• Quality Control when buying from China – Renaud Anjoran explains why it matters

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    Renaud Anjoran Quality Control

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    Renaud Anjoran, from France, is the founder of Sofeast – a Quality Inspection firm based in South China. He’s the guy to call when you want to be sure that your products are in compliance with your quality requirements, or when you already have serious quality issues. With years of experience in the industry, he has a lot to share with us. Renaud explains why Quality Control is essential for all businesses importing from China and how you can deal with your supplier when things go wrong.

    Renaud, tell us a bit about yourself and how you got into Quality Assurance to begin with?

    Originally I came to this region for a job in a trading company based in Hong Kong. After about 18 months, I felt Chinese manufacturers had cheated me in every conceivable way and I was very frustrated. I was trying to get in another activity.

    There seemed to be an obvious need for quality assurance on the ground, especially from SMEs (Small to Medium Sized Enterprises). So I set up my company and started providing this type of service. We now have technicians along the coast, in the main production areas.

    Your company Sofeast is located in Guangdong province. Why did you choose to set up your business here instead of Shanghai or Beijing?

    For the simple reason that it was close to Hong Kong and that all our work at the beginning was in the Guangdong province. The most mature exporters are established in the Pearl River Delta, since the opening of the Chinese economy started in Shenzhen. It means the manufacturers in that area typically have better quality and higher engineering capabilities. But they are a bit more expensive than in other areas.

    What exactly is Quality Assurance and what steps does it involve?

    Quality Assurance (QA) is much broader than Quality Control (QC), which only consists of checking whether conformity is achieved. QA consists of all the steps that prevent quality problems from appearing. Here are the most important QA steps:

    1.) Reviewing new product designs while thinking about potential problems (extra points if this is done hand in hand with the manufacturer’s engineers);

    2.) Checking and approving good manufacturers, and having them sign the right contract;

    3.) Ensuring the buyer’s requirements are clear for all parties based on perfect samples, but also on a written specification sheet;

    4.) Checking production, if possible at several stages (the earlier you catch defects, the easier they are to correct);

    5.) Learning lessons and improving the QA procedure over time.

    Note that all these steps need to be initiated by the buyer. When you buy from China, you are responsible for what you get. The challenge is to exert enough control over the factory, without falling into the trap of “baby-sitting” them.

    Quality Assurance is a very big industry in China. Why do you think it’s more important to hire a Quality Inspector when importing from China, as compared to Japan or the United States?

    First, products that are imported from China can’t be sent back to the factory if they are defective. Second, the legal system is still difficult for most small buyers to navigate. And Chinese suppliers know this – they very seldom compensate a customer for poor quality. Third, a lot of “China issues” are actually due to miscommunication. Sending a fresh pair of eyes in the factory is a good way to catch mistakes before the goods are shipped out – and while the factory can still make corrections!

    Most of our readers are start ups and small businesses with rather limited resources. Do you still think that hiring a Quality Inspector makes sense for these businesses?

    There are risk mitigation strategies, for example, keeping each order very small, or buying with a letter of credit. Most of the time, though, these solutions are actually more expensive than a simple QC inspection (less than 300 USD in most production areas in China).

    For very small orders, checking every batch might not make sense. It is up to the buyer to evaluate the risks he/she is willing to take. Just be aware of the downside (receiving products that can’t be sold/used after paying them in full).

    You’ve probably had situations where clients are not clear when specifying their quality requirements. This certainly makes it harder to properly execute a quality inspection. How can small businesses become better at this?

    Great question. I typically give a template that guides the most conscientious buyers. But I have noticed that few small importers take the time to fill it out. Many QA agencies can also help draft the specification sheet, provided they have a sample in hand. But investing about 250 USD for this also seems high to many small buyers. So the importer usually finds a workaround to save money. Here are a couple of them:

    1.) They ask for a shipment sample (taken randomly from production, one hopes) and comment on it. These comments are guidelines for the inspector.

    2.) They send a perfect sample, to be used as reference during inspections. That’s a good way to check the colors, the materials, the look & feel, etc. But it does not contain any tolerance, so in the end the result is necessarily subjective.

    In the worst cases, the buyer and the supplier argue about the result for days and can’t reach an agreement. The buyer feels cheated, but in reality he is the one who skipped critical steps.

    It’s quite common among Chinese suppliers to cut corners by using cheap and low-end components and materials, without the buyer’s knowledge. What can be done to prevent this from happening?

    That’s right. It is a risk, especially when the purchaser pushed prices too low and for one-shot orders. If the buyer identifies this as a high risk, then the critical components should be checked at the beginning of (or just before) mass production. Acting later is not a solution in most cases. For example, what can be done if the wrong grade of wood is cut and drilled? Either accept it or refuse it (and probably lose the deposit you have wired to the factory). It is too late to make any changes.

    As you can notice, “checking” comes back again and again in my answers. If a certain level of trust is in place, the buyer can ask for photos or videos from the supplier. Samples can be sent by DHL, FedEx or UPS. But, many times, resorting to a professional third party is the best option.

    How do you deal with situations where a large amount of defective products is discovered, and do you have any case study to share with us?

    This is an interesting question because most buyers get this wrong. The natural tendency in this situation is to put pressure on the manufacturer to re-work or replace the products, and to present the goods for re-inspection. Unfortunately, this is not enough!

    Here is an example of an importer who got this right. We found a lot of defective goods. The buyer asked the supplier for a plan of action. The buyer asked for photos, and then for a sample, of a few products (no more than 10) that had been re-worked as suggested by the supplier.

    At the same time, the factory was asked to sort the goods into “good” and “bad” buckets. They gave their numbers, which (unsurprisingly) didn’t match our inspection’s findings. So they had to do their sorting again, under our supervision. This time they found roughly the same proportion as we had. The final step was re-working the thousand of “bad” pieces. The supplier was asked to first act on 10% of that quantity and to give comments to the buyer (how many couldn’t be re-worked, photos of re-worked pieces…). Then they were allowed to finish the work.

    This is how you avoid re-inspecting and then re-re-inspecting before finally accepting the goods – Chinese suppliers know that you need to deliver something to your customers soon!

    I’ve got quite a bit of experience from quality inspections myself. To be honest I cannot recall one single time when a product batch was perfect (i.e. no defective units or other issues discovered at all). Have you ever inspected a completely spotless batch?

    I can’t remember a single inspection where there were zero defects. Sometimes the products come out of a machine and are all fine, but there are defects on the packing. It does not really matter, though. Companies that purchase from China shouldn’t expect defect-free shipments. Nobody has ever reached zero defects, not even the best Japanese factories. What you should expect is a low proportion of defects, as well as the absence of defects that might hurt someone.

    What do you think about the future? Will there still be a need for third party Quality inspectors ten years from now or will Chinese suppliers reach a standard where they are no longer needed?

    This is a good question that calls for a nuanced answer. On the one hand, yes, there will still be third-party inspectors in ten years in China, just as there are still inspectors in Taiwan or in the United States. Surprisingly little has changed over the past 5 years: quality inspections are still a must for most retailers and professional importers. Quality in China does tend to go up. However, pricing pressures are as high as ever, which means new unstructured workshops keep opening and getting business – and these guys are at level zero in terms of quality.

    On the other hand, I think half of today’s Chinese exporters will be out of business in 5-10 years. Those that will remain will be better organized, will offer higher quality, and will understand their customers’ needs better. This is a new market: factory improvement. I am also involved in a company that provides this type of consulting. In conclusion, nobody can predict the future with certainty, but we can certainly plan for it!

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