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Some people I talk to think it is a must buying quality control services in China. Some think there is really no need to buy quality control services in China. So what’s the answer?
As always…It depends…
It depends on your product, your suppliers, your own infrastructure in China, your market and a few more factors.
But one thing is certain: Somewhere, in your supply chain, there is at least one quality control function, whether you operate if yourself, or outsource it.
Quality control function cost money, and depending on their location along your supply chain, they create or save cost. If the functions are located in the wrong place along your supply chain, they create costs you can avoid.
Many companies provide quality control services in China. If you hire the wrong one, your service provider might approve product you cannot accept, and reject perfectly sellable goods. All this represents cost that piles up. Can you afford that?
Here’s how some people increase their own cost
#1: Pay for conforming goods only and not perform QC inspection in China.
One of the explanations I hear from people about why they don’t need to use any quality control function in China is that they pay their supplier after goods arrive in the destination country.
They inspect the goods in the destination country and pay only for the quantity that passed their incoming inspection. Goods that failed the incoming inspection, are returned to the supplier.
This model works for companies that the value of lost sales due to non-conforming goods is lower than the cost of a QC function in China. If you have to pay for shipping the defective goods to China and for the shipment of goods after rework back to you, then add that to the above equation.
If speed to market is an important factor and some of your suppliers still ship batches with non-conformity ratio you cannot accept, this supply chain model may not be suitable for you.
By the time your goods arrive in your destination country, you usually have very short time before you ship them to your customer.
You can’t afford to find out, at that point of time, that the quantity that passed your incoming inspection, is not enough to fill your customers’ order.
In this scenario, the loss is not only lost sales, but also damage to your company’s reputation.
#2: Hire the wrong quality control service provider.
Just like manufacturers, a service provider is “right” or “wrong” depending on your circumstances.
The “right” service provider can communicate with you effectively. Their business model aligns their agenda with yours and they understand your industry and market. But on top of all, they are service oriented, trustworthy and ethical.
The “wrong” service provider may not have the right communication skills. They may not understand your standards, disqualify sellable goods, and accept products that meet standards you never defined.
The “wrong” service provider may focus on sending you clear and detailed reports, describing each and every little problem they found in the goods. What they will not do is help you make a decision whether to accept the shipment or not. Their main goal is not to be blamed they released non-conforming goods, while their goal should be to help you ship as many goods you can sell, and hold shipments you shouldn’t deliver to your customers.