How to control the quality of YOUR products?

Small and medium-size importers tend to have preconceived ideas about quality control. They tend to think product inspections are supposed to be performed at the end of production, but in many cases it is too late.
They were told they should always check quality with either their own staff or an inspection company, but in some situations it makes no sense. Overseas buyers lack a framework to find the best fit between the type of product they source and the tools they use for production follow up. Renaud Anjoran, from Sofeast Quality Control, distinguishes several situations and walks us through the implications of each one.

First, how can we categorize products sourced in China? Two dimensions are particularly revealing:
- The quality requirements of your market.
- The degree of customization involved during development and production.

Three types of products, along two dimensions:

Low-quality vs. high-quality products

China exports huge volumes to developing countries. These markets often accept products that would be considered unsellable, or even unsafe, in Western Europe or in the US.
Conversely, more and more Chinese goods end up in expensive department stores. Defects are often noticed and result in penalties for the importer.
So, why should we separate low-end products from higher-quality goods? The higher the quality standard, the more efforts should be put in quality control.

Standard vs. customized products

Standard products need very little, if any, adaptation to fit a buyer's requirements. A logo might need to be printed, and the retail packaging might have to be developed by the supplier, but the processes behind the core product are not modified. For example, most computer hardware products fit in this category. They are often called "off-the-shelf products". Items that were already produced and are offered on stock can also be viewed as standard goods.
On the other hand, production processes have to be set up in a specific way for manufacturing certain products. I am thinking of complex apparel products such as brassieres, for example. Most complex industrial goods are also highly customized.
Why is this distinction important? The more a product is customized, the earlier quality should be controlled.

Three types of quality control solutions:

As you can see in the framework above, products are categorized in three groups. Let's study the implications for each type of product.

-1- Products with low quality requirements:

A confirmation of quality before shipment is usually enough. Inspections take place after production is finished and the goods are packed, and sometimes just before loading the cartons in a container.

Competition between suppliers is mostly based on price. Everything else is secondary. What is distributed through certain channels in developing markets (e.g. Africa, South Asia...) is amazing-the colors might not match and the workmanship might be shoddy, it is acceptable as long as "it can be used". So a quick check of the conformity and the quantity of the products is enough. In case minor quality issues are found, the supplier usually proceeds with shipment. Why? Minor defects might not get noticed, but a late delivery definitely will.

The importer does not need to know his suppliers intimately. Buyers can often find and contact many potential vendors and put them in competition. They can conveniently visit trade shows, go to wholesale markets in China, or use online B2B platforms like GlobalSources.com. This website even verifies whether the vendors really exist and have ongoing operations. By doing so, they allow buyers to reduce risks of being scammed by fake suppliers.

Since price is so important, many orders are one-shot and new suppliers are regularly invited to place a bid. Trust between buyer and vendor is relatively low, which is why a dose of quality inspections is necessary. But many buyers cut quality control costs by using a local agent who typically does a quick check on the goods and consolidates cartons from different factories into a few containers.

Cheap standard products (e.g. computer wires) fit into this category. More customized products also do, as long as the quality requirements are low enough. For example, a home textile product requires specific patterns, fabrics, colors, and workmanship... but it can be produced quickly for a low price-without much consideration for durability and esthetics.

-2- Low-to-medium product customization, relatively high quality standard:

We are now talking about the bulk of what is purchased in China and resold in the US and Western Europe-from home appliances to toys and from promotional goods to garden products.

The buyers need to make sure the goods are acceptable on their market. A final random inspection (after production is finished, and just before shipment) will confirm whether the product and its packaging are up to the standard. It is the most frequently-used type of quality inspection.

But importers also have to avoid last-minute surprises. What if the goods are not acceptable? What if they cannot be repaired, and the supplier needs to re-purchase materials and re-produce? If the schedule is tight and/or a deposit has already been wired, sending an inspector after some products have been finished (and ideally also packed) is a good idea. In this case, the importer gets a good estimate of average product quality early in the process. He can ask for corrective actions and check whether they are implemented (fees or re-inspections are usually re-invoiced to the supplier). Some products might be put aside, but most of the order is usually saved.

