective product. Having them in a special box instead of returning them directly to the worker N-1 give the advantages that defective rate on a particular process can be measured, analyzed and control.

One part related to the work which have to processed by the worker himself: Here a description of the work to be done is indicated on the SOP. Tools used to perform the work, which parts have to be used etc...

One part related to local FQC: Here you can make your worker to perform his own QC on the work he has done. You can indicate criteria and other key indicator which determine whether the work was made properly or not. Logically, this FQC phase should be reported as the IQC of the worker N+1. Self inspection can be visual, dimension or anything else.

# They are in video

This is my favorite methodology to train workers: When you are about to start a mass production with a full line of workers which don’t know the work they have to achieve, then you should obviously train and teach them before starting executing the mass production. 

Yet, when you have a lot of worker on a line, you may not have enough time or resources to train them all in once simultaneously. If you start to train a workers, some others are waiting doing nothing as they don’t know what they have to execute yet. 

If you want to optimize your time when teaching your workers, the best methodology is probably to make some video training that workers can watch before starting to work on the line. I consider that those video training for workers are parts of the documentation that should be done before starting any mass production. To do so, take a camera or even your mobile phone. Find a way to have this camera to focus and record on the area where your hands are located. 

Take the position of a worker executing a task on a working unit, start recording with your camera, start processing what the worker should do and in the same time comment in the local language of the worker what should be done, how it should be done, what are the point of cares.

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Difference between Manufacturer Quality Inspection vs Third Party Inspection

Many people get confused about the difference between manufacturer quality control and third party quality control operations. Sometimes, people tell us “ I don’t need quality control services because my manufacturer already do quality control by himself”.

Quite often, those are the same people who come back to us asking for a third party quality inspection to be done at their manufacturer place. Most of time they usually learn on the spot why a third party quality inspection agency in China or in Asia can help them to solve quality issues they just didn’t anticipated thinking that their manufacturer would have already properly performed quality control operation before telling their client that their products are ready to ship.

In this article I will explain why having a third party inspection company in China or in Asia can actually be useful to importers who got manufacturers who are already supposedly inspecting goods before declaring them ready to ship.

  # The biased effect

If you understand how manufacturing and supply chain operations works, you probably understand that quality control at a manufacturer place is acting as a filter or quality gate for badly manufactured goods. Concretely, this means that products which are not reaching quality standard are stopped at this manufacturing step process and rejected. Sometimes, the goods are just trashed but most of time they are fixed, repaired and reintroduced in the production flow.

Now if you understand that reworking, fixing and repairing a defective good would simply cost money to the manufacturer as it generates wastes, extra production cost and extra overhead. Understanding this, you quickly understand that a manufacturer have low interest in being too strict on filtering. This kind of problem particularly happen when a factory launch a new product and that you are the first customer to order this product. Quite often, the production is not very well stabilized (because the product is new) and the defective rate is higher than once the production is stabilized. If you are buying a product your supplier has never done before, then watch out...

Hence, there is a bias effect between being judge and jury. Obviously the manufacturer can be tempted to be less strict on judging the quality of a product since declaring a product as defective would directly affect its profit margin. So the judgement of what is good and what is not might be biased.

The goal of a third party, as it name imply it is to act neutrally toward manufacturer and toward customer to report only what is a objectively found. A third party quality inspection company, as it doesn’t get any financial interest whatever a product is declared as defective or not, it will make the judgement totally neutral.

  # Manufacturer QC is performed by someone who see the same product every day

Imagine, you are a quality control operator on a production line. All day long you see the same product going in front of you. Of course, because of this you are used to know well the product. Sometimes you know it so well that you don’t even see problems. When you are in a routine job, you easily may lose focus on what you do and you have more chances to miss spoting some defectives.

  # Sampling vs 100%

One may difference which appear when a third party quality inspection company perform a quality inspection operation is that the third party will most of time perform quality inspection using sampling methodology. Indeed, as product volume orders are usually important, considering that inspecting all products would add up on bill cost of the importers, most of time statistical sampling methodology is used  to perform quality inspection.

Normally, the manufacturer should perform a 100% inspection on all products being manufactured in their facilities. Technically, they should have a Final Quality Control (FQC) setup at the end of the production line to filter and reject defectives products. The problem is as mentioned earlier in this article, sometimes defectives still pass through the filter either voluntarily or not. Yet, they are passed…

In some special cases the third party inspection company may also perform a 100% inspection if the importer require it. This kind of practice is usually used for goods with high added value such as luxury goods.

  # The third party as a second filter safeguarding your production

As based on the understanding that the third party usually inspect based on sampling, does it means that the third party inspection company doesn’t inspect enough pieces and not as much as the manufacturer ? Does it means that the third party inspection company action is useless ?

Well, not at all because the role of the third party inspection company is rather to act as a second safety filter and to spot at the most affordable way that the first filter didn’t function properly as it should have. As explained previously having a second pair of unbiased eyes can hep to spot what the first filter potentially biased didn’t see.

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Quality Inspection & Audit in China & Asia: How to make your supplier accepting them

Reluctancy of supplier, vendor or manufacturer in China & Asia to receive a quality inspector or a factory auditor is sometimes a problem for importers who need to reduce risks of getting scammed or disappointed before placing order to a new supplier which they don’t know very well yet.

We have several clients who had this issue in the past and we have helped them to finally obtain an agreement from their Chinese or Asian supplier to audit or inspect as they initially wanted.

In this blog articles you will learn a few technics and arguments you can use to persuade your vendors to accept to be inspected or audited by a third party inspection company like Asia Quality Control.

Please find the list of technics and arguments below:

# Explain why you want to do it and play partnership game

The best way to make your supplier or vendor to accept a quality inspector or a factory auditor to come inspecting goods or a factory is to play the game of using those tools not for giving pain or fine but to help the supplier to work even better so they can get more order and more clients. I don’t know any vendors who is not happy to get more clients, because it means more business, hence more revenue. All asian suppliers are always happy to get more customers but to do so sometimes the factory or manufacturing conditions have to been improved to give better results or better image when a customer come to visit factory. 

Sometimes also suppliers have difficulties. They may not tell you and may keep those problems for themselves. As you know dealing with problem alone is always more painful than sharing problem with someone else to attempt to find a solution together. This is the way you should communicate with your supplier : «  Inspections and audits are tools to help you get more order and to share with us the problems you may have so we can also help you to solve them »

Try to explain them that the quality inspector or factory auditor is not a policeman in charge of give punishment or fine. I remember, that inspecting in the past at a vendor who was quite young that he was scared at the idea of getting an inspector (me at the time) to inspect the goods he was supposed to ship to an australian buyer. At that time, I remember he was almost grumbling of scare. I was young at that time, but I remember I had to ask him to calm down and breathe and that I was not here to give him trouble, just to verify that all the goods he was supposed to ship where according to the specifications of the buyer.

