If you import products from low-cost Asia (China, but also Vietnam or India), you need to take steps to increase the odds that you receive high quality production batches. It means you work with the right companies, you set the right standards, and your standards are strictly adhered to.
SynControl's 10 step process to assure high quality production
We’ve come up with 10 steps that we recommend make up part of your QA strategy. They will only work, however, if you know your product as well as the requirements of your distribution channels (or major customers) inside out.
1. Background checks
Before you select a supplier, you need to do your research. There are now a number of companies that can help you run a background check on a Chinese supplier. If, for example, they pretend to be a manufacturer, but their invested capital is only 100,000 RMB, they should have a clear explanation for that disconnect. At this stage, you can also ask how the manufacturing process will be undertaken (and what they do in-house), what type of customers they currently serve, etc.
2. Do an audit of the factories
You need to be confident that manufacturers meet your criteria by auditing their factories. This may be very close to an ISO 9001 audit if the potential supplier’s operations are relatively mature. Or, if your strategy is to work with smaller/younger structures (for example, for lower MOQs), there is no need to spend days checking the quality system, and you need to develop a time-effective way of gauging their reliability.
3. Check that they are a good fit
ISO 9001 accreditations or passed audits are useful indicators when it comes to the quality management system, but they don’t guarantee that the suppliers will actually be a good fit for your needs. There is a tendency in China to look at documents only, but here you really need to get some extra perspective. You need to look at their size, their seasonality, their internal processes, their focus (high quality vs. high volume), and anything that is very important for you (e.g. short cycle times, ability to make a high mix of SKUs in low quantity, etc.).
4. Sort out the payment terms
Don’t pay everything up front. Wire a deposit of 15-30% max. If possible, pay by letter of credit on the first order. Many companies also get a specialized lawyer to write up an OEM agreement and it can help a lot. The purpose of all this is to keep some leverage in your hands for as long as possible, in case you find issues and you need the supplier to take action.
5. Get the right approval processes in place
This means having every QA/QC step documented so that new suppliers are properly qualified, each production batch is tested and inspected appropriately, and everyone is aware of how payments are to be made. For example, this includes the sample approval, inspections at the factory, the lab tests, etc.
6. Define product specifications
Without product specifications and a clear quality standard, how are you going to get what you want? This should cover what the product should do, what conditions it will be used in, what the packaging and labelling should include, etc. It needs to be agreed and signed-off with the suppliers before anything is produced.
7. Set regular inspections
You can’t do one audit and then assume that everything will be OK after that. Ideally, regular quality inspections would be undertaken during the production process and before shipments are made. Robust quality inspection software can help to streamline the process for you, especially, for instance, if you find that quality inspectors are working overly long hours and that the process of gathering and extracting data (using spreadsheets etc.) is laborious.
8. Build and keep a good relationship
You don’t need to commit to using one supplier forever, but it makes sense to build up and maintain a good working relationship for as long as it continues to work well for you. When it stops, it’s time to shop around, even if the only effect is to make your existing supplier take you seriously.
9. Have face-to-face meetings
Face-to-face meetings are still much more important than emails or phone calls in China, especially if you can get a manager or the owner present. This is one of the keys to a good working relationship. Get yourself heard. Keep an ‘open issues list’ up to date and keep asking them to make improvements. Track a few KPIs that are important to you (e.g. on-time deliveries, defective rate…).
10. Help them to improve
Convincing your suppliers to upgrade their facilities can be a difficult task to get done, but if you are in a strong position with them (let’s say you buy 40% of their output), you might be able to convince them. Some companies send their engineers, or external consultants, to fix a certain aspect of a supplier’s operations and they then reap the benefits for years to come.
Have your say...
Are you using any or all of these 10 steps to achieve high quality production in China or other countries in Asia? Which have made the greatest difference for your business? Do you have any tips or suggestions that I haven't mentioned here?
Please add your thoughts, or ask any questions you may have, as a comment below, and I'll be pleased to answer them.
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