On Sunday I met with an American importer who has been sourcing from China for many years, and who shared his frustrations with me. His biggest headache, it seems, is maintaining his quality standard.

Why is is so hard? Because of his customers’ pricing & timing demands. He has to pressure manufacturers on these two fronts, which tend to take precedence over quality. It is sad to see that pricing and timing are “order qualifiers” because they are easy to quantify and to compare, while quality is often “nice to have, at least most of the time”.

Well, guess what? Chinese suppliers get the message, loud and clear. And it is really hard to keep a quality standard up over time.

Let’s say a factory makes a mistake. Something that might cause rejection of the batch by the retailer (with a 15% probability, let’s say). BUT there is no time to fix it–the goods must ship out tomorrow, or it will get noticed and the order will be canceled.

In this case, buyers usually give this instruction to their Chinese suppliers:

We don’t have time to fix this problem. To avoid canceling the order, we authorize you to ship out, but this is exceptional.

Then the salesperson tells his production & logistics colleagues to arrange shipment. What conclusion does everybody draw, in the factory?

It is OK to make this kind of mistake for this customer.

So, next time they do it again, and the importer refuses, their response is invariably along the lines of:

But last time you accepted the same thing, so it is not a big problem for your customer, right?

Ouch. Help these people once, and they take advantage of it at your own expense!

What the purchaser should realize is that it is a game. So, why not also play a game? For example, here is what the buyer might write to his supplier:

If we authorize you to ship this time, will you promise to never mention this case to us again in the future?

Do you understand that this would be an exception and that 100% of future shipments will be refused if this same problem is found?

If you respond “yes” in writing, it will mean yes to these 2 questions, and then (and only then) you will be authorized to ship.

It might help. Unfortunately, the factory people (except for the sales person/agent/trader) will definitely remember the decision (OK to ship) alone. If that happens, the importer can ask for a letter from the boss stating that he understands this is an exception and that 100% of future shipments will be refused if this same problem is found. Or maybe ask the supplier to sign a letter of guarantee (they would pay all charges if this specific problem is rejected by the retailer).

Any other tips?

————————-

Related reading: Managing urgent shipments in China