This is the fifth part in the series about the management of QC inspectors in China. I touched on the evaluation of quality inspectors, and it naturally brings up the topic of bribery.

How big of a problem is corruption of inspectors in China?

In many developing countries, people in a position of authority, and to a lesser degree those who report information for use by decision makers, are prone to corruption. It happens in Mexico, in China, in Bangladesh, in Egypt, and in many other places.

Most people who have been involved in the Chinese manufacturing sector has stories about corrupt auditors or inspectors (many originating from Mainland China, but many others from Taiwan, Hong Kong, Germany, etc). And I think it is fair to say that most Chinese manufacturers are willing to give a “red envelope” if it allows them to ship a batch without complications.

As a consequence, many people conclude that “all inspectors are corrupt”. And this is very wrong. As often in China, one can find anything — from the very worst to the very best. So the question is: how to minimize the risk of bribery among your inspection team?

I wrote a few tips below.

1. Do not let your inspectors take decisions by themselves

Many buying offices let their QC staff authorize manufacturers to ship the goods out immediately if they found nothing bad. Such decisions are often taken in “the heat of the moment” — sometimes the container already arrived at the factory dock and is ready to be loaded! The factory thinks “the inspector just needs to tick the right box” so it makes corruption more likely.

The best is to decompose decisions as below:

• The information is collected and reported by QC inspectors;
• The quality decision is taken by the quality manager;
• The business decision is taken by the COO, the buyer in charge of that commodity, or someone else in a position of authority.

2. Set a reasonable schedule

As mentioned above, some decisions are taken in a heated atmosphere. The buyer calls the inspector, the factory owner is talking loud and his wife is screaming, the logistics company asks when the container will be loaded… This situation is not conducive to good decisions. And it nearly guarantees that the factory will ask the inspector “what can we do to get a passed result?”

Even worse, inspectors who finish a job late at night tend to sleep in a hotel close to the factory. Bribery can take many forms. Would you like your inspector to end up in a KTV with a charming hostess, on your supplier’s account?

Instead, allow sufficient time for the inspection. If needed, spread it over several days, and keep a few days before the ex-factory date. I know this is not always practical, but you might be able to put penalties in place to discourage the bad habit of scheduling the final inspection a few hours before loading the container.

3. Rotate inspectors among factories

The closer an inspector is to a factory’s employees, the higher the risk of misrepresentation in his QC reports. That’s why many buying offices try hard to rotate their QC staff. Here are a few examples:

• One employee stays close to a factory for 3 months, then close to another one for another 3 months, and so on.
• The manager ensure that every factory never knows who will visit them.
• Merchandisers and purchasers often go in the field with (or without) inspectors.
• A small proportion of inspections is given to a third party QC agency, for benchmark purposes.

The purpose is to avoid social pressure from “friends”. “I give you a ride and a good lunch and you pretend to overlook a few issues” is actually much more common than “I give you a red envelope and you give me a passed report”.

Side note: the type of defects covered up in such cases tends to be less serious, and therefore many people don’t consider it a big problem. And they are wrong. An inspector or auditor who starts to misreport reality is taking bad habits. And those bad habits die hard!

4. Request detailed reporting

Quality controllers travel to factories/warehouses. It makes them difficult to manage. However, setting up internal controls is not impossible.

I mentioned announced coaching sessions as well as unannounced audits in a previous article. Another type of internal control is detailed reporting, which includes:

• Filling out a form that is based on the checkpoints to follow;
• Taking photos of all details of the product and its packaging.

I noticed that most manufacturers and trading companies do very little reporting (if at all) about their QC activities. Most buying offices, however, require detailed reporting. It is time consuming, but it bring key benefits as listed below:

• It gives a sense of accountability to the field QC staff;
• It allows the quality manager to detect if the wrong standard is applied (e.g. too strict or too lax) based on photos of the defects;
• It reports the findings in a way that makes it possible for a manager to take a decision;
• It is useful when an issue is discovered after shipment — finding the root cause(s) and assigning responsibility is often easier.

5. Keep a close personal relationship with the manager

Chinese employees usually have no loyalty toward their company. But the link with their supervisor or manager can be very strong. If, as a quality control manager, you want to trust your staff, you need to do some face time (for example by providing training and/or coaching). Regular phone calls help but are not sufficient and emails don’t count.

6. Let the bad apples go

As soon as you have a high degree of certainty that an inspector behaved badly, you have to fire him/her. If you keep him/her, other employees will notice and will become cynical. Worse, younger recruits might follow the example of more experienced employees who cut all sorts of corners!

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Do you agree? Any other tips?