How to reduce your quality control Budget while keeping your risks low?

1. Quality Control In China
How to reduce your quality control budget
while keeping your risks low?

2. Summary
If you import many shipments from China, you are probably wondering how to reduce your QC
inspection budget. How to do it without a sharp increase in quality issues and customer
complaints?
Here are a few tactics that will help you reach your objectives.
1. Require inspectors to check only the strict necessary
1.1 Should they check ALL the product specs?
1.2 Do they need to inspect so many samples?
2. Give more rope to your best suppliers
2.1 Can you reduce the inspection severity?
2.2 Can you skip some lots randomly?
3. Micro-manage your worst suppliers
3.1 Do you ask for re-inspections too systematically?
3.2 Do you check the beginning of production?
4. Last but not least… Work with better suppliers
4.1 Should you select new manufacturers more rigorously?
4.2 Can you invest in the development of your suppliers?

3. 1. Require inspectors to check only the strict necessary
1.1 Should they check ALL the product specs?
Read this page if… you spend more than 1 man-day for certain inspections, and all you need
to check is a few critical points.
If you need the inspector to check only what is critical to you, you should remove certain
checkpoints.
A few examples:
Materials, colors, and general conformity of the product:
If you have already approved some production samples, is it necessary for the inspector to
check ALL details again? Is it enough if he takes some photos?
Complex products:
Send a perfect sample to the inspector, rather than complex written specifications. The
inspector will save time by checking if production looks and works the same as your sample.
Measurements of garments:
Keep only the measurement points that are really essential to fitting. Or check only a few
random sizes in random colors, rather than every size in every color.

4. 1. Require inspectors to check only the strict necessary
1.2 Do they need to inspect so many samples?
Read this page if… you spend more than 1 man-day for certain inspections, and you can
tolerate some quality problems as long as they are on less than 10% of the products.
You probably perform inspections in level II, like most importers. Choosing level I or S-3
means less samples are checked, and you run a higher risk of not detecting quality issues.
However, if you are mostly concerned about very widespread problems, level II is probably
overkill. It is not necessary for confirming that the right components were used, or to check
products that are made by machines.
Let’s take an example.
You place an order for 600 sofas.
If the inspector follows level II, he needs to check 80 pcs, which will take several man-days.
If the inspector follows level S-3, he needs to check 13 pcs, which is doable in 1 man-day.
If these 13 pcs are really drawn randomly, and if they are checked thoroughly, the buyer is
already reducing significantly his risks of receiving products with widespread problems.

5. 2. Give more rope to your best suppliers
2.1 Can you reduce the inspection severity?
Read this page if… you spend more than 1 man-day for certain inspections, and if you have
high confidence in the quality level of certain suppliers.
The ISO 2859-1 standard contains a procedure for switching from normal severity to reduced
severity, when a factory gets to a certain score (a quality control firm can help you calculate it
rigorously). It will allow inspectors to save time by drawing fewer samples.
Let’s take an example.
You place an order for 20,000 pairs of jeans.
If the inspector follows level II in normal severity, he needs to check 315 pairs, which will take
two man-days.
If the inspector switches to reduced severity, he needs to check 125 pairs, which can be done
in 1 man-day.
Let’s take the same example again.
Let’s say that you choose the reduced severity (good factory) AND level I (catch widespread
problems only). The inspector only needs to check 80 pairs.
If you remove 50% of the measurement points, it is possible to inspect 2 different styles of
jeans in 1 man-day!

6. 2. Give more rope to your best suppliers
2.2 Can you skip some lots randomly?
Read this page if… you are tempted to cease inspecting the shipments from certain suppliers
(because they are particularly reliable), and you are looking for a “middle path”.
It is important to maintain the pressure of QC inspections, but do you need to check EVERY
shipment? Not with very good suppliers. Inspecting 50% of the orders, in a random manner, is
a more efficient use of your QC budget.
In which case is this a good idea?
When all the below conditions are respected:
• For repeat orders only (not for the first order of a new product).
• If the factory consistently passes QC inspections.
• If the factory accepts to give you its own QC findings.
• If the factory’s findings always correlate with your inspector’s findings and with your
incoming QC findings.
• If the factory sends a production sample to your office, or to your QC company, and it is
approved.
Naturally, if you choose to skip some lots, you should make sure the plan is announced at the
last moment, and is established randomly.
And you should make it clear that subcontracting is not acceptable without prior acceptance
from your organization.

