Quality Control & Design Security

While China QC is no longer an oxymoron, there is still a lot of “hand holding” required to ensure suppliers fully understand your specs and have the ability to maintain quality. Only through physical inspection of the facilities and review of actual production samples will you gain a true understanding of your supplier’s ability. If you are unable to make the trip yourself, there are independent agents like PassageMaker that can assist with this qualification and analysis process.

• Always see an actual production sample from the actual supplier. It may sound simple, but you would be surprised at the number of so-called suppliers who actual trading companies that farm things out to sub-suppliers with out full disclosure to the buyer. This creates an additional level of margins. More importantly, should a problem in quality arise, the lines of communication are complicated by middlemen.
• Ask the supplier to provide their internal QC documentation. For example, stipulating that the supplier’s testing and inspection data accompany the shipment will let them know you are serious about quality.
• Employ local Quality Assurance inspectors and independent laboratories. Not realizing that companies like PassageMaker provide independent inspection services at affordable rates (USD 450 per day), some buyers wait until the goods arrive at the destination to perform an inspection. Even if your payment terms are structured to limited you financial exposure in that final payment is made after inspection, should you run into a QC issue after the goods have arrived at the destination, you still have the headaches associated with missed delivery dates, negotiations of corrective action, and costs of scraping or returning the goods to China. It is always a good idea to inspect the goods before they leave China.

Almost every buyer is concerned with how to ensure blueprints, design specs, tooling and brand names are protected during the quotation and production phases. Here are some tips from the team at PassageMaker who deal with copycat avoidance on a daily basis:

• Do not disclose the product’s final use and remove confidential information from prints and samples.
• Consider dividing your product into individual components to conceal “the big picture” during the request for quotation stage and perhaps for production.
• If possible, do not disclose the buyer’s identity. Let the supplier quote based on the product and order size, not based on how much money they think may be in your pockets.
• Sign a letter of confidentiality. However, even with such a document, confirmation of wrongdoing and enforcement is difficult. Therefore you should own the tooling out right. Any funny business and tooling is extracted from vendor.
• Even if you have no plans to sell your products in the PRC, you should consider registering your trademarks and designs in China. Having done this, the court system is on your side should you face infringement by a supplier. Luckily, registration is inexpensive and straightforward. Costs are under 2000USD in most cases.

Mike Bellamy has been based full-time in Asia for the past decade. Fed up with the inability of middlemen/trading companies to control quality and tired of having intellectual property (IP) knocked off, he decided to do something about it by forming PassageMaker in 2002. Mike developed a system to extract the best pricing in China and protect IP without compromising quality and service. PassageMaker's 100 percent US owned and operated assembly center in South China serves as the client's "black box" where inspection, final assembly and branding takes place behind closed doors. In this fashion, Intellectual Property is physically secured and full quality inspection is conducted before product leaves China. Mike has structured sourcing investments in over 150 production classifications for US and European clients during his time in China. He has an International MBA from the University of South Carolina, which included course work in Harbin and Beijing.

Recognized as expert on China sourcing, Mike is has been a featured presenter for Global Sources China Sourcing Fairs in Hong Kong and Dubai, Boat Tech China, Rotary Foundation, the US Chamber of Commerce, British Chamber of Commerce and State Bar of California among others. A former Rotary Foundation Ambassadorial Scholar, Mike speaks Chinese and Japanese. Based full time in Shenzhen, China.

Learn more about Mike and PassageMaker at www.PSSchina.com.

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Comment(s) :	[quote=Andrew Reich]One thing not to forget is the importance of running a china supplier verification before you buy. This is a full background and credit check on the factory or trading company and will basically ensure a smooth sourcing process.[/quote]
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