by Fredrik Grönkvist
Most manufacturers in China, and other developing Asian countries, are unable to ensure compliance with overseas product safety standards and substance regulations. As such, a supplier’s ‘compliance track record’ (i.e., previously issued certificate and test reports, held by the supplier) is a key signal when selecting a manufacturing partner.
However, in many industries, very few suppliers can provide said documentation, therefore leaving foreign buyers with little information to judge a supplier’s technical capability and expertise. In other industries, the number of suppliers with extensive compliance track records is larger – but still requiring buyers to apply comprehensive testing strategies. In this article, we explain how you can assess manufacturer capabilities and manage compliance strategies in four different industries; Apparel & Textiles, Watches & Jewelry, Electronics and Toys & Children’s Products.
Importers generally only deal with the apparel manufacturer, on the surface of the supply chain. The apparel manufacturer in turn purchases fabrics and components (i.e., buttons and zippers) from subcontractors. Nothing unusual here. However, most apparel manufacturers are unable to produce any compliance documents whatsoever. Our conclusion is that most test reports are held by buyers, and fabrics suppliers. That said, don’t expect the apparel manufacturer to share information about either their subcontractors, or customers. As a result, the buyer is, as usual, left guessing. The truth is, that many (especially small) apparel manufacturers don’t know if their fabrics suppliers are able to provide compliant produce.
There are of course exceptions, but most apparel manufacturers are unwilling, or unable, to present more than a few test reports. Even in a ‘best case’ scenario, buyers shall not expect that the supplier is able to provide test reports matching the specific standard to which they must ensure compliance.
To us, any substance test report is of value. An apparel manufacturer’s ability to ensure compliance is entirely dependent on the material subcontractors they normally work with. A supplier that is able to ensure compliance with REACH (EU), is therefore quite likely to be able to ensure compliance with California Prop 65 (US). Hence, buyers must be flexible when making a selection. Still, Apparel and textile buyers must be ready to implement a ‘hands on’ compliance strategy, and never assume that manufacturers can provide test reports for their specific SKUs. Because that simply doesn’t exist.
Watch and Jewelry Manufacturers can, at best, produce a few substance test reports. Most cannot. The dynamics are largely identical to the Apparel and textile industries, and the same substance restrictions apply. Therefore, there is nothing else to add, but the summary below:
The situation in the Electronics industry is, on the other hand, very different. Buyers of electronics products are required to ensure compliance with a variety of safety standards and directives. The supply chain as a whole is also far more sophisticated. All large component suppliers make, albeit not exclusively, RoHS compliant parts – and the assembly manufacturers can normally present a rather extensive list of compliance documents. Hence, buyers in the industry have much more to act on, when selecting a supplier.
Still, buyers shall not expect manufacturers to offer catalogs filled with ‘compliant SKUs’, ready to hit the assembly lines. As always, a compliance track record indicates capability and expertise. This is further explained below:
a. A product certificate / test report is only valid for one or more (listed) SKU/s, not all ODM products in a supplier catalog. Most suppliers can only provide documentation for 5 to 20% of their product catalog.
b. Electronics are normally within the scope of two or more standard / directives. It’s very common that a supplier can present compliance documents for one such standard, while being unable to do so for others. For example, it’s very common to find products, compliant with the EU EMC (Electromagnetic Compatibility) Directive, while lacking compliance documents for RoHS and LVD (Low Voltage Directive).
c. If any components or subsystems are changed, previously issued documents are invalid.
Even when dealing with ‘high end’ manufacturers, buyers therefore find themselves in one of the following situations:
Toys & Children’s Products are, for obvious reasons, strictly regulated in most major markets. American buyers, in all states, must ensure compliance with CPSIA, while EU buyers must ensure that their imported items are EN 71 compliant. These are framework regulations, which scope includes the following:
To ensure CPSIA compliance, American importers are generally required to issue a certificate using their domestic, US, company name – and provide test reports valid for the imported batch. Hence, ‘ready made CPSIA compliant’ products are non-existent, and buyers must look for other signals when selecting a manufacturer.
Regardless of industry, American and European buyers are forced to work ‘hands on’ with compliance and certification procedures. Relying on the supplier to do the work for you is not realistic. There are no shortcuts, and it will take many years, if not decades, before Chinese, and other Asian, manufacturers are able to implement procedures ensuring a more seamless experience for overseas buyers.
Fredrik Grönkvist is the co-founder of ScandinAsian Enterprise in Shanghai. Since 2010, he and his team have helped hundreds of companies worldwide, primarily in the EU and US, to develop and manufacture products in China. He is also the main contributor on www.chinaimportal.com, a leading knowledge base for small- to medium-sized enterprises importing from Asia. For further questions, you can contact him on www.chinaimportal.com/contact-us/.