Have you struggled with product quality but been reluctant to invest in pre-shipment inspection? Have you been inspecting orders before shipping but not been getting the results you wanted? How do some importers seem to have success with third-party inspection, while others fail to see the same return on investment?
There are a number of reasons why you may not be getting the results you want with inspection:
- Inspection might be revealing issues too late in the production process to be corrected.
- Your third-party inspector may be using different specifications to verify the quality of your product.
- Or the factory may not be correcting any defects found during inspection.
The good news is there are a set of actionable steps you can follow to find success with third-party inspection.
1. Clearly state expectations and product requirements
One of the most common mistakes importers make is waiting longer than they should to tell the supplier exactly what they want.
For example, you might neglect to tell your supplier you require an imported Swiss movement in the watches you’re importing. By the time you notify the supplier, the factory has already ordered locally-sourced movements. In a more serious case, the factory may have finished production and packaged the goods by the time you tell them you require a certain component.
Purchase orders and purchasing agreements
Clearly stating your expectations and product requirements should be one of the very first things you do when beginning to work with a supplier. This should happen long BEFORE inspection and even before issuing the purchase order. But expectations like product specifications are still important elements to include in an effective purchase order."Clearly stating your expectations should be one of the first things you do when working with a supplier."
Even better, if you can have your supplier sign a purchasing agreement before placing the order, you can address your need for third-party inspection, shipping deadline and any penalties you might levy in the event requirements aren’t met. When it comes to stating expectations, the more specific you can be the better.
Holding the supplier accountable
Coming to an agreement with your supplier before handing over a deposit for an order is crucial to avoiding many of the frustrations common in manufacturing. It helps to hold your supplier accountable if you can point to contracts or other documentation later in the process where requirements were explicitly stated.
But a discussion about accountability wouldn’t be complete without mentioning that holding your supplier legally accountable may prove difficult. Written agreements in some countries, China in particular, should be considered guides more than a legally binding contract for most importers. Depending on where you’re manufacturing and the value of the order, pursuing legal action against a supplier may be more trouble than it’s worth.
It’s recommended that you hire a local attorney to draft a contract in the local language if there’s a chance you’ll want to take a supplier to court for breach of your agreement.
2. Conduct product inspection
On the surface this second step may appear to be a no-brainer. Success with third-party inspection requires hiring a third-party to visit the factory and inspect the goods. But there are a few factors that you, the importer, will want to consider when arranging product inspection.
When will inspection take place?
For most products, inspection can happen at any one of many production stages. And there are advantages to inspecting later as well as earlier in the process. For example, if you’re manufacturing upholstered banquet chairs, you may want to have inspection done prior to the upholstering stage to check for areas like dimensions, structural integrity, epoxy binding and others."For most products, inspection can happen at any one of many production stages."
On the other hand, if you’re manufacturing acrylic sinks, you may be more concerned about checking the finished goods and opt for inspection just before packaging. You can always inspect at multiple stages or re-inspect later if you find issues during an initial inspection. Of course, your decision of when to inspect will often be affected by your budget.
What’s your budget for inspection?
It’s true that the scope of inspection will be somewhat limited by how much of your budget you’re willing and able to allocate. Still, there are a number of ways you can modify inspection to fit your budget.
For example, one way that importers can cut inspection costs is by merging similar items and inspecting them together. Another way to lower costs is to decrease the sample size chosen for inspection. And by hiring an inspector locally, importers can cut down on travel costs incurred getting to and from the factory (related: 5 Ways the Smartest Importers Cut Inspection Costs).
A smaller budget shouldn’t exclude you from having success with third-party inspection.
What’s your tolerance for quality defects?
Tolerance for quality defects is one aspect of product inspection that many importers seem to disregard–at least initially. How many quality defects would you consider acceptable in an order of finished goods? When you start to think about it, you’ll probably conclude that the number of allowable defects will depend on the order size. And you’d be right.
Thankfully, the quality control industry has developed a standard used to determine the number of pieces to inspect in a random sample of products called acceptable quality limits (AQL). Along with each sample size, AQL gives you options for the maximum number of “critical”, “major” and “minor” defects to allow in that sample size (related: 3 Types of Quality Defects in Different Products).
You still have a choice of AQL options for inspection, but your third-party inspector might use their own suggested levels unless otherwise instructed. If you find the first inspection to be too strict or too lenient, you can ask the inspector to adjust the AQL so it aligns more with your own tolerance for defects.
3. Address issues with your supplier
It’s not easy to see success with third-party inspection when you have unrealistic expectations about it. One of the many misconceptions about QC is that it’s the responsibility of the third-party inspector to make sure that any defective pieces found during product inspection are replaced or reworked.
The reality is product inspection is a tool used to identify and report on any quality defects, other product issues and the status of an order. That’s it."Product inspection is a tool used to identify and report on any quality defects."
Product inspection typically does NOT:
- Pinpoint the exact processes involved or causes of particular defects
- Provide corrective/preventative actions or other remedies for quality issues found, or
- Force the factory to rework defective product or ship the goods on time
If an inspection report reveals an unacceptable number of defective pieces, you’ll want to communicate this with your supplier. Ask them to rework or replace the defective goods. Some factories will correct issues without your prodding, while others will ignore any issues that you don’t raise directly."Some factories will correct issues themselves, while others will ignore issues you don’t raise."
Discussing how defects will be fixed
You may also want to discuss how the factory plans to fix the problem. For example, if the defects reported are mostly due to flash, an issue related to injection molding, the factory may need to trim the excess material by hand (related: Top 5 Injection Molding Defects to Avoid). And this additional handling of the goods might introduce new defects. So you’ll want to consider the method when pushing for rework.
Charging the supplier for substandard goods
If the factory doesn’t appear to be reworking defective goods, you may want to consider charging the supplier for the goods shipped that you can’t sell. Some defective product should be expected in every order, but only in acceptable numbers, which AQL takes into account.
Your ability to force the supplier to pay for defective product will depend on factors such as your relationship with that supplier and the value of your PO. A supplier that doesn’t especially value your business relationship probably won’t be moved by your threat of charging them for shipping substandard product.
4. Re-inspect to verify rework
This last step is important if you want added assurance that issues found earlier during inspection have been resolved. It may not be necessary if an earlier inspection revealed a passing result.
Aside from having up-to-date criteria, auditors are usually provided with a copy of the most recent report to act as a guide in checking the product. During re-inspection, they’ll pull an entirely new sample of pieces at random for inspection. Re-inspection will give you insight into any corrective actions the factory has taken to help you be sure the order is ready to ship.
Third-party inspection is not a “cure-all” solution or a “silver bullet” as some importers might be mistakenly led to believe. But if used correctly, it can be a powerful tool for shedding light on the status and quality of the goods you’re importing abroad.
So follow these steps for success with third-party inspection, and you’re sure to make the most of the transparency that an extra set of eyes provides. Take care and stay on top of your quality control!
And if you'd prefer to listen to this topic instead, check out the manufacturing podcast episode that covers it!