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How do I make sure the quality of goods received is according to contract?

by Mike Bellamy in 'China Sourcing Information Center'

The most important step is to make sure your supplier can actually achieve your desired level of quality in the first place.

Only through physical inspection of the factories and a 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 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 that are actually trading companies farming out production to partner factories without 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 QA inspectors and independent laboratories. Not realizing that companies provide independent inspection services at affordable rates, some buyers wait until the goods arrive at the destination to perform an inspection.

Even if your payment terms are structured to limit your 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.

The steps to making sure the quality of goods received is according to contract are follows:

1. Most important, but often overlooked by new buyers, is to make sure your contact or purchase order given to the factory states the specifications clearly and is fully understood by the factory.

2. Confirm that the factory is using these specifications for their internal QC.

3. The checklist for the independent inspector should match up with the specifications found in the original contract/purchase order.

Read more about how to set up an effective contract or PO.

Answer written by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.

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