# Explain what will be done

Nowadays, more and more vendors are used to receive quality inspectors or factory auditors, but still some don’t. If you are not sure wether your supplier is used to receive factory and quality inspectors, then you should brief them a bit in advance so they know what to expect. Roughly speaking you should explain them how the quality inspection or factory audit will be performed. We have in each pages of our services an explanation of what do we check during each type of operation. We also explain what are the essential steps which happen in each operation with a rough timing of what is done when and how.

By explaining them what is going to be done, time to time they would prepare to receive inspectors and auditors (which can either be goods in some situation or bad in other situations).

# Accept to sign a confidentiality agreement

Sometimes your supplier will be reluctant to get a factory auditor or a quality inspector to come as they worry some confidential information may be disclosed. Those information can be other customer name, special manufacturing process which give a competitive advantage to the manufacturer versus the competition. It is totally legitimate for a company to have the willingness to protect their data and competitive advantages. As a client you have to be able to understand this, but there is a way to establish this trust regarding disclosure of information that the manufacture may judge as sensible:

First let know your customer you fully understand it You can for example say (and this is what I say to them usually) : « I understand that you have sensible information, data and other process you would like to protect and I fully respect this. We have also been in this situation with our own customers in the past and this is the reason why I fully understand it. Yet, please understand that on our side we come for a precise goal related to our project/order and we have an internal process inside our company  to move forward working with suppliers and vendors and I have no power to change it. »

Second, propose them to sign a confidentiality agreement; This is legal documentation which states the rules of what can be done and what can not be done.

Third propose them to establish what you can access and what you can not so that they will feel a bit more confident of being in control of what you can see and what you can not (their confidential information)

In a recent audit operation I lead, the supplier (a major player in the eyewear industry which owner where not from China but from another country) had some very specific technics to process with eye wear product. They had a special machine which they didn’t want to show to the competitor etc… I remember the contact with them was not very easy at the beginning because they were very suspicious. It took me several weeks to convince them to let me get in. To do so I had to let them know that I was completely aware that they may have special processes to manufacture their products and that I fully understood the confidentiality matter. I propose them several time to sign a Confidentiality agreement and I had to tell them they could decide where I could go in their factory and where I could not go. They finally accepted.

# Use the pretext of a final client requiring an inspection to be done to make payment

If despite all of those arguments your supplier still doesn’t want to let you audit or inspect him then you can use the argument of having a client who require you to inspect the supply chain to better control it. Nowadays, big retailers are concerned about supply chain management and particularly social corporate responsibility. This sometimes can be a reason to provoke a factory audit. Even if the inspector would rather focus on the quality management system of the supplier, you can still claim that the audit would also have a quick look to social responsibility. 

You can also tell your supplier that your own customer require a pre shipment inspection report to be done to be able to release final payment. This something quite often being done when an importer use a letter of credit to pay a supplier or a trading company. You can explain to your vendor that without inspection report the bank would not release the fund and you would not be able to pay them.

# Use ethical inspector who will not ask money to supplier

One pain that some vendor sometimes also face are unethical inspector and auditor. As you know unfortunately in Asia some people abuse their job position to take money under the table. Some inspectors ask for money from manufacturers to declare some goods as passed or to give good grade to supplier during factory audit.. Those problems particularly appear in big inspection companies which have low control on their ressources. Another reason is that most of time big inspection companies deal with big clients, and those big clients usually place big orders so the stake of the auditor saying a supplier is reliable or not is of high importance so the auditor have more power to ask for money to the supplier (otherwise the supplier may miss a big client). We have a very strong code of ethic which we have implemented to avoid this kind of bad practices

When I was auditing, I don’t count how many times I heard supplier asking me if I wanted money. They were always amazed when I say « no, I just want to make my work with objectivity, whatever your audit result is good or not, this is all what it is, I can not be influenced by anything neither money, or gift or any other traditional delicacies… ». When you send an inspector doing his work properly and not just coming a few hours to get an envelope of cash, then your supplier have a much higher respect for the inspector who come to visit them. 

Another point I noticed when I was inspector is that suppliers were time to time amazed that the quality inspector made a real work and not just making work all the workers of the factory on behalf of me. Of course, when you have 40 cartons of 15kgs to move from a warehouse with no aircon (when temperature is above 30°C) to a QC area to be able to inspect the contents of the cartons, you do it much faster with more arms than only yours but still the inspector. Based on my understanding and based on what some manufacturers tell me, some inspectors don’t help anything the factories and just act as dictator. 

If the supplier don’t want to receive a quality inspector you can tell them you work with reliable and real inspectors who don’t ask for envelope and who inspect really the goods.

# Conclusion

If a supplier refuse a quality inspection or an audit, you have actually several ways to make them accept it depending on how you argue with them. Always play the partner and not the policeman and always reassure them that everything will be fine.

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How often should you audit your supplier and why ?

Factory audit is a common process used to verify a supplier capability and compliance with some working standard, quality management system, ethical labor practice or even health and safety standard.

The topic of this article is when should you audit your suppliers ? Should you audit them once at the beginning then bye bye or should you audit them on a periodic base ?

I will answer to those question point by point.

# Auditing during sourcing phase

Most of importers use supplier audit services to verify their manufacturers capability and to make sure the vendor is genuine (not spam) before placing their first order. Quite often, an importer after having performed some online search on a global trade platform such as Alibaba, Global Sources or Made in China will enter in contact with the vendor and start communicating about a potential order. 

Then, when the times come from discussion with vendor about payment terms and conditions, and especially which amount should be deposited to the vendor account to start the order, the question of the reliability, technical capability, social responsibility, financial health and genuineness of the company start to run into the buyer brain. Indeed, with a deposit amount required usually to be between 30 to 50% of the purchase order, considering mass production big number effect, the deposit amount may not be so small. How to protect this deposit and how to minimize risk related to payment is considered at the time when the payment has to be made. 

The supplier audit service is then the best tool to minimize risk by verifying the background of your vendor: production process, assets such as equipment and machine, employees, organization, management, quality assurance implementation, warehouse storage management, sample management, documentation, versioning, training of new comers, hr management, etc… All of those elements can be verified during a supplier audit before placing an order to a vendor and it helps you to assess the risk of failure to get your order delayed, your products non compliant. In some circumstances, even some financial credit check can be verified to evaluate the financial health of your vendor.

