Tuesday, September 16, 2008

How to Ensure Quality in China

With all the recent news about more problems with baby formula in China, I am going to touch again on the number one issue US companies ask about regarding imports from China - quality.

Quality is an issue with suppliers no matter where they are. The same things that help ensure quality from suppliers in the US will greatly help with suppliers from China. First, have excellent specifications and update them as needed. Second, build a relationship with your suppliers so there is a shared value on and understanding of expected and required quality levels.

Because the supply chain is much longer (in miles and in terms of culture) when dealing with Chinese suppliers, there are other actions US companies can take to ensure quality. First, have a consistent physical presence at your suppliers. OPSA fills that role for our customers. Second, perform extra quality inspections during production and before shipment. OSPA does this for our clients and there are several third party quality control firms (3PQ's) that focus only on performing inspections and audits. Larger US companies that source significantly from China maintain there own offices there and have QC staff on payroll.

Supply contracts also can help, but some companies fail to take care of the issues above because their contract gives them a false sense of security. At OPSA we've begun using contracts more extensively. They are becoming more useful in China.

In summary, no action can guarantee quality from any supplier. It's all about reducing the risk of quality problems. I strongly suggest communicating clearly and often, building relationships, and verifying quality. With regard to the last point, Ronald Regan's famous quote comes to mind - "Trust but verify".

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