Pre-shipment quality inspections are critical when buying from China. Yet, they may be of limited use if you’ve selected a supplier neglecting your quality requirements from the very beginning. This is where a Quality Management System (QMS) comes in. We get a lot of questions from our readers about ISO 9001, and other QMS, and how much of an impact these actually have on the final product.
So, we decided to ask an expert – Renaud Anjoran, founder Sofeast, one of China’s leading Quality Inspection and Quality Assurance firms. In this article, Renaud explains what a QMS is, and why it matters when selecting a manufacturer.
Renaud, tell us a bit about yourself and how you got into Quality Assurance to begin with?
I got into this field by following opportunities at the beginning of my career, as often happens. In 2005 and 2006 I was working for a small Hong Kong trading company, and I was spending a good part of my time checking production status and quality in factories. When I started my company, the first client trained me to do quality control in their suppliers’ factories, and slowly I hired and trained my team.
Over the years I have enlarged the scope of our services — we are still in the quality field, but it is much wider than “quality control” (which means only checking if specifications were respected).
What is a Quality Management System and why is it relevant to importers?
A quality management system (QMS) is a crucial part of the way a company does business. Simply put, a QMS is the integrated manner in which a company ensures it delivers on its promises. Setting up a system means setting up a number of elements so that they work together harmoniously and produce a desired result. And the goal of the quality department is to deliver on promises, so that customers are happy and come back. The main elements of a QMS are listed below:
- Specific objectives, for example, keeping customer complaints below 1%
- A certain way of doing business and managing employees
- A certain setup of the processes involved in delivering products or services
- A set of procedures and training programs (to ensure employees know how they are supposed to do their job)
- A way of ensuring employees get the information they need
The most common structure of a company’s QMS is based on the ISO 9001 standard, which outlines a set of minimum requirements. ISO 9001 is designed as the very minimum a company can be expected to do with regards to its QMS. Not surprisingly, in certain industries that require above-average quality levels (e.g. car parts, aerospace parts…) professional associations have published specific standards that include additional requirements.
A company that wants to demonstrate its compliance with a QMS standard can apply for third-party certification (also called “registration”) by an authorized body. That body sends auditor(s) on site who evaluate the degree of compliance to the standard. Note that the company applying for certification pays the authorized body, so there is an obvious conflict of interest — the auditors may be given instructions to be more accommodating than they should in order to please their client. This is at work in every country, but is more acute in China.
Note that a QMS standard applies to a company (or to certain parts of a company). It is quite different from the standards that apply to products (e.g. RoHS, REACH…). An ISO 9001 certified factory may ship products that are not conforming to the requirements imposed on the buying company’s country. Actually, it happens every day (and I guess every minute) in China.
What are the various Quality Management Systems importers should be aware of?
The most widespread, by far, is the ISO 9001 standard. Depending on the products purchased by the importer, other QMS standards may be more applicable — for example ISO/TS 16949 for car components. And sometimes the most important standard might be called a “safety management system”, like ISO 22001 (for food products).
Is certification mandatory, or is it common that Chinese manufacturers implement a Quality Management System without obtaining the paper?
Certification to a QMS is not requested by law. Often, customers request manufacturers to get certified. (By the way, trading companies can get certified too.) Or a company decides to get certified in order to build customer confidence, as a marketing asset.
Every company has a quality management system in place. Let me take 3 examples regarding in-process quality control (which is only one of many elements of a QMS).
- Maybe it is very rudimentary — for example the owner of a 10-people workshop looks at production and decides by himself if it’s “good enough”.
- Maybe it is a little more advanced — the production line leaders, or a quality control technician, tries to notice defective products and sets them aside.
- Maybe it is more advanced, with go-no go gages, successive inspection by operators, and/or digital sensors. In each case, a QMS is in place, but the first example would probably fail an ISO 9001 audit.
I should add that buyers should not be happy to know that “factory ABC is ISO 9001 certified”. In itself, it means nothing. The scope of the certification might be limited to a product line you are not buying. Their quality objectives might call for “no more than 90% unhappy customers”. Without asking for their quality manual and their objectives, and translating them, you can’t assume a certification means something.
Right, but how can you determine if the supplier is applying a comprehensive Quality Management System if they are not certified?
