by Etienne Charlier
It is probably clear to most now that we strongly recommend on-site supplier evaluation prior to any purchase from a Chinese factory. Whether you do it yourself or use the services of a third party firm, the on-site visit is the only reliable way to fully understand the real capabilities of your potential supplier. Most problems you may face in the future can be perceived and often prevented at that stage.
But going on site is one thing, knowing what to look for is another. I thought it useful to describe the key areas any person visiting a potential China supplier should actively observe and even investigate. Each industry will have it own specifics, but they will all fall in the key areas I list below.
The first question to get an answer to is: “Is this supplier able to make the product I need?“ A good supplier will tell you if they are able to make a product in compliance with your requirements. However, many poor suppliers will bluff they way into your business, hoping to get away with it once you have placed an order.
Of course, this is precisely what you want to screen out.
To be able to make your product, a supplier needs each and all of these:
You know your own industry and you know which equipment and tools are key. You also probably know what type of testing and measurement are required.
Here are some typical examples of how suppliers fail or pass for one of these requirements:
The second question to get an answer to is :”Is the supplier able to make the product I need all the time?” Even when a factory has all the equipment, tools and experience to make a product, there is no guarantee that it will make quality product consistently. Consistent quality requires good and strict processes. Processes to make the right product first time, as well as quality control processes to catch any product that displays a problem, before being shipped.
To be able to make your product consistently, a supplier needs each and all of these:
This is harder to really evaluate. All Chinese supplier will know what you want to hear and they will know what to answer to you when you ask about process.
The only way to get reliable information is to see evidence of the process on the shop floor. For instance:
All these do not have to be high tech. Many smaller suppliers will use paper work and simple filing systems, but they are able to catch problem and trace causes of the problems even if they do not have a fancy ERP system. Here, the spirit and mindset are at least as important as the technology.
The third question to get an answer to is :”Are the supplier and its internal systems mature and solid enough to withstand a small crisis or the loss of a key person?” Many smaller companies are able to provide their customers with decent quality and good service, but this is based on a few experienced people only. For instance:
If point 2 is hard to evaluate, point 3 is even harder. It will be hard to be sure the problem will not arise at seemingly good factories. But it is possible to screen out poor factories where problems will certainly occur.
Finally, what actually should be the first thing to be checked, “Is the supplier a properly registered and certified company?“. This is the easiest thing to verify. You ask a copy of the documents and read them. Points to check include company official title/name (in Chinese), address (should be the same on all documents or there should be a very good reasons for the discrepancy, and validity dates. The minimum list of documents to check is:
Obviously, much more can be done.
But if everyone already covered all the 4 areas above when evaluating Chinese suppliers, most of the horror stories we hear of would go away. All it takes, is one day on site, if you have experienced people to do the work. Probably a little longer if you are starting with this.
You can do it yourselves, for instance by having your company quality or operation manager visit the factory, or you can use companies offering factory evaluation services.
Most of our clients ask us to do the work first and then send someone in China for an intensive final evaluation tour for the short list we kept.