The number one most important thing to consider when sourcing products from China is quality. If there are issues with quality from the outset, the potential of the business surviving and reaching profitability is exceptionally slim.
Quality starts with the product stability as the products come from the manufacturer. Quality determination starts with supplier quality management.
Purpose of the quality management capabilities.
We perform these checks for one particular reason – to make sure that you, the customer, are satisfied when your products arrive at your door. Supplier quality requirement checks can be done on a schedule or without prior notification and are an absolute must. These checks ensure the manufacturer is continually producing the stable, high quality product the buyer insists on having.
Quality management vs. Incoming Quality Control
It is a common misunderstanding for those outside of the product sourcing chain to find these two as similar. The Incoming Quality Control, IQC, is done after the products are delivered to the location specified by the buyer. It is here that the buyer can conduct the IQC and make one of two choices thereafter: 1. Special procurement; 2. Product return.
Regardless of the choice made, both the buyer and manufacturer lose out on potential profits earned.
Fundamental issues with IQC
It is important to note that the IQC is not the best way to ensure product quality. The lag time between the completion of the order and subsequent arrival of the products at your doorstep means there is a no win outcome for you, Sourcing Nova or the manufacturer. Here are the issues you will incur:
- Freight in the case of a return
- Waste in the case of throwing product away
- Selling at a discount may hurt future sales
A specific scenario
To better understand the IQC, here is a potential situation.
Your order is for 2,000 products. Sourcing Nova has shipped without issue, and the products have arrived at your specific location also without issue.
200 of your products are defective in some way. What are your options at this point? You have three:
- Accept the products
- Return the products
- Special procurement implementation
What is special procurement
You will note that there is an option – special procurement. Special procurement means you have accepted the defective products because there is no issue with function and appearance. Instead there is a small imperfection that makes the product sub-par.
Here is how special procurement works for you.
Let’s return to the 200 defective products from your original order and pay a price below cost for them. You decide these products have some value for your customers. You choose to sell these products at 1/3 of the retail price. Your customer, who is very keen on saving money, gets a hefty discount on your products.
Ensuring quality control
Quality control starts at the outset. It should be comprehensive, detailed and thorough. In fact, there are eight ways to evaluate quality from the outset.
The buyer’s specific quality standard requirements
Your purchasing agent assigned to you by the team at Sourcing Nova will need a complete and detailed explanation of your specific supplier quality standards and metrics for a full audit. This is our standard operating procedure any time we are starting fresh with a new client and customer. The quality standards you provide to the purchasing agent make communication with the manufacturer more efficient, resulting in a better product all around.
The most common errors
The biggest mistakes made by customers new to the Chinese product sourcing experience is one that we have covered previously – a focus on the big three. These being price, MOQ and delivery date and at the expense of what is important – the quality standards of the products.
We at Sourcing Nova strongly recommend that you submit your list of purchasing standards at the same time as your initial purchase order. Your personalized purchasing agent will use that information to find the most appropriate manufacturer for your products. This way you and the supplier will be in full agreement on the quality requirements of the product order from the outset.
Perfect quality control management system
Customers who are established and familiar with product sourcing and looking to expand their product lines often want to be sure the new supplier has quality standard certifications like the ISO9000. It is important to remember this is a single assessment of the manufacturer done at a certain point previously.
Proper supplier quality control assurance comes from audits of daily production runs and from many different metrics. When a purchasing agent reviews a manufacturer, it is vital to check the complete system. This will include:
- Quality certification standards like ISO9000, ISO14001, BSCI and SA8000;
- TQM, Total Quality Management, implementation if necessary;
- If statistical management and control methods are needed;
- If the products have quality standard certifications already.
Product quality certification
This means that a manufacturer has product quality certification qualifications. Specifically, these include relevant product standards, requirements, prescribed procedures and regular inspections of the products made.