Several audit types can be implemented depending on the need and the area the international buyer want to focus on. Those area can be quality management such as an ISO 9001 audit type, corporate social responsibility with standard such as SA 8000, Sedex / Smeta, WRAP or BSCI, Environmental such as with ISO 14000, health and safety with OHS 18000, or even ISO 27001 to make sure your supplier is capable to manage confidential informations properly. 

For specific industries some specific quality management audit standard may fit better than ISO 9001. For medical, ISO 13485 standard and guidelines will mostly be used, for automotive it will be ISO TS 16949, while for aerospace it would rather be AS 9100. 

Out of those ISO standard, if an importer is willing to sell products to international retailers, then some specific standard to each retailer might be used. So Disney audit, Walmart audit, Costco audit, Nike audit, Target audit are mostly used when you want to sell your products imported from Asia and sold to those big retailers.

# Audit periodically to check the profile of your vendor didn’t change

If you are an experienced buyer frequently purchasing in Asia you will probably know the business manufacturing landscape can change quickly here. Hence, auditing frequently your vendor can be strategically smart in order to be kept updated about your supply chain. 

An  example I had in the past was the case of one manufacturer of consumer electronic I worked with for manufacturing a special type of consumer electronic product:

During the sourcing phase, I audited the manufacturer and noticed they had a SMT line with pick and place machines and reflow oven. At the audit time the machines were in use to solder SMD components on PCB. The manufacturer was capable to internalize the manufacturing process of the PCBA (assembly of components on blank PCB), hence controlling which component was soldered on the PCB and how soldering was done, hence having a decent supply chain control on the electronic part of the process. So, this manufacturer was short listed as a potential candidate and it indeed became one of our supplier.

A year and half later after placing several orders, I decided to audit again this supplier to see how the company was doing now. I was surprised when I audited because I discovered that the SMT line was not in used anymore (while machine were still present at the facility). Machines were off and the level of dust on the machines indicated that the manufacturer didn’t use the SMT line for a while whereas the manufacturer was still assembling parts to become products. In short, they had decided to sub-contract the SMT process to someone one else which they didn’t inspect regularly during product, hence partly loosing control on the supply chain. When I asked why they sub-contracted whereas they had the equipment to process SMT, they told me it was cheaper to process component soldering outside their company. 

A few weeks later I actually discovered the manufacturer sub-contracted because they had decided to wipe off their engineering team to sub-contract the electronic engineering to a design company and that the design company didn’t sell the IP to the manufacturer but just the PCBA where they put their margin on the top of the BOM.

Auditing a bit every year some suppliers which are strategic in your supply chain can be a good idea to verify the evolution of their capability.

# Monitor your Ip with periodic audit

When you are already working with a supplier and placing order to them you may think that everything goes smooth. Yet sometimes it doesn’t and you don’t know it. I got an example of one client who had designed and patented a design for a very special kind of bike. The client appointed a big manufacturer of bike product to mass produce his special bike. Everything was going fine until two years later after placing order when he asked me to go visiting and auditing the supplier, process which he didn’t do before placing order. 

Arriving on site, I conducted my audit like always I due. When I visited the production line, the client products where currently in production on one line. A few hundred meter away of this line, a bit isolated, was another line. I was curious so I went to have a look at what the manufacturer was doing there. I was surprised when I discovered the exact same product was manufactured but under another brand name which was the factory brand name. I quickly reported to the client to know if it was normal his product was manufactured under another name. He was also amazed and told me the manufacturer didn’t let him know about it… 

In short, the manufacturer was producing for the client, but was also producing for the manufacturer brand without paying royalties and infringing patent and licensing from its own client.

If the client would not have asked me to lead an audit at the supplier facility, he would have never known his manufacturing « partner » was becoming his competitor….

# Conclusion

Supplier audit can be very useful to verify your supplier capability, social responsibility, health & safety, environmental responsibility implementation, quality management system and even financial health. On the top of it, it can help you to verify your supplier capability evolution over the time to make sure it doesn’t deteriorate. Finally, auditing your supplier on a regular basis can help you to keep an eye on your supplier to make sure your product is not copied by them.

If your supplier is strategic in your supply chain or in your procurement turn over, then I would recommend you to audit your supplier once a year ideally.

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Quality Inspection in China: Sampling inspection vs 100% quality inspection ?

When considering quality inspection and quality control processes there are generally several way to perform them.

One of the most common opposition is to perform quality inspection by sampling versus performing a 100% inspection. What are the differences, similarities and what are the advantages and drawbacks of each technics.

# Definition

As it names indicate, a 100% quality inspection is the act of checking on a one by one basis each unit of a lot whereas sampling inspection means that a whole lot got a restricted quantity of products being drawn and inspected among this lot to represent the overall quality of the whole lot.

# Sampling

If you have no notion of what quality inspection sampling is, you can just think about it in terms of statistical analysis applied to quality management. This is the same than when for a poll/election is approaching in a country, some survey are made along some people of the population to establish the future outcome of the election.

Most of time, a sample of X persons will be drawn randomly in the population and will be asked what they would vote at the election. Quite often, astonishingly the survey are usually conformed to the reality of the future outcoming result of the election. Drawing those X person among Y people total (the whole population of a country) is called a sampling.

In quality management, and particularly in quality control, this is same when we perform inspection via sampling: we draw X products among a whole lot of Y products, we inspect the quality of those X products and we estimate that those X products represent the whole lot. Hence, if among X products drawn we find out 10% of defectives products  then we consider the whole lot containing Y products will get 10% defectives with a high probability.

So what are advantages and drawbacks of sampling inspection ?

Advantages: The main advantages of sampling is that if your product lot is too large to inspect 100% of the product (mostly due to time and budget reason) then you have a statistic based methodology to assess the quality of the whole lot without really doing it. As most of time quality inspection is billed on man-day unit, the more products to inspect the more man-day needed, hence the more man-day to bill to the client.

Drawbacks: As only X products over Y are inspected, then there is still a part of risks of getting a biased or unreliable assessment of the quality of Y. Indeed, if by mistake the inspector draw products which are good whereas others in the lot are not, then the result of the assessment is not representing enough well the reality.

This may happen in some certain situations where the inspector would draw sample in a not enough randomly well manner: for example, if cartons are stored and piled up in a warehouse in a way that some cartons are difficult to access on the back of the pile, then the inspector may not pick those cartons (normally he should pick cartons in a total random manner in the whole pile of cartons in warehouse).

I remember that when I was inspecting goods myself vendors were not very happy when I was asking them to bring cartons being hidden behind the pile as they had to move all the cartons on the front first. It made them make a lot of effort just to pick a carton on the back which they claimed was the same than the one on the front. Yet, I knew that sometimes some vendors are smart and hide cartons with defective products on the back of the pile in the hope that the inspector will not select them.

