Much has been written about supplier quality management in China. Most of the information is fairly accurate, although not always. Quality management is a complex issue, particularly the management of distant sources, and a field that entire educational programs and careers are dedicated to. So the key issue for someone who is not a QA professional becomes one of successful application of the available resources for the best possible results from your outsourcing activities.

For the purposes of this article we’re referring to custom products, not buying a stock product such as an MP3 player. Rather than discuss the details, let’s begin with the broadest issues and the options that will influence your results. Unless you plan to build a career in QA, what you really need to know is how to hire the right QA professionals to manage your quality and conformance interests.

--Select a Competent and Motivated Supplier--

I’ll immodestly call this “Hetzel’s Law” – Good Supplier, Good Results; Bad Supplier, Bad Results. I’ve found this to be true throughout my career in manufacturing (20+ years) and my experience in global outsourcing (18+ years, including the last 6 years with Pro QC), and not only offshore but locally. Yes, it is as simple as it sounds, but it’s difficult in practice to find the “good” suppliers.

A good supplier is not just defined by the agreement you reach with the factory owner or manager. He or she may have the best of intentions but lack the control of their operations to ensure that their commitments are consistently delivered. Be sure to assess the entire operation in this context. Assume nothing about their control of the factory and assess their operations in detail, not just the commitment of your counterpart there. A factory audit is the only way to determine this. This context is often missed during the selection process.

Another area that’s often missed is to assess the supply chain that feeds inputs for your product to the factory that’s “your” supplier – the one who ships you the goods. Once again the factory manager at your source may have every good intention, but then one of the suppliers of inputs for your products cuts corners and your results will be failed product. I can’t count the cases where we’re booked to audit a supplier but when we recommend that we also audit their suppliers of key inputs, our client will balk at the expenditure (generally less than US$1,000.00) yet potentially face a multi-million dollar recall later on. This is the same for inspections, where buyers will schedule inspections of finished goods but often not consider inspections of the inputs that will become embedded in their products and unobservable, even though an inspection is generally below US$300.00.

In other words, don’t get so caught up in saving that last possible dime in China that you lose your clients or even go out of business. Many of our clients report that we save them a net 7-10% on their outsourcing after paying for our services, when applied correctly and as opposed to their costs when going it on their own. Whether it’s Pro QC or another third party quality provider (“3PQ”), controlling your quality as early in the process as possible is where the “last dime” cost savings really are found.

Consider the lead paint issues with the toy market recently. You may recall that at least one major toy company admitted that they relied on material certifications from the paint supplier – certs that anyone can print up from a computer – rather than on inspections of the paint before use in production. And once a defective input is embedded in a product, such as the paint being applied, the economic loss of corrective action increases dramatically along with the factory’s motivation to ignore or even hide the problem from you.

The last point on this is that the supplier has to be motivated. China is booming, trade flows are shifting rapidly, inflation is very high in some areas of the country (particularly the south and along the coast). If you’re too small a fish in their pond you’ll get pushed aside in quality and/or delivery. If you’re too big a fish in their pond you’ll be asked to take up their entire inflationary overhead burden in your prices, or corners will be cut in the manufacture of your product. You’ll want to be in the middle of their client base – big enough to have clout but small enough to be sharing only a portion of their overhead. Examine your supplier’s relationship with their suppliers as well, the same issues will apply.

If you have quality professionals on your staff you can navigate these issues as you audit the factory and its suppliers. If not you should use a competent 3PQ. They’ll take care of all the details.