Imagine handing over a deposit of $5,000, $10,000 or $100,000 dollars to a factory in Asia for an order of high-end jewelry. Then when you receive the goods you find the supplier used inferior materials. And now you’re stuck with a substandard product that you can’t sell to your customers.
Few problems are more frustrating to importers than those that affect product quality. And when it comes to preventing scenarios like the one above, some importers opt to hire a full-time product inspector to check the quality and status of orders before they ship. There are some distinct pros and cons of having full-time staff based near the factory in which you’re manufacturing.
And whether you already use a third-party or personally visit the factory yourself to inspect, it’s worth being familiar with this full-time option. So let’s look more closely at why some importers choose to hire full-time staff and others don’t to see if this is a viable product QC solution for you.
Why some importers hire a full-time product inspector
A full-time product inspector is typically a salaried employee in the country where your supplier’s factory is located. Depending on where you’re manufacturing and how frequently, you may have one dedicated individual visiting one factory or multiple factories. You might also maintain multiple full-time staff to handle a greater volume of inspections. These full-time staff are paid an annual salary.
Advantages of hiring full-time inspection staff
There are some real advantages of hiring full-time staff to handle your product QC at the factory, such as:
- Importers can realize some cost savings and greater convenience by not having to personally travel to their supplier’s factory each time they need to inspect an order.
- Some importers find full-time inspection staff easier to manage than alternatives, such as third-party or factory QC staff, because these inspectors report directly to the importer.
- Since full-time inspectors are typically hired locally, they’re usually native speakers of the local language, which can mean easier communication between the importer, inspector and supplier.
- Importers often receive more consistent reporting when using full-time staff because the same people will generally inspect at the same factories each time.
These advantages can vary depending on the importer and their unique situation. For example, you may find that a full-time inspector is easier to communicate with but more difficult to manage than alternative methods of product inspection. But these are the most common motivators for importers hiring full-time staff for inspection.
Why other importers forgo hiring full-time inspection staff
For many importers, the above advantages are great reasons to hire full-time staff to handle inspections. Larger importers, in particular—those with annual revenue of $10 million or more—find it less costly to hire full-time staff stationed near factories where routine inspection is needed. But other importers find that hiring full-time staff is not the best option for them, due to several reasons:
It’s true that larger importers may save money by maintaining full-time staff abroad. But many importers actually spend more money paying a salary to full-time staff, than they would using other inspection methods.
An excerpt from a 2015 annual report from Kelly Services shows that quality managers in China earned a salary of between $35,000 and $60,000. An importer would also be paying for travel expenses to and from the factory, such as transportation, food and accommodation. These costs along with salary could make the full-time-staff method of product inspection very expensive.
Unlike full-time inspection staff, third-party inspectors are typically hired on an as-needed basis. Rather than paying a salary to these inspectors, importers generally pay a third-party inspection company to send inspectors when and where they’re needed. These importers are only billed for the time and expenses accrued during the service.
Third-party inspection companies also tend to have a wide network of inspectors based throughout China, Asia or worldwide. So travel expenses tend to be much lower than, say, hiring a full-time inspector to travel between different factories.
Legal challenges with maintaining full-time staff
Some importers choose not to hire full-time inspection staff because of local legal challenges. Hiring full-time staff often means establishing some kind of legal entity, such as a rep office. And in some countries, like China, this can be fairly difficult. Finding an agent to assist you can be costly as well.
Some countries have more complicated employment laws. For example, hiring and firing employees in China can be difficult. As Attorney Grace Yang points out in China Law Blog, firing employees must be based on “statutory grounds”, and employers must pay severance to terminated employees. This additional “red tape” can make hiring full-time staff a less attractive QC option.
Integrity risks are present in almost every manufacturing scenario, including product inspection, logistics and other aspects of supply chain management. Corruption can be as straightforward as bribery. But it usually takes more subtle forms, especially during product inspection.
Factory owners or managers might offer lunch or dinner to an inspector, for instance. Or they might offer to have a private car pick the inspector up from a train station, rather than having them take a bus to the factory. Seemingly innocent gestures like these can affect the inspector’s judgement when it’s time to issue a report. That’s why it’s important for inspectors to refuse these kinds of gratuities and remain impartial.
The need for rotating inspectors
Why does it matter if the inspector is working full-time for an importer? Inspectors employed full-time by an importer often visit the same factory regularly. The problem with this is that routine visits to the factory create opportunities for the inspector to become too familiar with factory workers and management. As an inspector spends more time working with the same people, they’re more likely to become friends, which can influence the accuracy of reporting.
The best way to prevent this is typically to rotate inspectors regularly so that no inspector is going to the same factory too frequently. This is more easily done by a third-party inspection company that employs many inspectors in a given service area. Unless you’re a larger importer with frequent inspections at different factories in a concentrated area, it won’t be very cost-effective to hire additional full-time staff just so you can rotate them.
Frustrations with communication
Ease of communication was listed above among the advantages some importers find when hiring full-time inspectors. But depending on the inspector, communication can just as easily become a source of frustration. Consider the following information importers typically need to provide for product inspection:
- The PO or packing list showing breakdown of item quantities
- Product requirements, such as CAD drawings and other specifications
- Any QC checklist or criteria for checking the goods
- Any known quality issues and how to report them
- The sample size for inspection
- Any approved product samples for use during inspection
- The factory address or inspection site location
How problematic could it be if the inspector misinterpreted one or more essential details?
Inspection could be conducted on the wrong items at the factory. Dimensions could be measured incorrectly. Quality issues could be underreported. The list goes on. Just because an inspector is a native speaker of the local language and has a decent grasp of English doesn’t mean communication will be smooth.
That’s one of the reasons that some third-party inspection companies employ foreign staff to work between importers and inspectors. Since they’re able to speak both English and the local language, they can clearly communicate instructions to the inspector. Many importers also feel more comfortable dealing directly with someone who’s familiar with their own culture, which further helps prevent misunderstandings.
Inspection is a key part of product quality control. Many importers find that it lowers their costs, while improving the overall quality of their product. But each importer is different. Not all methods of product inspection are ideal for everyone.
As we’ve seen, hiring a full-time product inspector can be a relatively efficient and low-cost solution for some. But for others, maintaining full-time inspection staff can be problematic and more expensive than the alternatives. Whatever your options are, they don’t have to be mutually exclusive. For example, you may find that some combination of full-time and third-party inspectors is best for you.
The bottom line: weigh your options against your unique situation. No product inspection method is a one-size-fits-all solution.
What’s been your experience working with full-time inspection staff? Let us know in the comments below!