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).
How do you evaluate trading companies?