Any production looking for certification should pass the issuing certification standards and earn the requisite marks demonstrating the product meets the requirements according to the established standards of the products.
It is common to send products to a testing location you as the buyer designate. Testing content is largely determined by the target market. Additionally, most products must meet U.S. and E.U. quality standards as part of the overall inspection.
Product quality certification vs. corporate quality system certification
There are three differences between the two.
- The certification is not the company’s internal quality control system but a product made;
- The certification is based on product standards and not management standards;
- The certification does not prove the quality system meets management standards;
- The certification proves the products meet specific product standards.
The purpose of the certification process is not to determine if the manufacturer’s quality system meets standards but the products created meet the product standards.
Purpose behind implementation
The customer is the reason for the entire manufacturing process. To that end, it is the implicit purpose of the product quality certification system to issue appropriate certification marks for the customer’s identification.
Additionally, the process also improves market reputation of the product buyer, their company and products, makes the product market more competitive in a healthy way, encourages continual quality management and improvement.
Third party certification
The best way to ensure absolute product quality is through a third party, independent certification body. This is standard for most Chinese manufacturers and represents the majority of the manufacturers Sourcing Nova’s purchasing agents. New manufacturers are vetted based on their current certifications and adherence to manufacturing standards. This way, the products you order will enter the international markets with ease. This will in turn also improve China’s standing within the international manufacturing industry, foreign economies and trade.
It would be ideal if reaching quality standard certification were a difficult and involved process that only the dedicated manufacturers would take the time and effort to earn. However, bureaucracy and corruption on many levels mean some unscrupulous companies pay bribes for certain certifications like the ISO9000. This way the manufacturer can claim implementation of TQM, but it is easier said than done.
Sourcing Nova’s purchasing agents always make an on site visit to new manufacturers, communicate directly with the factory quality control team, check the quality control procedures and policies with intensive scrutiny. This way the buyer’s products and interests are protected from the outset for the best possible product for their customer base.
Professional quality control resources
Proper quality control management means having the support and resources necessary to ensure the job is done correctly for the product safety and customer satisfaction. This means a combination of the following:
The purchasing agent will certainly take all of these factors into consideration, but as part of the initial check, the agent will look for the following:
- Trained personnel
- In house inspection and testing methods
- In house testing and inspection of raw materials
- An established testing environment with appropriate controls
Generally, the only available employees of the manufacturer a buyer can make contact with on a regular basis are the sales and customer service departments. The quality control team does not have direct interaction with the buyer nor are they fluent in English. The customer service and sales team can touch base with the quality control team, but there is no vested interest in the products or a comprehensive understanding of the quality management control system and processes.
Sourcing Nova’s purchasing agents always visit the quality control department when on-site for inspections of any sort. The agents also communicate directly with the quality control team, observe the processes and equipment for the in-house testing. Lastly, the purchasing agent ensures the testing environment is used regularly, has routine maintenance and appropriate controls.
Any time there is a combination of systems and resources, correct implementation is absolute for the success of quality management capabilities. For this, the purchasing agent will review the quality records – the systems used when evaluating manufacturers on site.
It is rare for anyone outside of the individual, their company and the manufacturer to be privy to this particular step in the evaluation process.
It is common for the employee to use something akin to cryptography – abbreviations, aliases and terms – that only the employee and the parent company understand. This information is often recorded on paper, and the specific handwriting of the individual is often difficult to read as well.
It is the exceptionally large scale manufacturer who will use a paperless record system for information management.
Sourcing Nova cannot dictate set of expectations for the quality records department of the manufacturer. Instead, we have vetted manufacturers who use consistent, easy to read and understand record keeping for the quality management services. Granted, there are some manufacturers wherein this is not as simple as we would like, but some records are preferable to none.
It is always wise for you, the buyer to request samples of your products. This serves several purposes. It gives you a chance to see the manufacturer’s product sample capabilities, demonstrate production capacity and ensure the manufacturer can produce the requested products using the parameters of the buyer.
