By Renaud Anjoran

Importers often find themselves in an uncomfortable situation. They are legally and financially responsible for what they let their suppliers ship. But their tight margins often cannot support audits of each factory and quality inspections at every stage of every production run. So, what should they do? Of course, quality control is usually a necessity for importers. But the fastest way to decrease sourcing risks lies in a better organization, on the importer’s side. In this article I am sharing 7 tips that can immediately be adopted by buyers for their Chinese procurement, at no extra cost.

1. Product specifications sheet

Most importers don’t take the pain to define their expectations. The factory starts developing prototypes based on a sketchy description or a sample; some changes are made along the way, but there is no master document listing all the requirements. Clearly listing all the specifications of the product, and then keeping this list up to date, is not complex—it only demands some organization. (See this excellent article about QC checklists for more details.) By doing so for every product you buy in China, you will enjoy the following benefits:

• Communication will be greatly improved, thereby avoiding many quality problems.
• Your supplier will be less tempted to cut corners on what he knows you expect.
• Less ambiguity means your supplier has less occasions to raise prices.
• You can easily send an inspector: your specifications become his QC checklist.
• This specs sheet can be an integral part of a contract (remember, P/Os are not contracts).

2. A quality assurance system in your organization

If you develop new designs of the same type of product season after season, quality issues tend to be recurrent. This is good news: it means they can be prevented. At the end of the day, the importer—not the Chinese supplier—is the one responsible for taking appropriate steps to ensure product quality. Here are a few of these steps:

• Before selecting a Chinese supplier: ask yourself “Have I already had problems in the past with this vendor, and should I go on taking risks with him?” or “Have I done all I could to reduce risks for this production?”
• When you are preparing the specs sheet: ask yourself “Is it possible to make in large quantities at my quality standards?” and “Is the factory aware of my country’s safety standards?”
• When you are in the prototype development phase: ask yourself “Is this made with the exact materials, equipment and operators as will be used in bulk production?”
• Before the goods get on the line: ask yourself “Will my products be manufactured in the workshop I approved?” and “Have the technicians on the factory floor understood my requirements?”
• Before the products are shipped out: ask yourself “Am I reasonably certain that these goods are conform to my expectations and to my country’s regulations?”

For each of these steps, if you have doubts you should communicate with your Chinese supplier. If you still have doubts, send a third party in the factory for confirmation. Each importer can adapt and expand this list of questions. For each order, make sure you record which individual/service is responsible for which questions, and what decisions are made.

3. More effective visits to factories in China

Do you regularly visit factories when you come to China? In my experience, importers spend too much time drinking tea and listening to the story they are told, and not enough directing the visit. The general presentation of the factory should not take more than 30min. Then it’s up to you to gather facts and make up your mind. Make sure you are respectful of your hosts at all times, though.

I see many purchasers going to factories, but too few technicians. As a consequence, factory assessments are often quite ineffective. One should focus on three aspects:

• The overall capacity of the factory, in terms of output quantity per month. If you calculate that your order will take all their capacity for 3 months, you know that they will subcontract in cheaper workshop(s). By the way, uncontrolled subcontracting is quite common in China and can have disastrous consequences.
• The quality system. You want to respond to questions such as: does the factory control incoming materials, in-process items and finished goods? What do they do when they find issues? Can we see the corresponding records? Before development, how do they identify the projects that cannot be made up to specs? Etc.
• The capacity of the factory to manufacture YOUR products at YOUR quality level. Some factories are hungry for business and they won’t refuse your orders, even when they should. For example, a problem I often find with garments is that some factories are adequately organized for producing for a certain market, but the workers don’t have the ability to switch to a more demanding workmanship.

4. Supplier qualification

If you tend to place large orders, suppliers will go to certain lengths to win your business. They might drive you around and invite you to expensive restaurants, or even fly someone to your country for meetings. There is a much better way to use all this money. You can require that your suppliers pay for an audit of their factory! Depending on the results, they might become an approved supplier… or they might have to make improvements. It is important that you choose the auditor carefully. A very experienced professional can tailor his checklist to your needs, and he should offer reasonable fees if he gets to audit all the factories working for you. In complement to these factory audits, you might consider asking for regular confirmations that the goods are all made in the qualified factory. It only takes a quick check from a third party.

5. Regular reporting

Your Chinese suppliers are working on your products with your money, so you certainly have a right to know what happens. If you work with a trading company or a sourcing agent in China, make sure they do their job: you can ask for regular reporting. This is another benefit of preparing your product specifications sheet: you can ask your supplier to follow it as a checklist. This way, he sends you comments and photos to illustrate his findings for each specification. Of course, your supplier might not be totally honest. If he admits quality issues, he knows you might ask for a discount or even cancel the order. But regular reporting will probably push your supplier’s salespeople—to whom you have explained your requirements—to discuss with the factory’s technicians, or even to look at the products themselves. Once again, better communication helps reduce quality issues.

6. Process improvement

What can you do if you have strong reasons to believe that a factory is going to produce substandard quality? For example, you have received the result of a pilot run, the samples have serious issues, but your vendor assures you that “it should be fine in bulk production”? Once again, you can require that your Chinese supplier pays for a process improvement service. A professional will examine the processes, identify the critical points, and give his advice on how to proceed. A follow-up inspection, to check whether this advice is put in practice, is also an option. It is strongly advised to tie this type of third-party validation to your payments. For example, a passed audit report from a designated company can be required prior to releasing a portion of the payment.

7. Production samples

Most importers ask their suppliers to send a few samples taken among the first finished products. It is a convenient way to check that all is understood, particularly if you couldn’t see any final prototype respecting all your specs. However, buyers should not over rely on this solution, since it presents some downsides:

• If mass production takes 2 weeks, your supplier sends samples after 3 days (as finished products might not appear instantly), and you give a response after 5 days, most of the work has already been done by the time the Chinese factory gets your comments.
• Some factories in China send “golden samples” that are made specifically for this occasion. It is quite common in certain industries. So you might want to send someone to pick them up at random.
• For heavy items such as furniture, the cost of sending the production samples would be quite high. You can also have a sample sent to a local laboratory, or send an inspector to the Chinese factory at the beginning of production.

To sum up

Keeping quality under control is not necessarily expensive. Your company’s organization and the choice of your Chinese suppliers have the greatest influence over the quality of your products. Third-party quality control (consisting mostly of factory audits, product inspections and lab tests) has a role to play, but it should only be used for confirming that quality is acceptable.

Renaud Anjoran writes advice for importers on the Quality Inspections blog. He is the founder of Sofeast Quality Control and helps importers to improve and secure their product quality in China.