7. 3. Micro-manage your worst suppliers
3.1 Do you ask for re-inspections too systematically?
Read this page if… you systematically ask for a re-inspection after you refuse a shipment.
What happens when you receive a final inspection report and you refuse the shipment? In
many cases, nothing really helpful. Many buyers conclude that QC is useless.
A very popular strategy among Asian suppliers is to do nothing, and wait until the importer
has no more time to wait (and has to authorize shipment). It means you can conduct 3 or 4
re-inspections, and you’ll always find the same problems.
Here is what we often advise our clients, to make intelligent use of quality control:
1. Ask the supplier to confirm understanding of the problems you don’t accept.
2. Ask the supplier to sort out these problems (try to provide a clear limit between
acceptance and rejection).
3. Ask for the proportions of “good pieces”, of “bad pieces that were reworked”, and of “bad
pieces that can’t be reworked”.
If the supplier’s data are not in line with the inspector’s finding, you need to address the issue
immediately. You need to have a discussion with the supplier, not a re-inspection.
He will want to ship 100% of production, so he will probably claim that everything is
acceptable after his internal verification.

8. 3. Micro-manage your worst suppliers
3.2 Do you check the beginning of production?
Read this page if… you only perform final inspections (before shipment), and you feel that
discovering problems at the last minute is not a solution.
This is the real answer to the problem outlined in part 3.1 (useless re-inspections).
Inspecting quality when the first finished pieces are ready, or even earlier if possible, will allow
you to catch issues when you still have time to react.
Corrective actions can be taken by the manufacturer, and hopefully be confirmed by follow-up
inspections – performed at the supplier’s cost.
The good thing is, the manufacturer is not in a position to refuse corrective actions. You have
time to plan ahead. You can even station someone full-time in the factory if you don’t trust the
manufacturer.
After that, all you need is just final verification before shipment, mainly to confirm quantity and
packaging.
If several orders are to be shipped out together, it might be possible to check them all in one
man-day.

9. 4. Last but not least… Work with better suppliers
4.1 Can you select new manufacturers more rigorously?
Read this page if… you don’t follow any process when selecting new suppliers.
Many importers select suppliers on the basis of a sample and a price. If you work across many
product lines, it might make sense. But if you purchase 1 or 2 product categories, you should
invest some time qualifying new suppliers.
First, you should wonder if a potential supplier is a good fit for your company. Here are a few
considerations:
• How big are they? Do you represent at least 10% of their annual output?
• Do they have experience selling directly to importers in general? And in your country?
• Do they have the right engineering capabilities for new developments?
Second, you should ask for customer references, or look at the shipping marks when you
tour the factory. You should also pay for a background check if you suspect you are dealing
with a middleman posing as a manufacturer.
Third, you should appoint a QC firm to audit each new manufacturing facility before you
approve it.
You need to know if they have the right equipment for your products, if their capacity is
sufficient, and if they have a good quality management system.

10. 4. Last but not least… Work with better suppliers
4.2 Should you invest in the development of your suppliers?
Read this page if… you work regularly with the same suppliers, and they welcome your
suggestions.
There are three ways importers can invest in supplier development.
Train on your expectations
If your requirements are a bit out of the ordinary, the very least you should do is explain them to
the suppliers’ technicians and middle managers (not just the salespeople).
Benefits for you: fewer misunderstandings; fewer quality issues.
Train on reporting QC findings
If you produce regularly in one factory, you should propose to train some of their internal QC
employees (who would exclusively check your orders).
Make sure you work with a professional quality assurance firm, because the technical setup
(what should be checked and how) and the followup after that are extremely important.
Benefits for you: you push the costs of QC down to the manufacturer.
Advise on process improvement
If you have a very good relationship with one key supplier, you they might welcome the
intervention of an engineer for reviewing and improving their processes.
Benefits for you: the factory will produce better quality at lower costs and with fewer delays.

11. Thank you
for reading our advice
Do you have questions?
This book was written by the technical service of Quality Control Partners (QCP). We’ll be happy
to hear about your situation and provide personalized advice.
Presentation of our company
QCP is an inspection & auditing agency, working for importers in Europe and North America.
We offer QC services in China, India, Pakistan, Bangladesh, Indonesia, Vietnam, and Thailand.
Why work with us?
• Reliability first. We only perform services when we can arrange a competent technician, and
we take the time necessary to prepare accurate and clear reports.
• Personalized service. We work hand in hand with our clients and their suppliers to plan
ahead, and we advise what services are in our clients’ best interest.
• Asian presence. We can perform inspections and audits across Asia, to offer the same
seamless experience to our clients wherever they source their products.
Contact information
Quality Control Partners Ltd
Suite 303, East Ocean Ctr, 98 Granville Rd., TST, Kowloon, Hong Kong
Tel: +852 8191 5196 | Email: contact@qualitycontrolpartners.com | Skype: qualitycontrolpartners