In some cases, it makes sense for an importer to work with a trading company and to count on them for managing developments and productions properly.

Since a trading company is supposed to follow up on production and since all communication goes through them, it is crucial to ensure they are well organized. As I wrote before (in disorganization between importers and suppliers compounds), the difference between a well-organized trader and a disorganized one is huge.

Here are two common situations:

• Disorganized buyer + disorganized trader + disorganized manufacturer = a huge mess.
• Disorganized buyer + very organized trader/agent + disorganized manufacturer = few problems.

Unfortunately, it is difficult for a buyer to estimate how well organized a trading company is. A few clients have asked us to do this on their behalf. We wondered, since there are no production processes in a trading company, what should be checked?

Actually, a checklist based mostly on the ISO 9001 standard is a very good start. Our audit checklist is composed of four parts. I pasted some of the checkpoints below, as examples.

1. Quality management system

• Is there an overall diagram of the purchasing-related process, and of the quality-related processes?
• Do company employees have standard procedures to follow? If yes: are these procedures easily accessible to employees?

2. Management responsibility

• Does the company measure customer satisfaction? (Example: surveys, rate of repeat business…)
• Has the company written a job description for each position?
• Do the job descriptions include the skills, education, and experience necessary for each job?

3. Provision of resources

• Does the company have formal training programs, and can records be shown? If not, does it have a good way of giving necessary competencies to the right employees?
• Does the company have a formal employee evaluation programs? Can records be shown?
• Are samples properly identified, stored, and protected?
• Are there testing/measuring devices in the office? Are they adequate to the products?

4. Product realization

• Does the company prepare/have perfect pre-production samples for each product?
• If the customer requirements are changed, is this clearly recorded (on the samples’ identification, on the specification sheet’s version…)?
• At the end of the pre-production development phase, does the company have a document that includes criteria for acceptance of bulk production (example: a specification sheet with expected results and tolerances)?
• In case of repeat orders, and in case a component or a process is modified in the new batch, does the company ask for the customer’s approval? (Ask for emails representing such cases).
• In case a batch is found non conform to customer requirements, does the company inform the customer and ask for the next step to follow? (Ask for emails representing such cases).

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How do you evaluate trading companies?