I know many of my peers have taken up considerable white space on this topic but.......it's super important.
So today I'd like to add my own slant on verifying Chinese suppliers and how factory inspection services can be a key element for you when buying remotely with only the internet as your virtual sherpa. There are some really simple things you can do to keep lowering risk.
Buyers have different approaches to verifying Chinese suppliers and there are multiple boxes that need ticking before we start making the big calls on who to deal with. For beginners sourcing from China this is a bit harder again given a lack of practical experience. If you signed up and studied the lessons in "Sourcing from China: A course for beginners" text then I am hopeful you learned some good stuff that will stand to you. However it's that valuable practice that you need or the experience of knowing how to complete the final pieces of the puzzle that’s seriously important. Why so serious you ask? Well ultimately it will come down to a point where you are ready to pass over some of your hard earned cash on a deposit to..... Well a company you don't really know, people you have never actually met! It doesn't really matter if it's sourcing suppliers in China or the Arctic Circle you are going to have the same last minute feelings of doubt.
Let's stop for a second!
Firstly don’t forget there are independent factory inspection and audit service providers in China. Here is a common sense hot tip that can save you some time. Once you have engaged speaking with a supplier that is on your shortlist of 3-5 factories tell them you would like to send over your factory inspection team just to have a look at their production line, processes and quality control. Obviously be polite and ask if that’s ok? A positive response from the supplier embracing the chance to show off their ability is a thumbs up but a washy, nervy excuse ridden response is a red flag. Doing this can save tons of time communicating only to get to a similar crossroads. There is nothing rude about it but do be prepared to back up what you are saying. It is understandable that you won’t follow through on all but don’t use it plainly as a question that you never back up. At some point you'll drop the ball.
So hot tips aside, when you engage an independent factory inspection service what benefits can you hope to gain?
- Verification that the factory exists and is operational.
- A non-biased view of the factory and its operations.
- Evidence of production capabilities including machinery being fit to manufacture your product.
- A snapshot of what it’s like dealing with management from factory X/Y.
- Information on what products are being produced at a particular time.
- How products are checked, packed, handled and stored.
- A complete report with images, factory record copies and interview results with factory management.
It’s easy to get all too caught up in small details of discussing specifications even colors or packaging details and for whatever reason we ignore the elephant in the room…..the product we are discussing actually needs to be produced. So let’s not get too side tracked when verifying Chinese suppliers, be sure to tick all the boxes. Follow this comprehensive & handy checklist where you can actually tick all the boxes in choosing the right supplier in China.
John O' Grady has been living and working in Shanghai, China since 2004. In all of that time John has worked in sourcing and supply chain management. Currently he is General Manager of Found China, a provider of China Sourcing Services. John enjoys travelling to factories throughout China to find new suppliers, make deals, oversee QC and stay in touch with good friends. Keep up to date with John and Found on their No. 1 China Procurement blog.