First, an importer might not care much about its supplier’s QMS. Maybe the buyer’s quality standard is pretty low. Or maybe the buyer works with a supplier that has a weak quality culture, but ensures that its dedicated lines are up to the right standard (that’s what Apple does with Foxconn).
Second, to respond to your question, buyers can send their own auditors in the factory, or hire a quality assurance agency to do this (it is called a second party audit). I could write pages and pages about this, but in summary, I can say that our auditors pay particular attention to incoming QC (how the components/materials are checked when they arrive), in-process QC and production organization (are most issues caught early or even prevented?), final QC (if there are issues on finished products, is there a good chance that they are stopped?), and instrument calibration (are the factory’s own tests and inspections reliable?). Many other things can be checked, depending on the type of production — for example maintenance is critical when machining precision parts.
On the other hand, how common is it that suppliers do obtain a QMS certificate without actually implementing it?
Very common. As I wrote above, there is a conflict of interest (many certifying bodies in China are very lax) and manufacturers know how to take advantage of it. Add to it the risk of the auditors getting bribed — which happens less often than people think in this situation, but can be a factor — and the high number of fake certificates, and in the end an ISO 9001 registration doesn’t mean much.
To be fair, an ISO 9001 certification from a few large certifying bodies, such as TUV Rheinland or Intertek, means something. The risks of a very lax application of the standard are lower.
I will add that, from my observations, Chinese factories are very cynical about the ISO 9001 certification process. If they want to do a good job, they will usually work on it independently of the “paperwork” they prepare before an ISO 9001 auditor comes. More than 90% of them don’t see ISO 9001 as a discipline necessary to produce at a high quality level.
Am I therefore right to assume that importers should not relax their Quality Assurance procedures, even when buying from a QMS certified supplier?
Yes, you are right. Many importers are frustrated about their Chinese suppliers’ attitude. The factory doesn’t share the findings of their internal inspections and tests (when they actually do these activities), and generally speaking there is a lack of trust in the supply chain. A factory that catches a batch of defective products might not have time to rework it, and the boss may take the decision to “ship it anyway and let’s see if the customer notices it”. Or they might subcontract the order to a poorly organized workshop, and nobody will check the quality before shipment.
That’s why performing QC inspections and laboratory tests, either internally or through dedicated service providers, is still a must. Even with an ISO 9001 certified factory.
Is QMS certification more important in some industries, and less important in others?
I would say, the first factor to consider is the amount of business you intend to purchase. If you place small orders, you will most likely work with smaller suppliers that are usually not ISO 9001 certified. And it might be the best fit you will find for your needs.
The type of product matters too. If you purchase socks that come out of a machine made in Italy, all you care about is (1) not getting cheated on the yarn they use and (2) the maintenance and settings of the machine. It is a simple product and you can probably tolerate a few quality issues.
If you purchase toys, electrical appliances, or other sensitive products (with a risk of a major recall), you are better off looking for a factory with a certified QMS — but you should also ask for the product certificates and run your own tests and inspections. If you purchase complex products such as electronics, you are also much better off working with serious manufacturers. There are so many ways their products’ functions can fail, a certain level of organization is a necessity. In this case, an ISO 9001 certification is a positive sign.
Right. It’s clear that a QMS certification is relevant under the right conditions, but that there are many other factors to consider when selecting a manufacturer. What signals do you recommend small to medium volume importers look at?
- There are many signals, but here are a few that I think are helpful and not very difficult to gather without even going into the factory:
- The amount of capital invested in the company: the higher, the better. You can ask for their business license — if they don’t want to share it with you, it is suspicious.
- The supplier’s familiarity with safety standards of the importing country. Can they talk intelligently about it?
- The address (is it in an industrial area?) and the number of photos on the website: how likely is it that they are just two guys in an apartment?
- Their acceptance to receive your samples in the address of their email signature (if not, it is suspicious). Not that you don’t have to send those samples — but you can ask this question.
- Their acceptance of factory audits and product inspections to be carried out by an independent agency. If they push back, they are not used to working in a professional and responsible manner.
- The number of trade shows they have attended in the past, and whether they have paid accounts on B2B directories such as Alibaba or Global Sources. It gives an idea of their marketing budget and their stability over time.