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.
#3: Hire QC inspectors directly without being able to effectively manage them.
In many ways hiring people in China is the same as hiring people anywhere else in the world.
It is true that hiring people in China has its own unique issues that result from the local culture, local regulations, etc.
Still, some people ignore what they already know about hiring people in their own country when they look for employees in China.
People, anywhere, have to be motivated, trained and supported. They need to feel they are a part of the organization they work for and this means that there is a two-way relationship: They work to help the organization achieve its goals, and the relevant people in the organization provide support, appreciate and recognize their efforts and achievements, and not less important, take care of their work related needs, and be sensitive to their personal needs.
All above is not easy to manage from across the ocean, over long periods of time and across time zones, culture and language differences.
It is very exciting for anyone, to be hired directly by an overseas company, and report to the headquarters. Many people, including in China, will accept such an offer happily. It promotes their self-esteem and many times it is viewed as a step in the right direction along their career development path.
The hiring manager is usually happy about the cost saving, so everyone is happy.
For this model to work, first of all you need to have your own company in China, or go through an authorized company so you hire your Chinese staff legally.
Second, both the QC inspectors and the hiring managers must have a certain skill set. The QC inspectors must know how to work with international customers. They need to know how to manage their own time, the relationships with the suppliers and the conflict of interests between their employer and their employer suppliers.
The hiring managers have to understand the reality their inspectors are working in. They need to understand the distances, how they are treated by the suppliers, the costs their work is generating and more. They also need to be prepared to invest the time needed to manage and support the inspectors and communicate with them well out of business hours.
If the above conditions are not in met, the inspectors work will become inefficient and frustrating. They will feel their employer is not supporting them and their motivation level will drop.
The hiring manager will experience the same feeling of frustration. They will feel they don’t get the value for what they pay. They will question the capabilities of their inspectors and in worse cases, their reliability.
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