  # 100% Quality Inspection

The 100% inspection on the opposite will inspect the Y products contained in the whole lot and will not draw randomly X products. Normally, your vendor should have done a 100% inspection of its production before packing the goods. All factories should usually inspect all manufactured goods before packing them into carton.

Why then doing a 100% inspection after your vendor is supposed to have done it ? Well, believe me or not but sometimes the 100% inspection made by vendors is just inefficient and still some defective are passing through the filter.

I am sure you understand that if your product value is 1 to 2 USD (let’s say a promotional) each and that quantities ordered are high then the sampling methodology is probably more adapted to your case. However if you are buying some products with high added value such as luxury purse, you probably want to make sure your product is just perfect, hence you would inspect 100% of the goods again after your manufacturer did so just to make sure you will not get any problem.

Advantages: When using a 100% inspection, you don’t rely on statistic and you completely eliminate the randomness factor which may bring biased result to your quality control.

Drawbacks: If your lot is large, then you may need several man-days to inspect your goods properly, hence it will cost you more in quality control services.

  # Conclusion

You should choose the quality inspection methodology considering the risk involved when using statistical methodology which leave a space to uncertainty versus the value of your product and the budget you are ready to allocate to quality control process in your procurement flow.

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Product Testing & Certification in China and Asia strategy

If during your manufacturing in China or in Asia you are concerned about your products compliance face to the market where you sell or distribute them, then you might consider performing some product lab testing in China or Asia before shipping them from your manufacturer to your warehouse.

Most of time, your Asian based vendor may propose you to handle the lab testing and product certification process on his side for you. It can be tempting to let your Chinese or Asian supplier to handle the process of lab testing in Asia himself as in appearance it simplify the process for you and free your time up.

Yet, a few tricks are sometimes used by vendors. Those tricks are unknown by most of international buyers and I explain here why it is safer to use a third party inspection company in China  to manage your lab testing instead of letting your vendor to do it.

  # The vendor choose the lab he wants

As you may know, there are plenty of testing labs on the planet who offer testing and certification services. When I say there are plenty, I literally mean there are really everything: you will find big labs, small labs, middle sized lab. Some are specialized in a certain type of goods while other are generalist.

You will find some labs which are accredited with ISO 17025 accreditation, some labs add up ILAC accreditation to their background, some labs are recognized and well trusted by the custom bureau of your country and some are much less trusted or even not recognized at all. Some have expensive product testing fees and some have cheap lab testing fees. All of those parameters are obviously well correlated together.

If your vendor handles the whole process of product certification, then he might choose the lab which is to his advantage (most of time the cheapest lab), and probably not the best lab to your advantage. He may also choose the one where he has relationship so he can get the certification more easily (when not being totally guaranteed to pass it by paying an under the table commission…).

You may get a product being tested and certified by a lab which is not recognized by your custom bureau at all.  If your product passed the test and certification of a lab which is not accredited and recognized properly by your custom bureau, then you might be in trouble because your certification is potentially worthless and just not recognized by your government organization. If your certification is worthless, then your custom bureau can just block your goods to enter in your country and in case of quality issue affecting safety of your customer your insurance may not cover.

Lab accreditation are delivered to labs which comply to a certain standard of compliance to perform lab testing operation (ISO 17025). Labs have to prove they are indeed capable to perform testing in proper manner and with proper methodology (sampling, calibration etc..).

Hence, when performing certification with your vendor, you need to make sure the lab performing the testing and the certification for your product is well accredited and recognized by your market.

Personally, when I perform and handle lab testing management for a client, I exclusively work with accredited lab recognized by custom bureau in the country where my client plan to sell and distribute their products.

  # The supplier send to the lab the sample he wants

When the time comes to perform product lab testing, a set of sample usually need to be sent to the lab so they can perform their testing process on the sample. Obviously the quality of those sample will influence the output of the testing and the certification issuance. If sample sent are in compliance with requirement, then the product get certified. If the sample sent are not compliant with the testing standard requirement, then the testing is failed and the certification is not given, so quality standard of the sample being tested is critical.

Obviously, the sample sent should reflect the reality of your production. If your sample pass the test, your product get certified, but the production doesn't, it can be a problem. Indeed, later if a custom officer decide to test again your product sold (coming from mass production) once at home, the result might be quite different and you may be in trouble.

In the past I had a customer who delegated the testing process to his vendor and got a “PASS” certification for his product based on sample not being issue from the production, but in pre-production phase.

He then gave the “go to mass produce” to his manufacturer and finally shipped the goods to its country. When the goods arrived at destination, a few samples of the cargo were drawn and tested by the custom bureau via a local accredited lab. The custom bureau found the goods were not in a PASS status and were not compliant with the quality standard requested by the market. The importer didn’t understand how it was possible as the product had been tested and certified by the vendor based on the same quality standard.

I investigated a bit and found out that the vendor simply had changed the components/raw materials of the products between the pre-production sample and the actual mass production. Why did they did so? Just to lower the manufacturing cost of the product.

The sample was tested and certified but then the cargo was not at the same standard anymore than the pre-production sample since two different raw materials had been used. The vendor had modified the bill of material between the pre-production sample and the real production.

Should the client would have drawn sample on the mass production instead of letting the manufacturer to send it to the lab, this would not have happened.

  # Conclusion

For this reason I usually recommend to use a neutral hand via a third party inspection company to draw sample from the actual production to send those samples to the lab and not to let the manufacturer to do it himself.

If your production is about to start you can use an Initial Production Inspection to send a quality inspector in China at your manufacturing place to check the quality of the product which the production just get started. In the same time, the quality inspector can pick himself a sample on the line and send it to the testing lab for compliance testing and certification.

This give you possibility to retain your final payment to your supplier in case your manufactured product didn’t pass the test. You can use the same technic with a During Production Inspection or a Pre-Shipment Inspection of course but testing sample at the beginning of the production give you the advantage of being able to stop the production at earlier time in case non compliance of your product is revealed.

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How to prepare a quality control when buying in China and how to minimize quality risks

I get frequently people asking me how they should prepare their quality control operation in China and Asia. I realize quite often that many people who manage import just don't have a lot of background regarding how to make sure their quality inspection would work well.

In this article I indicate a few points of care which can be followed to attempt to optimized your quality control operation.

Here is the list:

# Anticipation vs discovery

Most of importers usually only manage their import and product quality management on a reactive way. Quite often they will place order to their supplier, will wait the order to finish, and send a quality inspector to check the goods via Pre-Shipment Inspection. They then discover quality issue and attempt to fix the problem with their supplier. This is a correction approach and not a preventive one. In the end everybody suffer from the situation as the importer may suffer delivery delay due to product reworking while the asian vendor will suffer from margin decrease due to reworking cost to unpack, fix, and repack their product.

