It’s important to inspect product quality, but if the inspections you get done aren’t optimized you could end up spending too much on high product inspection costs which is a problem when that money could be used for other activities.
This post gives you an insight into the factors that drive QC inspection costs and some tips on how to reduce them while still inspecting quality in a careful manner which is unlikely to let issues escape unnoticed.
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🎧 Tips for Reducing QC Inspection Costs
Today’s topic: QC inspections and how to reduce their cost.
We’re going to look into product inspection costs and what drives them up or down.
There are 2 drivers of inspections costs:
- Elements from the buyer’s side: Your product, design, supplier, order size, etc – things you control and influence.
- The inspection process – tweaks to these can cut costs but is reducing inspections a good tradeoff when compared to the risk of issues slipping through the net. (01:19)
Elements from your (the buyer’s) side that drive inspection costs – 1. the product type.
If you have a simple product it’s less likely that things will go wrong after it’s produced than with a more complex product. Designing your product to be simpler, have fewer parts, be mainly from a mold, etc, could reduce the need for more inspections.
But if you have a supplier-designed product or are white-labelling existing products you may not know what is really important about the product that should be focused on in inspections. For example, class III medical devices must function and be reliable all of the time, but aesthetics may not be critical. Whereas a giveaway tee shirt may only need the logo to be the right color and have the correct placement, whereas fabric quality is not much of an issue. So understanding what it’s most important to inspect and emphasizing your needs to inspectors is key here otherwise inspections may miss something that turns out to be critical or inspect everything which could be inefficient and costly. (02:46)
Inspecting a bicycle (example).
There could be, say, 300 checkpoints to check on a bike, but is it worth paying for an inspector to check every single one on samples over several days? Probably not. So you need to consider the tradeoff you make if not inspecting certain items that you deem to be less likely to be problematic. For example, if a component is die-cast maybe the inspector just needs to check one to make the assessment that they’re likely to be alright, whereas, for a part of the bike that was assembled manually, it may be safer for the inspector to check all of them as the likelihood of assembly errors is higher. With so many potential checkpoints, you need to make the call on what gets checked because otherwise, you leave the inspector to make that call which may not be what you expect. (06:33)
Elements from your (the buyer’s) side that drive inspection costs – 2. ordering patterns.
If you buy one product in a single color and in a quantity of, say, 20,000 pieces per time, inspection costs shouldn’t be too high because it’s a straightforward job for inspectors where they’re only checking the one product and don’t have many variables to handle and take up their time. On the other hand, if you place a dozen orders of different SKUs in different colors and made from different materials, you can see why it’s going to cost more to basically do up to 12x of the inspection work on the different products, their packaging, labelling, etc. It may be possible to reduce costs in this situation by doing some random sampling inspections and focusing on certain colors or materials over others if you deem them to be ‘riskier,’ but nonetheless, it’s a lot more inspection work. (07:59)
Elements from your (the buyer’s) side that drive inspection costs – 3. the choice of manufacturing facilities and how ‘good’ they are.
It’s logical that using really good manufacturers for key components, assembly, etc, should result in better quality products in comparison with working with tiny workshops being run out of a garage, etc. (09:52)
Inspection processes that drive costs – 1. 100% or random sampling inspection?
Inspecting 100% of the products is not typical (and even if 100% are inspected it doesn’t mean that all of the possible checkpoints are checked) except for very high-value items like jewelry, pilot run pre-series products, vehicles, and some other products, but for most consumer goods this isn’t necessary and it makes more sense to do random sampling inspections. (10:42)
Inspection processes that drive costs – 2. Should you check every batch or use skip lot inspections?
If you work with a manufacturer with stable processes and products who have been performing well and passing inspections for some time, you may consider skipping some of the inspections, perhaps limiting them to larger orders only. You may also inspect at random without telling the manufacturer when one is going to occur. (12:14)
Inspection processes that drive costs – 3. Should you inspect close to the source or when you receive products as an incoming inspection?
If you have a cooperative manufacturer who is willing to rework pieces or components with issues found in an incoming inspection in the same country that’s good and there may be no need to send inspectors to their factory. In some cases, they might even send staff to rework items at your warehouse or assembly facility if it’s fairly local to them (this happens with our contract manufacturer facility Agilian in Dongguan sometimes).
But if a manufacturer is assembling your new complex product and shipping it from, say, China to the USA, then you should be inspecting both critical components and finished products in China first.
Doing incoming QC if possible is a lower-cost way to perform inspections than sending inspectors around whichever country to do the job. (13:08)
Approaches you can take to reduce the cost of random sampling inspections.
When doing AQL inspections, reducing severity is possible when working with a reliable supplier and if the risk isn’t too high you can adjust the AQL level and even use special levels. This is relevant for destructive tests where testing too many pieces leads to costly waste (like rifle ammunition casings where bullets must be fired to check them) and you check a smaller proportion of the whole batch by design in order to reduce waste, and time-consuming checks like checking a complex device like a smartphone (there could be hundreds of checkpoints, so checking fewer pieces will save a lot of time).
Thinking carefully about how many checkpoints are truly required is a way to reduce costs in random sampling inspections, too, because out of hundreds it may be that you only really need to check, say, a dozen in order to have a clear idea that the product is of acceptable quality. (15:31)
Process engineering for the inspection process can make it more efficient.
Inspections are a process, and if we improve the process we can make it more efficient and less costly by putting in place measures that lower the need for so many inspections or the length of time they take at least. In the auto industry, components manufacturers also define how the parts should be tested, how to measure them and validate that they can be checked quickly with few false positives. They may even prepare tooling like checking fixtures to check dimensions. Even if a product includes functions that need to be tested that are new for your manufacturer, it’s possible to search and find a device that can test it (for example, the opening and closing of a clip) within a few hours and create the fixture and device that provides a repeatable and objective way of confirming that the part is within the standard for a low cost. This can be used by the manufacturer on their own line to check pieces during production, and when you do have an inspector finally visit they won’t have to spend so much time checking, and time is money when it comes to product inspection costs. The same fixture and device can be used in your facility, too, so you can do some incoming QC to double-check pieces. (19:17)
Quality: Pay me now or pay me later.
Paying now to find a good supplier with a solid quality system, to work on the product design to find and fix possible quality issues and test it, to get close follow-up during the product development, pilot runs, and first batches to detect and fix issues early, and monitor mass production is actually worth it to avoid serious quality issues in finished products.
Paying later to try to fix those issues can be impossible for some businesses and we have seen clients close down companies because their whole batches sent to a key customer were rejected. Safety recalls in particular are very damaging. So paying later is expensive even if you can afford to. (24:20)