Many companies that import from China pay for a third-party quality inspection before each shipment. At close to 300 USD per day of work, it quickly amounts to large sums.
Naturally, the question of how to reduce this budget is often asked by top management. They have the uncomfortable feeling of “being on crack”: they know it’s not the right thing to do, but they can’t get off the drug (or very bad things might happen).
So, what can an importer do?
Bad ideas to reduce your quality control expenses:
- Skip inspections on all orders below 20,000 USD (for example)
- Pay only for 1 day of inspection, even when the professionals advise to spend several man-days
- Look for a cheaper provider of QC inspections (in China there is always a lower price, but the service is usually quite different)
Why are these bad solutions? Because they reduce the amount of medicine without fixing the source of the problem.
What is the source of the problem? Unreliable suppliers, of course, but also poor quality assurance systems on the buyers’ side. Let’s look into this:
Good ideas to reduce your quality control expenses (on the buyer’s side)
- Preparing detailed product & packaging specifications, with clear tolerances
- Setting up a a series of QA gates: for example, don’t wire the deposit before all elements are approved, don’t authorize production start before a perfect sample has been approved, etc.
Good ideas to reduce your quality control expenses (on the supplier’s side)
- Work with fewer suppliers, even if it means average prices are a bit higher
- Audit seriously each new manufacturing facility before approving it
- Train the suppliers’ technicians and middle managers (not just the salespeople) to your needs
- Train one or two of their internal QC employees to do proper inspections, and audit their work regularly
I am not advocating to stop QC inspections right away, but to pay a lot of attention on upstream security instead. Over time, if all goes well, the proverbial “ounce of prevention” should replace most of the “pound of cure”.
What do you think?
This is so true, thanks for one more good post Renaud !
I really like the 2 good ideas on the buyer’s side: “detailed specifications & QA gates”, as even if it seems so obvious & easy, it is still NOT widely followed ! Same for the the 2 first good reasons on the supplier’s side: obvious and not systematically applied!
2 remarks though:
-For the 2 last ideas about “training factory’s staff”: it probably makes sense only for LARGE & REPEAT orders or one’s might not reduce his QC inspections budget but could increase it !
-I believe QC inspections have to be considered as a “filter” and not like the solution for all quality issues… And usually, such filter normally cost around 1 % of the price’s order, so a small price for a serenity shot… especially knowing the price of non quality at destination…
What do you think ?
Julien,
In some cases, QC inspections is a necessary evil and can’t be replaced/phased down. You are right.
But, in the case of what I call “hands-on buyers” (see definition on http://www.qualityinspection.org/hands-on-buyer), the long-term target should be to cut the number of inspections by 60-80%. Fixing processes upstream is much more valuable…