With the time going, when managing order I understood that a preventive approach is much much better and more efficient as it allows to save some hassle, to save time, and to sustain relationship with suppliers. A preventive approach require a more involved accompaniment by the importer to his supplier to help him to avoid problem during and after production. Most of people in the west would think « but why should I make this baby sitting and pampering job to my supplier? He is my supplier he should handle this himself ». Well if in the west it is true, in the far east things can go differently due to cultural reason (the notion of who is responsible for what) but also because commercial relationship are more complicated (if you are a SME and dip into an international commercial context your power to act on your vendor with a legal standpoint is not as obvious as it would be in the west), so you better adopt a position of accompanying your vendor rather than just be a traditional buyer. 

Adopting a preventive and anticipated standpoint versus a corrective and discovery one can save you a lot of hassle.

# Review sample properly and pro actively

An essential point to prepare quality control when you place an order is to review samples. You should never place an order to a manufacturer if you don’t have a sample in hand to review. Indeed, a sample can help a lot to understand what you are buying obviously but it can also give some indication of the type of problem you may face regarding quality purpose. 

I don’t know if you have this experience, but when I requested sample from suppliers in the past, quite often if the supplier accept to give you a sample for free, sometime he send you a bad one (one sample he considers is free because bad). By bad, I mean a defective one: one sample they have produced in the past and which they have on the shelf because they didn’t ship it. 

 When you receive a bad sample there are two way to process: either you just reject this supplier as wrong source simply or you try to understand why he sent you a bad sample and how you can avoid to receive some bad one too. Sometimes, you have no other sources for your product than this supplier and you will have to work with them no matter what: for example if they are the only one on the market to make the product you want, then you have no other option.

# Understanding defects and related manufacturing process

When I receive a sample, the first thing I attempt to do is to understand how the product is manufactured and if possible I try to understand how it was designed initially. Those two considerations help considerably to understand what can go wrong on a mass production in terms of defect generation. This process is quite similar to a DFMEA process: I usually inspect carefully all the materials used and I attempt to understand how the parts are made: which machines are used, which tools are used, how many processes there are, where are the risks related to production, how are set the flow of materials, parts and components between the different step of the manufacturing process. 

If you have experience of having boots on the ground like I have after spending more than 9 years in Asia visiting factories very frequently then this task is not as much complicated as it may seems.I admit this is not an easy task if you don’t have enough experience or background to understanding the technical and industrial process used to make your product however other solutions are existing in this case: you can send an auditor to perform an audit via an ISO 9001 audit type audit at your manufacturer facility so you can have a better understanding of which machine is used, which process are the most risky one etc…

# Listing and classifying all possible defects, their cause and their remedy

When reviewing the sample sent by your vendor after having understood the manufacturing process, you can start listing all the possible defects and problems which may appear during and after the production of your product, and you can start to think about some idea about how to avoid getting defective. Ideally you should use a preventive approach to remove the pain of reworking to your supplier but if you can not implement some preventive action then you should explain some corrective action that can be implemented. 

In the past, I have purchased some plastic products for the european market. I remember that when I received the sample, there were some dirty mark on the plastic. I could have just sent the order and just wait the production to finish but instead I told my supplier even before starting the mass production to get ready to clean the parts with clean water all the just after the extraction of the plastic part from the press when the part is stil hot to avoid those dirty mark to be impossible to remove. I remember that the sample also had some oil mark. I discovered during the audit, that the maintenance of the press was not done properly and that there were some oil leakage from the mechanism of the press to the cavity of the mold. I quickly advised my supplier to clean his plastic injection press before starting the production as it would generate a lot of defects I would reject anyway, he would loose money and I would loose time. 

 If you have any doubt why such defects are appearing on your sample you should obviously ask your vendor why there are such defects, going deep into the why, and find a solution about how to avoid those defects before starting the production. This doesn’t mean defectives will not exist but at least you reduce the chance to get some.

To anticipate all those issues, I advice you have a document (a kind of « augmented » quality control checklist) with defect number, defect description, a picture of the defect type, criticity of the defect, potential cause of this defect, and what can be done to avoid it or to correct it (this is where understanding manufacturing process will help you). You can download a such form here. You can attach this form to your PO and ask your supplier to review it.

# Prepare a testing procedure

If your product is a product with functionalities and not only cosmetic then you should prepare some testing procedure. Think about a mobile phone for example, how many things can go wrong on this kind of items ? Many : Operating system issue, wifi issue, gsm issue, bluetooth issue, screen display issue, charging issue, touch panel issue, speaker issue, app install issues, etc… the list is long and should not be neglected particularly if your product price is high.

If you need a template for this document, you can find one here and you can attach it to your PO when ordering from your supplier.

# Inspect early

All the tips given previously will help you to reduce risk related to quality on your product. Whatever you a DFMEA process or any other process to prepare your import operation the risk still remain and you can not eliminate it 100%. Despite all the preventive actions you may have implemented some corrective actions still might be necessary. In this case I highly recommend you to inspect your production at the beginning of the production via an Initial Production Inspection so you can catch problem early and implement some correction and corrective action for what is remaining of your mass production. Indeed, it is much easier to rework 10% of products already produced and establish a corrective action plan for the remaining 90% of your mass production not produced yet. It will be easier to negotiate a 10% reworking to your supplier than 100%.

  # Conclusion

No matter you trust your supplier or not, you should anticipate and make everything possible to pamper him to limit the risk he get trouble during production. Better prevent than cure..

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Procurement in China: Master Carton Configuration for Logistics purpose

If you are buying some products from China in order to sell them overseas then the question of the logistics and transportation of your goods is an important point to consider. It sounds very unsingnificant but my experience tell me than managing logistics properly is just as much important as managing quality control on mass production.

I give here a few tips related to managing master carton to send your product and to avoid getting bad surprises when receiving your goods overseas.

# Use carton with staples

If you have the choice to choose your carton, you better choose carton which are made in one part. If the carton is assembled, you should better choose a carton which is assembled with glue and consolidated with staple. So that it limit the risk to get your carton opening or torn too easily on its side. Staples consolidate the structure of the carton and when you know how logistic men handle cartons transportation, how they drop them on the floor, you quickly understand that carton reliability is a paramount criteria for successful logistics.

# Use carton with 3 ply wall (or at least 2 ply)

You will find different types of thickness of carton on the market. Some cartons are only 1 ply, some are 2 ply, and some other are 3 ply. The more ply, the thicker the carton, the stronger it is face to logistic men throwing them on the floor. Also, when heavy cartons are pilled up on each other the weight of the full carton tower will play on the carton being located at the bottom of the pile. The structure of the carton may suffer from all this weight and if the number of wall is not enough then your carton structure will be stressed and may fold.