The components/materials that will be used by the factory can also be checked-before production starts. Some simple tests can be done on-site (e.g. weighing, or inspecting visually), and others should be performed in a laboratory. On a side note, factories are often tempted to buy cheaper materials, and some of them prepare "golden samples". So it is always safer to have several samples drawn randomly by your staff or a third party, and sent to a recognized lab.

The inspection company should be chosen wisely, and they should use an accurate and exhaustive checklist. After the order is shipped, it gets really hard to make claims. If you receive unacceptable products, 99% of suppliers will tell you "we are sorry, but even the inspectors you sent to the factory have not noticed it".
I would also advise not to be overly focused on the category of supplier (manufacturer vs. intermediary). Some buyers pride themselves on "going direct to the factory", but in fact they often end up purchasing from one factory that sub-contracts to another one. Without employees permanently on the ground, a buyer can hardly figure out the real nature of his supply chain. In my mind, for the type of product we are describing, a mature buyer simply compares samples and prices of different vendors-without second thoughts.

An advantage of trading companies is that some of them control quality during production, and accept to settle claims in case poor quality products have to be reworked or thrown away after delivery. But some traders do none of this and disappear when big problems arise. The main reason for booking the services of independent inspection companies is that you cannot count on an intermediary for stopping a shipment of defective products. Their interest is to move it out and get paid. They run high risks if they admit quality issues to a customer: renegotiation of the price, repairing and payment of air freight, or even a cancelled order.

The nature of your supplier might not be important, but you should spend time to know his working methods. If possible, give him regular and predictable orders. It gives you more leverage in case quality issues occur. You should also avoid suppliers that are much larger than your company, simply because they are less likely to give your orders all the attention they deserve-both in terms of product quality and of schedule.

Finally, the higher your quality standard, the more you want to tie quality confirmations to your payments. A good solution is to open a letter of credit that requires a passed inspection certificate from a specific inspection company.

-3- High customization, relatively high quality expectations:

For this type of product, importers need to pay a lot of attention to product design and factory selection. The most important is to find a factory that can produce your goods at your quality standard in a reliable manner. Then you should explain your product's specifications (and if necessary how to run the processes) to the factory representatives, and make sure it can achieved in mass production.

The emphasis here is on helping early in the manufacturing cycle, more than on verifying finished products. You can wait until production is over before controlling quality, but it is highly risky when it comes to first orders. A final inspection should only be a way of confirming good quality and acceptable packaging.

You can fly your technicians to China. It is the fastest way to get started. You should follow their advice for selecting a good factory, rather than focusing only on prices. Once sampling or production is under way, your technicians should spend most of their time on the factory floor. And they should always try to understand the way the factory would do it on their own (they might know better, but it should always be demonstrated through a pilot test).

Another option is to find a third party QC firm, or an engineering firm, specializing in your type of product. They usually offer specialized services or tailored programs that the major QC firms don't want to provide.

When sourcing this type of products, it is clearly better to deal directly with the manufacturer. Why? Because you are teaching them how to reach your standards-you don't want a trading company to break that relationship simply because they decide to use a cheaper factory and make a fatter margin.

An exception is using a procurement/engineering firm that will become your supplier. They will look after all the details for you and be transparent about the factories they use. Make sure their engineers are technically up to the task, because they will be the ones explaining your requirements in the factory.

A final note about payments: the more customized your product, the harder it is to sell it to another buyer. Therefore, suppliers have a strong interest in getting a very high deposit and "locking the buyer in". A letter of credit is also a good option.

Renaud Anjoran is the founder of Sofeast Quality Control and helps importers to improve and secure their product quality in China. He writes advice for importers on the Quality Inspection blog. He lives full time in Shenzhen, China. You can contact him at info@sofeast.com.

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Readers have left 2 comments.

 1. Nice article
Kyo, Unregistered

It's a great article, very interesting.

 Posted 2009-05-09 03:03:55

 2. acct
boat, Unregistered

very good artical about export and import from china

 Posted 2009-11-01 02:28:04

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