“Exercise caution in your business affairs; for the world is full of trickery. But let this not blind you to what virtue there is…” Max Ehrmann, “Desiderata”
There are numerous advantages to sourcing product from China that extend beyond the immediate benefits to gross margin. For many companies, the ability to focus on core activities is reason alone to consider outsourcing. However, there can also be a number of advantages that arise out of the cost and efficiency savings, reduced overhead, staffing flexibility, and other value-adding consequences of outsourcing procurement to a qualified China supplier. Why then are so many companies afraid of outsourcing? Often blinded by the unwanted consequences of buying from China, they are lulled into doing nothing. There are too many horror stories, many of which have become urban legend, that prevent good companies from making smart decisions when it comes to China sourcing. However, many of these risks can be effectively controlled by finding the right sourcing partner. One of the key concerns that we hear again and again is the fear of compromising quality control. By definition, outsourcing is the transfer of the control of a process or product to a supplier or third party. Therefore, it is the fear of losing control that often prevents companies from realizing the tremendous benefits that outsourcing can offer. A lot of this fear is driven by a lack of visibility and tendency to believe that if it has happened to others it is bound to happen to me. But a well defined procurement strategy that involves teaming up with the right sourcing partners will not only provide the visibility that can allay these fears, but also improve governance and control quality for you at origin. Good visibility is only part of the solution. The other part is the caliber of controls that are in place, consistently applied, to reduce variances, which ultimately limit process performance. There are a few key things to look for when evaluating a partner that you will use to manage you China product quality control:
1. Quality Control is a Multi-tiered Process:
Look for companies that understand that quality control is a dynamic process. They should have a clear procedure in place that looks at quality not as something that is managed at some moment in time (like at the end of production, during a final inspection) but rather something that is embraced all along the production schedule.
2. Understand Your Manufacturers:
Good quality control procedures commence with a sound understanding of the manufacturer. When looking to companies that can help you manage quality control, make sure that their quality management system begins with a comprehensive review and pre-qualification of the supplier to identify: a) corporate and organizational deficiencies that could threaten the capacity to deliver product fit for use or to execute remedial action if needed; and b) detect conditions that could increase the probability of nonconformities, including a review of supplier’s quality system. There are a number of areas this review should address.
For any quality control management system to be effective, it is imperative that comprehensive quality assurance procedures are in place. Full specifications and procedures should be captured in quality control templates and protocols that detail: general requirements, appearance, material and specifications, certifications, dimensions, and performance concerns. All testing requirements, methods, standards, and tolerances should be clearly defined, with critical, major and minor defects noted for each specification.
4. Map Out the Production Process:
An understanding of how your goods will be manufactured is highly important so that you can identify all milestones and stress points. Many of these should be covered in the initial audit if you are working with a qualified partner. Ensure that the inspection schedule timing is calibrated to moments in the production process when the conditions that could cause nonconformities can be controlled. This will save you a lot of time and expense later when problems arise.
5. Review Quality Control Reports:
A qualified inspection company will be able to show you templates of their quality control reports before you engage them to work as your agent in China. Good inspection reports will contain, at a minimum, the inspection method used, the sample size, workmanship, performance, critical/major/minor defects, packaging, markings and specific testing. All reports should be well presented and all inspections should be governed by Mil-S-19500, Mil-M-38510 and Mil-STD-105D.
6. Find a Partner that will Resolve Problems:
Many inspection companies will only identify nonconformities according to a strict definition that is driven by the specific criteria you provide to them. Few will help you resolve issues when they arise. Look for a partner that will perform a detailed problem/resolution analysis for you that identifies: containing actions; root cause analysis; corrective actions and preventative actions. There are many companies in China that are adept at identifying and defining defects. But what separates the top from the rest are those that have the capability to analyze the defects using various measures and suggest improvements to help correct and prevent these from recurring. Ultimately, look for a partner that has metrics and controls in place to achieve the goals of your business and the daunting task of outsourcing procurement to China can be easily managed so that your company can reap the tremendous benefits without losing sleep in fear that you are losing control.