# Write information clearly on carton

If you visit warehouses of logistics companies you will find out that some cartons are marked or written on and some others are not. I highly recommend you to mark your cartons so that if a carton is forgotten or lost during a picking, a transportation or a transfer there is still a chance to find it out again without opening it.  Ideally you should write the shipping marks (company adress, company name), carton number so that it is easier to count them (particularly when many piles are created), barcode if any needed by your warehouse at destination (usefull for Amazon in particularly), top and bottom face, “Fragile” if products are fragile, the size (so it is easy to calculate quickly the number of cubic meter needed in warehouse to store your goods) and the weight (sometimes you can find that some products are missing in carton without opening them just by weighting the carton)

# Seal your carton properly

Most of people seal their carton with tape and this is normal. Make sure the quality of the glue on the tape make the tape not to untape due to excessive heat in container or in truck. I have frequently seen tape ungluing from carton due to the hot weather in Shenzhen.

You can consider that one tape per side may not be enough. Hence, don’t hesitate to add up a second layer of tape on your carton. What we see sometimes is some vendor to completely tape the whole surface of the carton so not only it avoid the carton to break, but it also allow to control that carton has not been opened by someone else during the transportation or at custom.

The best is to use a special tape with special marking on it that can not be reproduced easily so that if the tape has been replaced you know the carton has been opened.

You should try to seal the carton on every opening edge of the carton to make sure the edge will not open during transporation (remember logistic men throw cartons)

# Don’t load cartons with too much weight

The question of the size of the carton is always something you should consider. The bigger the carton, the more products you put inside the less carton you need to buy. The smaller the carton the less products you put inside, the more cartons you need to buy. Yet, you should consider the following:

Smaller cartons are easier to manipulate and easier to move whereas bigger cartons are more difficult to move.

Bigger cartons structure are more fragile and tend to break more easily if they are dropped on the floor.

You should perform drop testing with carton and your product inside before validating the size of your carton.

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Supplier Sourcing in China: How to avoid scams on Alibaba

Frequently people contact me to operate rescue mission related to scamming happening after ordering products on Alibaba. In this blog post I will give a few tips about how to avoid to get scammed on Alibaba or any other B2B platform. Those are small tricks I have developed over the time and which I use to save time when sourcing suppliers in China or in Asia.

# Does the supplier sell a wide range of different products or do they focus on one type of product

If a potential supplier sell many different product from different family, then it is very unlikely that they will be a factory and a serious supplier. In best case scenario, they will be a trading company and in the worst case scenario they will be a scammer. Why ? Well just think about it: most of serious company try to focus on producing one type of product because it is already enough difficult to manufacture properly one type of product so having several type of product on the Alibaba showroom may means that some of them are not produced in house at best or are not produced at all at worst.

Also, you have to know that in China, industries are usually grouped by regions. So, for example, toys are mostly manufactured in Shantou and electronics mostly in Shenzhen, machinery in Shanghai area, appliances in Guangzhou area and in Ningbo and Cixi etc... Some area have specificities.

# Does the supplier ask you to pay on a bank account which the beneficiary name is different that company name.

This is a very big red flag. If a company named "ABC" ask you to pay on a bank account which the beneficiary name is "XYZ" already you should be careful. In some circumstances, they will tell you this their agent capable to receive foreign currency and which will change them to the factory. This particularly happen with companies based in Zhejiang and this is not very good because you sign a contract with "ABC" but you send money to "XYZ" which is not in the contract... In case the company ABC disappear, you have a contract with ABC but this is XYZ who got you money without having a contract with them, so how do you get back your money in this case ?

Second, even worse if the beneficiary name is not a company name it means you may wire money to an individual. Again here, your contract is with a company but you send some money to someone else. This is risky because in case of the people disappearing with the money, you will never find them anymore. Sometimes, they will tell you "we want to receive money on personal bank account to avoid pay taxes". Just run away, those business are not legitimate enough for you to take the risk to loose your money

# Ask to see the business license

Every business in China got a business license. If a company is legally register, they will have this document which you should be able to get and to read to verify they are really existing. On the business license is usually indicated the name of the company , the date of registration, the address, and the nature of the business.  If you buy electronics but the business license indicate textile, then watch out.

Check the registered capital. Is it only 10 000 USD or rather 100 0000 USD....

# Don't wire money via Western union

If a supplier ask you to wire money via Western Union methodology, you better refuse this payment method as you have no control on anything. Once payment is done via Western Union you can not get it back anymore.

Try to use Paypal instead or an escrow payment method. Alibaba got one for some suppliers.

# Ask the supplier to take picture of its company right now

If you are unsure this business is genuine or not, then ask the people you are talking to take pictures of their company right now with themselves on the picture so you can make sure they took the photo now and not two weeks ago. To date the time you can ask them to take a news paper in back ground or something similar so you can make sure they take the picture now.

# Don't get confident because they are in gold supplier status

The reality is that to get gold supplier from Alibaba you just need to pay. To get gold supplier, Alibaba doesn't even visit your company.

# Verify they have a landline phone number

Most of reliable company got a landline in their office. A landline phone number in China start like this +86 XXX where XXX is usually the code related to the city. In Shenzhen the code is 755, in Shanghai 021, etc... make a small search online what is the code of the city where the supplier is supposed to be then verify the code match this pattern.

# Verify they have a website but don't get blind about it

Today, it is very easy to get a website being setup in few hours so having a website is not a guarantee. In the same time, in China many small factories or local oriented one don't have a website at all and use Alibaba as website. Yet some sign can help to increase probably that your contact is a potential reliable supplier:

When the website was opened :verify the whois using whois.net to check when the domain name was registered. If not long time then watch out

Is there any company adress on it, if not then watch out

Is there phone number on it, if not then watch out (chinese company almost always put their phone number)

Does the website is already appearing in several results in Google or not

# Perform a quick supplier evaluation or audit to verify they are really registered

If your order is substantial, once you have already removed a part of the doubt by narrowing down the field, it is recommended to make a quick visit to your potential supplier by performing a supplier assessment. Your supplier may be small or big doesn't matter, what is important is they are existing and stable.

I hope those few advices can help you.

Anything else I forgot, feel free to comment.

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How to choose a chinese supplier: Which question I usually ask to them

When sourcing a new chinese supplier, apart performing a factory audit to verify their production capability, there are a few questions you should ask either during formal or informal meeting. In this article I will explain which question I usually ask to them and why I ask them.

Sometimes I ask those question to learn about the people themselves. It is always interesting to hear about people story who created business.