This particular inspection requires a human’s senses – see, smell, hear and touch. We at Sourcing Nova strongly recommend buyers do their own inspections as an initial inspection before hiring a third-party inspection service or asking the purchasing agent to perform the inspection. This particular inspection is subjective, and only the buyer can make the absolute determination of the product quality.
It is after the buyer makes this particular subjective inspection, it is time for an objective inspection. However, if there is anything about the sample that the buyer does not like, continuing to an objective inspection is not necessary.
Samples do require considerable more in-depth analysis. This includes testing that can only be done in a specific setting. Testing such as R&D, hazardous substance and intellectual property ensures the sample can meet the evaluation criteria.
The U.S. and the majority of the E.U. have strict requirements of quality evaluation. For certain products such as any product in contact with food or baby products, it is vital neither of these products have harmful compounds and heavy metals. It is difficult, if not impossible, to recognize these via standard human senses. It requires the use of a professional laboratory with precision testing equipment to create analysis reports to make these specific determinations.
Mass trial production
The samples are only the beginning of the quality inspection process. The buyer next will move to batches – small, medium or large – based on the production needs. This way a true analysis of the overall product batch can be checked for quality and production capabilities of the manufacturer
Sourcing Nova can, on request, arrange for a third-party inspection service for a pre-shipment inspection at various stages of product production.
Incoming quality inspection (IQC)
Now that the first seven steps are in place, implemented or ready for implementation, it is time for the incoming quality inspection, IQC, necessary for equity compliance. If the manufacturer’s quality is stable and satisfactory to the buyer, considerations for inspection exemption are feasible.
Each batch of product from the manufacturer allows for the buyer to make a final assessment on the quality of the product from the initial inspection and little more. As a rule, the quality management capabilities are indicators such as:
- Quality qualification rate
- Average qualification rate
- Batch rejection rate
- Incoming inspection-free rate
Sourcing Nova will discuss each of these in detail as follows.
Qualified rate of quality
Based on random inspections, the qualified rate of the products can be determined with a simple mathematical formula.
Take the total number of products to be produced in the factory (N) and the total number of products passing inspection (M). The formula for calculating the qualified rate of quality is
- M/N(100 percent).
Accordingly, the higher qualified rate of quality, the more qualified products.
Average qualification rate
The average quality of each batch will be different, and the judgment of the quality ability from the supplier relies on the average pass rate. In other words, the average of the quality pass rate over multiple deliveries.
For example: A manufacturer ships products three times a quarter (three months) with a qualification rate of 95 percent, 90 percent and 85 percent respectively. The formula is simple:
- (95+90+85)/3 = 90 percent.
As before, the higher the index, the more qualified products produced in different batches. If the difference is smaller, the quality is also considerably more stable.
Batch return rate
This is the ratio of returned batch to the purchase batch. For example: A manufacturer delivers 100 batches throughout a single year and six batches return. The formula is:
- 6/100 (100 percent) = Six percent
The higher the batch rejection rate, the more substandard the product batch.
Incoming inspection exemption rate
Incoming inspection exemption rate refers to the ratio of the number of incoming products exempted from inspection in relation to the total products from the manufacturer. Long term cooperation between buyers and manufacturers can, as a way to improve sourcing efficiency and lower inspection costs, sign an inspection exemption agreement. This agreement shows the manufacturer recognition of their production capabilities. Higher incoming inspection exemption rates translate into evidence of the manufacturer’s quality capability.
The incoming inspection is a lagging quality control method. It is only effective if properly combined with other metrics, tests and inspections in order to be effective. This method cannot stand independently.
Sourcing Nova has solid relationships with many manufacturers of various products and over the years have evaluated their quality to ensure absolute consistency for each and every product. If there is a product you would like to source, do contact us. Our purchasing agents will be happy to work with you on finding an appropriate manufacturer.