Explanations of Compliance Requirements When Buying in China

Best Quality & Sourcing Articles

Here are some interesting or useful articles that I found recently.

Product Testing and Certification when Buying from China

Fredrik Grönkvist wrote a very good guide for importers who are not familiar with their country’s compliance requirements. This article includes:

  • How to find what testing is applicable
  • What determines the cost of testing
  • What importers must do vs. what is of lower importance

And he wrote three other in-depth articles and CE markingREACH, and California Prop 65.

How to Improve Quality in a Chinese Factory (video on Youtube)

David Collins, a manufacturing veteran, gives a great overview of the tools at the disposal of manufacturers that want to improve their quality level. (Disclosure: I am a partner in David’s company.)

China Product Development Contracts: The Questions We Ask

Dan Harris outlines the questions each importer should clarify before engaging in a new product development with a Chinese supplier. I have helped a lot of importers who didn’t follow such a process and lost large sums. Very helpful!

The Postal Service is losing millions a year to help you buy cheap stuff from China

Sending products one by one, from Chinese factories or from a warehouse in Hong Kong, directly to consumers can be very inexpensive. Particularly for delivering to American consumers, as explained in this article.

What Products are Very Hard to Buy Outside China?

I have talked to importers who can only purchase their products in China, and other buyers who can’t find anything they need in China. How is that possible?

Actually the situation is very different depending on the industry. I tried to provide a rough classification below.

Some product categories are very difficult to purchase outside of China:

  • DIY and power tools
  • Products (toys, sport gear…) integrating electronics
  • Low-cost hard goods, especially in plastics
  • Low-cost molds and industrial tooling

Some product categories can only be purchased in China if the importer needs hundreds of thousands of pieces in a short amount of time

  • Consumer electronics
  • Complex garments (jackets, certain bras…)

Some product categories can only be purchased in China if the importer needs a high mix of products and small production batches at a low price:

  • Any product that relies on a low-automation and high-flexibility process: manual welding, cheap plastic injection molds…

More and more food products from China are exported all over the world at very low prices:

  • Honey
  • Garlic
  • Seafood

Some products are better sourced out of China:

  • Some textile products (e.g. simple garments made in Bangladesh, certain embroideries made in India…)
  • Some products based on specific materials (e.g. gloves out of latex, sourced in Malaysia)
  • Equipment that requires high accuracy and long life cycle (e.g. flow meters for gas/oil, sourced in Japan.

Overall, my feeling is that if we remove textile from the equation, other low-cost Asian countries are positioned on niches “between the elephant’s feet”.

What do you think?

Sourcing Low Power Consumption Displays

With the trend toward more connected devices and the drive to smart watches, small displays that consume little power are becoming critical for more and more applications. When it comes to electronic products, the display is among the 2 or 3 most power hungry components.

Our engineering team wrote this overview of available technologies, to help buyers compare the right types of display.

The first step to identify the most suitable technology is to understand the application requirements in terms of:

  • Display size
  • Resolution – number of dots or pixels
  • Power consumption when display is on
  • Contrast – difference between white and black colors
  • Luminosity – ability to see details under the sun for example
  • Visual angle – does it also look nice from the sides?
  • Graphic or segment: Segment is particularly suitable for simple applications (especially those using icons or pictograms), while Graphic is pixel based and offers unlimited display.

The technologies that can be found on the market can be classified in 4 families:

1. TN: Basic liquid crystal concept with many variants such as HTN, FTN, STN, FSTN… Each variant has an advantage on visual angle, power consumption, color, and resolution. While the visual aspect is poor compared to classic smartphones, they bring great value in term of cost and power consumption. It means they are the perfect choice for low cost applications.

2. TFT LCD (also called active LCD): This is the major technology for mobile phone displays. Its strengths are great colors and high resolution thanks to a transistor matrix (TFT) integrated with liquid crystal. Its major downside is the need for backlight, which increases power consumption.

3. OLED: This is a more recent technology. The advantage of OLED is that each dot can generate its own light, meaning that black dots don’t need power. Its power consumption is much better optimized than with TFT LCD. The unit cost being higher, it is more common on high-end phones. An OLED display can also be fitted on a flexible support, which allows a wider range of applications.

4. EPD (also called electronic paper): This is the most recent solution based on electronic ink. Since it consumes no power on a static page, it is perfect for e-book reading devices. it is based on ink, so the light cannot come from the display. It offers very high visual quality in luminous environments thanks to very high contrast. Like OLED, EPD can also be fitted on a flexible support, but color is still a challenge.

The table below summarizes the main differences between the families of technologies:

Comparison table of display technologies

On top of the criteria listed above, the selection of the right display should also take into account what already exists on the market. Customized versions are costly — they require a mold or tool that might represent up to a 1 Million USD investment.