About the owner

Who is he/she ? This allow me to know who I should talk to if I have a very serious problem.

How many owner own this company ? If there are several it means that a concencus may be needed between the different owners to take a decision in case any being necessary.

What is his background ? If he is only a sales, I am not very confident about it because when problem rise everything will turn about money mostly only. Also for technical discussion this is not very good

What did he do before launching his company ? If his previous job is related to the current industry it means his experience will be greater than if he just started

Which province is he from ? It is sad to say but over the years I have noticed that some provinces habit are better than other. It is the same than if you say that people in New York are more money oriented that in the Kansas. In China, I found out that some province people have better attitude toward business than in other. I know it may sounds weird but when sometimes I hear the owner is from X or Y province or city, I instantly know which position to adopt. I also know if the negotiation will be hard or not

About the people who is in charge of my order

What is their background and what did they study ? If I hear an engineering background I feel much better than if I hear they only have english speaking or studies background because I know then that she/he will only be a translator but when it will comes to discuss about technical issue as it mostly happen in design, engineering and manufacturing the communication will be difficult. I may use some technical words in english and she/he will not understand it becaue the vocabulary will be too limited.

How long this people have been employed in the company ? If less than 1-2 years and working in another industry before, it doesn't make me very confident because she/he will not know well about the industry.

Who else could back up my sales contact if the sales contact is not available?

About the workforce

How are they paid ? Per pieces or per hour ? If they are are paid per piece we may think they are incentived to work faster to make more money. When you work faster you are also pushed to make more mistake so payment per hour of work is better on a buyer view point

Are they difficult to manage? If yes why ? If they are and the reason is they leave the company go and come back, it potentially mean they are not happy to work there, hence they are more prompt to make bad work.

Is there a high turnover ? Who is the worker which has been staying at the company the longest and how long ? This give you an idea of if the people like to stay in the company or not. It may depict if they are well treated and if they like the work they do.

About their other customers

Who are they ? Big, small, from which country ? This give a pretty good idea of how you can position yourself as a client to this company and may allow you to activate leverage or not.

About the company itself

How long it has been existing. If long this mean the business is relatively stable. If only 1 or 2 years becarefull because it means they may not have a lot of experience and you might be their beta tester...which may mean you will go trough the first issues

What are the last machine or investment they have made recently and how long it takes to cover the cost of those investment? If they have acquired an expensive machine it means they have to cover the potential loan they took to purchase it, hence they have more pressure hence your price might be not very competitive (not always but sometimes)

Does the company is private owned or public owned (it happens sometimes for very big factories they are public owned). If they are public owned it means they willbe supported by the government so they potentially have a bit a more flexibility on pricing

About manufacturing manager

How do they train workers ? This is very interesting to understand if they have a standard methodology to train workers and employees or not because it give a rough understanding of their organization

How do they manage workers doing some mistake ? Do they sanction or do they train ? I prefer a factory who train rather than sanction

I am sure there are many other things which can be asked but those questions are most of the one I usually ask. I will update this post if I find other to add.

Is there anything I forgot ?

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Product Development with Factory, Supplier & Manufacturer in China

Seeing so many suppliers selling a wide array of diversified products on Alibab might tempt you to develop new products with those suppliers.

Most of time factories propose their own products on the shelves, but they also propose to make your product by developping them for you.

It can be tempting to develop your products directly with a chinese factory or manufacturer thinking : " this manufacturer already produce a product similar to mine so they will be able to make my product too".  Well the reality is sometimes a bit different.

In this blog article we will explain why.

# There are mostly two types of design and manufacturing profile companies in China

Type 1: The manufacturer is integrated vertically

This type of manufacturer got production line and engineer in house. Becarefull when we say engineer, we mean a real engineer. Not the kind of engineer who is capable to open a CAD file and make it turn in every direction without understanding anything. We are talking about an engineer capable to modify a CAD file quickly based on request, capable to perform necessary simulation and optimization on the part. For electronic engineer, this is the same: he needs to be capable to modify the design, generate simulation and above all he needs to be able to explain you why and how he make this modification.

Advantages:

They have capability to be vertically integrated, hence to operate change and modification on your design directly, quickly and internally (without your idea, IP and design to go out somewhere else, so in this case your NDA will be usefull to protect you). They know the cost to change or modify something very quickly and this is a very advantage when you need to discuss pricing because everything go fast and smooth.

Drawbacks : None

Type 2: The manufacturer doing only assembly and sub-contracting the design and engineering

This type of manufacturer will sub-contract the design because they don't have the ressources internally to perform design and engineering. Still they will claim to do the design and engineering themselves to comfort you.

Advantages: None

Drawbacks:

Your communication is going to be complicated because you will never be in direct with the engineer who manage your project. Your project IP will go somewhere you can not control. Somewhere where your idea will potentially be shared to other manufacturer. Now, imagine you are in a meeting you need ot discuss pricing and to optimize it. You may need to decide to drop some functions on your PCB or change design on a plastic part. If the designer is not internally to the come company then you will hear many times "wait I need to call the engineer (aka the sub contractor)". Not only the process will be slow but the more you will ask about this, the more they will be pissed off answering.

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How quality engineering on manufactured product in China can help with Root Cause Analysis and solution establishment

Some people have different approach of quality management issue as I explained it in this post here.

I remember a client telling me : "We have tried to solve this problem by contracting with a big inspection company who sent an inspector to solve our quality issue. We got a report from him telling that to solve the problem the supplier has to train better the worker on the line". When I got appointed by the same client, I went on site and find out the problem was not coming from the manufacturing process but from design. The engineering had been sub-contracted to a company who didn't perform design and engineering enough well.

I am time to time servicing some importers who face the following problematic "I receive defective products constantly on my Asian production, my supplier tell me he will improve, but I keep receiving defective goods in a random manner. I am tired of constantly performing Defectives Product Sorting on each shipment I do, it cost me a lot of money and still the problem remains unsolved".

There are some buyers who understand that quality issue can damage their brand image very heavily and reduce their sales drastically. This is particularly true today when information is circulating very quickly and transparently on the Internet. A few bad reviews on Amazon or any other blogs, and your sales may be affected.

Buyers and importers who understand this point are most of time willing to invest time and money to make sure quality issue on their products doesn't happen again anymore. They want those problems to be solved on the long term. It particularly means, they want their manufacturing process to be reliable, repeatable and under control. They want to eradicate risk of defective by any mean. They want problem to be identified, root cause analyzed, patch solution to those cause to be provided and deployed efficiently so they can sleep better not fearing to receive again and again complaints and claims from customers in a random manner the same way they don't know when thunder will shock them.

