Normally, all suppliers are supposed to perform internal quality control. And this is how they are supposed to guarantee to their client that product they ship should be without defects. If all suppliers in Asia would indeed perform internal quality control on their production, then why third party quality inspection companies are still existing and prospering ?
Here are a few reasons why the most experienced importers still inspect with third party quality control companies despite their manufacturer telling them they have internal quality control procedure already established:
1. /Supplier opinion on his own work can not be unbiased
This is the eternal topic of being judge and witness in the same time. Someone who make a work and judge himself the quality of its work can not be objective on his opinion. Rare are people who say they don’t do a good job.
If you are a manufacturer, you care about margin more than anything else. Thinking about it, what can cost margin to a manufacturer ? One certain criteria which affect margin on an order is waste rate generated during production.
Now, try to be in the shoes of a manufacturer: if you produce 20 000 pieces of a 3 USD product and you sell them at 5 USD, then each pieces you scrap because being defective cost you 3 USD of scrap + 2 USD of margin you loose. Imagine you have 5% defect and you need to scrap them. You loose 0.05 * 20 000 * (3+2) = 5000 USD . This is not a very small amount.
So, as manufacturer you might be tempted to reduce this waste to minimize this loss. How can you reduce this waste? By reducing the selectivity of your defective segregation by considering that your product is ok (not perfect but still ok)
Advantage of using a third party inspection company to inspect your goods make that the opinion is fully neutral, unbiased and objective. Because the third party inspection company is not involved in the commercial transaction, it will not take unbiased position about quality of product. It would just tell you the truth.
2./ Do they really know what quality means for you
In terms of expectations regarding quality standard, there are sometimes huge gaps between countries and cultures.
For example, although both asians, Japanese are like German, they are extremly quality oriented and focused when it comes to buy products. Their quality standard and its related expectation is constantly very high. On the other side, in China, quality is not always the priority, they mostly focus on the price tag. For them, quality standard might be not as high as for Japanese, European or American people. In both case there is a gap between what quality means and its related importance. For example, a cell phone which the software crash every days might be acceptable in China but might simply be unacceptable in developped countries.
This is all about managing expectations and establishing a treshold of what is acceptable and what is not.
When considering your supplier, always ask yourself if you are on the same “wavelength”. If this problem would not happen, third party quality inspection companies would not exist and would not have so much work to do in China and Asia.
3./ They may try to comfort or convince you with a cheesy speech
Asian suppliers when not very confident about the quality of their product, may try to dissuade their buyer to get controlled by a third party inspection by telling them: ” We have already internal quality control, no need to waste money on third parties qc”.
They do so, so that they can pass defective more easily trough shipment. The naive buyer will listen but quite often will get surprised when receiving goods discovering they have been fooled by their cheesy supplier speech. Unfortunately, it is often too late and the cost to correct mistake on quality cost much more when being performed on the western side of the planet than on the eastern side.
Most of the experienced importers (and we work with some leader in the retails) are implementing third party quality control in China and Asia whatever the speech of their supplier. They understand the necessity to prevent problems and they usually prefer to invest a bit on quality risk management rather than pay for expensive correction later on.
4./ They don’t always implement quality control as what they say
What is the level of quality control that your manufacturer is implementing. Do you really know it ? How is it really between what they tell you they do and what they really do ? Do they accept 10% defect, 5% defect or anything else?
If you query an asian supplier, and particularly in China, they will always tell you their defective rate is less than 1%. It sounds well to the ears, but inspecting everyday, we can tell you that defective rate are in 90% of the case much higher than 1% (based on the data collected via the inspections we are performing, average is around 8-12% defective rate). So, many suppliers are just too much optimistic about what they do and what they say but in reality because they don’t even have record, they don’t really know what they are talking about.
Don’t get trickked by an over optimistic speech. Very often, importers who believe blindly what their suppliers tell them is how the main catastrophic situations are happening. It has been proven that it is always better to prevent than cure.
5./ You can not control turn over of people and their related training
Internal quality control is performed by people internally to the manufacturing company. Those people are normally trained to recognize defectives and to segregate them. Turn over of employee is actually quite high in Asia, hence training and processes in place to train new people is very important to avoid quality fluctuations.
If there is not a solid repeatable training made to new comers, then the new comers might be not as well sensibilized to what is important to check on your product than the previous workers who was doing quality control the first time you placed order and briefed your supplier. Replacement of ressources without having a solid training bringing constant repeatibility and maintaining segregation of defectives and quality standard is the number 1 cause of fluctuating level of quality.
The typical situation is when a relationship start with a supplier and the buyer will try to set his expectation to the mannufacturer who will train a worker A to inspect and qc the product properly. At the chinese new year time, worker A is leaving the factory for another one and worker B is replacing worker A on quality control task. If the supplier doesn’t have proper documentation in place and proper established training, then you have easily 90% chance that worker B will not know what is considered as a defective product. This is when defectives product are passed, packed and shipped to buyers.
The importers not being aware of the situation and confident that he has previoulsy pointed to his supplier what was important to check on quality, will finally receive defectives good without understanding why. He has just lowered his guard whereas he should have kept it high.
6./ They may swap components on the next order to increase their margin
Quite often, quality problems don’t come on the first order but on the second, third or fourth. Why ?
Well, if you are supplier and you have spent a substantial time to acquire a new customer, you are going to make the maximum on the first order to convince your client that you are fully capable to handle his order. On the first order you will be very carefull so your buyer can trust you.
In some situation there are some suppliers who are ready to make no margin on first order to acquire a client by proposing a very low price. The buyers attracted by a good deal will place order without understanding the supplier strategy: once the first or second orders have been placed and that everything looks to be fine, the buyers lower his guard and don’t control the quality as highly as on the first order.
Now, the manufacturer need to make margin. To do so, he will replace or swap some materials in the bill of material by cheaper one so that they can increase their margin while not letting know the buyer. This is when the most catastrophic situations happen: the buyer didn’t imagine a single second that his supplier could have swaped some materials or components by cheaper one without noticing him; making the product now unreliable and with a different quality standard.
Always keep the guard high with your supplier and your production. Don’t listen too much about cheesy speech and convincing argument. Keep control on quality by yourself because once damage is dong then to receover it will cost you more than preventing it.