Finally, most displays come with a driver to adapt its interface to your device. Drivers can be a burden in the selection process. They can have a short lifetime, limited features, or be very costly.

There are hundreds of Chinese suppliers, from the very low to the high end. The information available on the Internet is limited and can lead to a wrong strategic decision – switching to another display supplier after the first prototypes takes a long time and is costly.

Here is the typical information you need to ask potential suppliers:

  • What part of the display are you responsible for? (Many manufacturers only do final assembly.)
  • Is your business growing? If it is stable, what are the reasons?
  • Why are your costs lower than the competition? (Working with a supplier that makes a low margin is only good for the short term.)

3 Types of Factory Evaluations for Purchasing in China

More and more importers discover that they can appoint an auditing agency to evaluate factories before they issue an order. But not all these evaluation services are equally helpful.

I distinguish between 3 broad types of factory evaluations. Each type is suitable for different needs on the importer’s side.

1. Basic Factory Evaluation

The purpose is to collect basic information about the manufacturer, such as:

  • What is the address? What do the buildings look like? How big is it?
  • What type of products are they making? For what brands?
  • How many people work in production? What equipment do they have?
  • Do they check incoming materials/components? What type of in-process QC do they do? What type of final QC do they do?

More and more agencies offer this type of service for less than 300 USD. I think it makes sense for small factories, where the buyer does not expect to find a solid quality system or robust processes — a simple report with many photos conveys sufficient information.

2. More In-Depth Factory Audits

Most factory audits performed in China are based on an international standard. The large testing & inspection agencies encourage this because it looks very objective.

The most common standards for general consumer goods are ISO 9001 (quality management systems) and SA 8000 (social compliance). For example, an ISO 9001 type of audit will be based on a checklist as shown here.

In a perfect world, good manufacturers would get certified as compliant to those standards and would not need to get audited by their customers, thus preventing the “audit fatigue” that many of those organizations feel. However, since ISO 9001 certifications are so easy to get in China, and since SA 8000 certifications are so hard to achieve, most buyers decide to “check for themselves”.

Note that some auditing/engineering agencies decide they need their own checklist based on what they (and their clients) decide is most relevant. For example, ISO 9001 does not force manufacturers to have a set of perfect samples available in all production workshops and QC areas, but it is a good practice and I think it should be part of the criteria that impact the final audit grade.

3. Process Audits Conducted by Engineers

Most auditors have very little first-hand manufacturing experience. It means their conclusions about a factory’s reliability have limitations.

For example, an auditor who knows nothing about wood manufacturing will have trouble estimating whether a factory follows the right steps to dry the timber. There are similar critical steps in virtually all production processes, from the setup of an injection molding machine to the way a CNC machine is maintained.

As I wrote before, process audits are useful in catching poorly organized factories (since it also includes checkpoints related to the quality system), but they also allow to catch:

  • Factories that don’t know what they are doing (e.g. jigs that allow operators to place a part in an incorrect position, a so-called engineer who doesn’t know the melting temperature of the most commonly-used polymers…)
  • Factories that have habits detrimental to quality (e.g. using recycled material for plastic injection molding, taking shortcuts during the setup…)
  • Factories that don’t pay attention to the long-term stability and reliability of their processes (e.g. in-adapted maintenance programs, machines that are running at too high a speed…)

The auditor’s findings naturally lead to recommendations that aim at working smarter: adopting best practices that improve both productivity and quality. For example, adding a control jig that catches problems more quickly and more reliably than the current method.

Do you use other types of audits to evaluate potential suppliers?

What QC Tools To Use for Problem Resolution?

Many buying offices in China struggle to have their QC inspectors (trained to assess conformity to a set of requirements) act as QA technicians (able to analyze problems and solve them). What type of training is appropriate?

I think the 7 basic quality tools are very appropriate. They are easy to teach and to use. According to Dr Ishikawa, these tools can help solve 95% of quality problems that are encountered in daily operations!

The question is, how to integrate these tools in a problem resolution method that follows the PDCA (Plan-Do-Check-Act) logic?

I found a simple explanation (see below graph) that puts it all together:

PLAN

  • Data collection to select an improvement project: use Pareto charts and/or scatter diagrams
  • Study of current procedures: flow chart
  • Thinking of potential causes: cause-and-effect diagram (or fishbone diagram)
  • Data collection on potential causes: check sheet
  • Data analysis: control charts, histograms, Pareto charts, and/or scatter diagrams

DO

(No need to use these tools)

CHECK

  • Data collection: check sheet, control charts
  • Data analysis to see if there is improvement: control charts, histograms, and/or scatter diagrams

ACT

(No need to use these tools)

Use of 7 QC tools Source: Primer for CQE exam, published by the Quality Council of Indiana.