For those customers who want to implement a corrective and preventive approach related to quality issue by performing root cause analysis of their quality problem, a quality engineer having an experience with manufacturing, engineering and design background can be appointed.

What I usually propose them is to act like a good doctor curing a patient:

Identify what is the real cause of the problem is by observing and analyzing.

Supply a medicine acting as the solution or the patch to make those problems not happening ANYMORE EVER !

Make a quick follow up to make sure the patient (the supplier) is cured.

The goal here is not just to check if there are problem or not like what most of inspection companies do, but to really find out what generate those quality problems and to fix them once for all and for the long term.

Quite often, those missions are articulated in a way where a deep work has to be done in cooperation with suppliers themselves. It may happen that some suppliers are reluctant to get a third party to assist them to solve related quality related. There are several reasons for it:

They may estimate they can solve those problems themselves and it hurt their ego to have someone coming to help them to solve an issue they should be able to solve by themselves

They don't want we discover they actually don't perform the engineering or part of the manufacturing themselves (to perform root cause analysis a clear transparency along all the supply chain is needed: sometimes I need to analyze material specs sheet, electrical schematics, PCB layout, procurement source, plastic press parameters etc...so if no transparency is possible, it would create some complications to understand the cause of related problems)

In any case, the consultant has to be able to use a minimum of diplomacy to make sure the supplier don't get his ego to be hurt and is willing to open and to be transparent. For this, I have my own techniques which works 99% of the time: show them how they can benefit from this help we bring to them.

To be able to identify properly the causes which generate defectives, it is absolutely necessary to have a very broad and wide view and understanding of the supply, design, manufacturing and logistics chain. Quality issue causes may comes from either one of this phase or from several of them, in some case they may even interact one on the other. Analytics, skills, methodology and cultural knowledge is the key to success on this kind of mission.

A good understanding of technical and engineering standpoint, manufacturing process, local cultural mindset allow to identify root cause, and to propose solutions to solve and patch those root causes. A good common sense is also very important. Regarding methodology and problem approach, a Lean Manufacturing and a Six Sigma approach will help to identify root cause by deploying 5 Whys methodology, Fish Bone Diagram, 7 Basic Quality Tools.

There is a long list of root cause which are usually listed as Man, Machine, Method, Environment, Material, Management. It is good to consider them in a general aspect, yet here is a short list (non exhaustive) of what I see and where most root causes related to quality on physical goods manufacturing may appear in China:

DESIGN & CONCEPTION ISSUES

Wrong material choice for parts (e.g not capable to handle temperature, stress etc...)

Wrong choice of mechanical assembly or wrong placement in a design (e.g tolerances ignorance...)

Wrong understanding of certifications constraints (e.g misinterpreting a standard requirement involving wrong design...)

Wrong choice in system architecture (e.g not allowing maintenance...)

Not enough simulations performed to test reliability of systems

PROCUREMENT ISSUES

Cost killing by swapping material or component to save cost (e.g sometimes the real cause is that the sub supplier has to pay an envelope to the buyer of the assembler to get the deal, hence its margin his reduce so he has to substitute material in order to still stay afloat on his order)

Lack of control on the supply chain to verify what sub suppliers make on their production (e.g lack of curiosity to understand how the sub supplier perform its own quality assurance process..)

MANUFACTURING ISSUES

Wrong assembly process (e.g assembly not being made in the proper order generating defects...)

Lack or wrong of training on the workers (e.g no standardized process for training + high turn over making that workers are not trained...)

Lack of common sense or organization (e.g no fixture used to make a process to be repeatable and reliable...)

Lack of documentation or improperly used (e.g documentation unreadable, not visible on site, ...)

Lack of process control (e.g no procedure being implemented to control a critical process, no qc checklist, no performance record)

Lack of maintenance on equipments

LOGISTIC ISSUES

Packaging issue (e.g packaging design is not adapted to transportation constraints)

Loading issue (e.g container improperly loaded generating defects)

This is a very short and partial list, but it covers a wide range of problems generating root cause quality issue.

Have you experienced any quality issue which you didn't success to solve or which constantly come back on your productions? If yes, please share them, I am curious.

This article was written by Christopher Oliva, Msc Electrical Engineering & Ms Business Administration, ISO 9001 Lead Auditor, Certified Quality Engineer (CQE) and Six Sigma Green Belet living between France and China (Shenzhen) since 2008 involved in product development and manafacturing of hardware products.

Christopher act as a consultant for a quality inspection company and a product development & supply chain management company. He regularly shares his experience of product development, manufacturing and procurement in China on his blog : http://quality-manufacturing.org

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How to manage with Quality Control in China

When most importers purchase in China or in Asia, since they are mostly constrained by payment terms to pay before shipment of their goods, either they decide to perform quality inspection of their goods before shipment or either not controlling anything at all. It is up to them to decide which risks they like to take. In my case, I always perform at minimum a Pre-Shipment Inspection before any shipment.

If they decide to perform quality control  before shipment, they can turn to a quality inspection company locally based to send an inspector which will verify product quality. In this case, when the inspector is on site and notice some defectives, he will report them via a quality inspection report. Most of time, the quality control report will indicate what defects are found and in which proportion.

Then the client (importer or buyer) will have to manage himself the next step process to manage this issue. So far I have seen several possibilities to manage them from a buyer / importer perspective

The client accepting defect let the cargo to ship with defectives. He will simply take in consideration that unavoidably there will always be some defectives in each production around 2-4 %. He consider that his margin will integrate those cost of non quality. Some people will also ship with those type of defective rate if they estimate that delivery time is more important that product quality (this is particularly frequent on gift and promotional items).

The client who ask his supplier to reopen all the products from their packaging and to reinspect the goods and replace defctive ones. Believe me or not, but this operation is very painfull for a supplier because suddenly all workmanship cost will just triple. For this reason most of suppliers are extremly reluctant to do so. So, quite often what they do, they tell to their client "OK we will reinspect everything" but in 95% of the time they just don't do it. They will just wait a new inspection is coming to validate the goods and will prey and hope this time the inspector say it is OK.

The client who decide to perform a Defect Sorting on his cargo which just  got inspected via a Pre-Shipment Inspection. In this case, the Defect Sorting process will filter defective products to keep only the good one. It means that he takes an active post production approach to solve his quality problem. In short, next time he will order at this supplier, there is high chance that similar problems happen again.

The client who decide to take a Root Cause Analysis and preventive approach. This one is usually a client who understand that root cause should be fixed to avoid unnecessary issue and unnecessary filtering on each single order he makes.

Manage quality issue on a production can be dealt in several way depending on the term (long term, short term, middle term). It is up to the client to decide the way he wans to go with it.

What is your experience with managing quality control in China ?