Elksourcing:Inspection by Yourself vs. a Professional Inspector

Elksourcing:Inspection by Yourself vs. a Professional Inspector

There’s perhaps no better way to avoid receiving substandard goods than by inspecting them before they leave the factory. Inspection gives you the opportunity to find any problems and have them fixed before you receive the order. And there are a few different ways you can conduct inspection. One way is to personally travel to the factory manufacturing your product and inspect by yourself.

Inspecting on your own can work well for some importers in certain circumstances. But most importers don’t conduct product inspection themselves. Let’s look into the main reasons why inspecting on your own may or may not be your best method of ensuring your product meets your standards.

Why some importers prefer to inspect on their own

There might be several reasons why you’d choose to take it upon yourself to inspect your own product, such as:

You feel since you’re an expert in your product, you’re the best person to inspect it;

You think hiring a professional inspector to visit your supplier’s factory and inspect on your behalf will be too expensive; and

You don’t know what other options you have for checking the goods before shipping.

But as well see later on, these aren’t actually great reasons to perform inspection yourself. There are, however, a couple common advantages of personally going to the factory to inspect:

Inspecting the first order from a new supplier

Some importers find it beneficial to visit a factory to inspect the first order from a new supplier. This gives you the opportunity to meet with contacts at the factory and discuss any product inspection concerns or requirements in person. Some importers, especially those with a lot of experience with their product, will find they can more easily suggest solutions to quality problems by seeing them firsthand in the factory.

Training QC staff on special inspection procedures

Another valid reason for participating in product inspection yourself is to train inspection staff. Whether you’re relying on factory QC staff or hiring third-party inspectors, it can be helpful to observe the inspection process and provide feedback on-site. For example, you may want the inspector to use a testing procedure or standard other than the one they might typically use. And although not always necessary, it may help to explain the procedure to them directly.

Why most importers choose to hire someone locally to perform inspection

You may be tempted to visit your supplier’s factory to inspect each order before it ships. But most importers don’t conduct product inspection themselves. Instead they often prefer to hire someone else to inspect locally on their behalf. In doing so, they typically benefit from three main advantages:

1) Cost & time savings

Costs can add up quickly when traveling to a foreign country to visit a factory. Transportation, hotels, meals, gifts and translators are all potential expenses you’re likely to incur when traveling to inspect on your own. Inspections performed inefficiently can raise costs as well.

Aside from financial costs, time spent traveling and checking the product is another factor to consider for inspection. For example, an importer traveling from New York to Shenzhen, China would likely board a 13 or 14-hour flight to Hong Kong. Then they’d need to cross the border to Shenzhen and arrange transportation to the factory. Add in the time needed to inspect and return home and you’ll basically be occupied for a few days to a week.

Hiring a professional inspector to visit the factory for you reduces these costs significantly because the inspector is typically locally-based or at least resides in the same country where the factory is located. You might spend one or two thousand dollars traveling to and returning from China. But you’d spend much less time and money by hiring someone in China to visit the factory and inspect your goods. You’d simply arrange the inspection and wait for their report.

2) Professional experience with product QC

Some importers think that being an expert in a product makes them the best person to inspect that product. But unless they have a strong background in product quality control, it usually doesn’t make sense for importers to personally inspect their products every time.

Properly inspecting a product requires knowledge that someone only familiar with the product design or requirements may lack. For example, importers often don’t know how to effectively pull random samples or use an acceptable quality level (AQL) that yields the most transparency. They may also be unfamiliar with the types of on-site testing recommended or required for their product.

But experienced product inspectors generally do have the relevant knowledge. And importers can often hire inspectors with experience in their specific product type, such as electronics products, cutlery or electrical appliances.

3) Improved communication with suppliers

The last issue with inspecting on your own is sometimes overlooked but quickly realized –communication challenges. Communication can be difficult even when you speak the same language as your supplier and their factory personnel. There are a few potential reasons for this:

Sales staff often lack technical knowledge

You might find it difficult to communicate with a supplier if you’re talking to a salesperson with limited technical knowledge.

The salesperson is often responsible for relaying vital information to the production manager in the factory. Important product details, such as dimensions, tolerances, requirements for parts & materials and others could be lost in communication. The problem could be more complicated if your supplier is a trading company located in one city, while the factory actually making your product is in another.

By hiring someone locally to visit the factory for inspection, you can typically rely on that person to communicate issues with factory staff. They can help you clarify product requirements and other misunderstandings that often arise between importers and their overseas suppliers.

Misunderstandings caused by cultural differences

It may seem that cultural differences can only lead to harmless missteps in etiquette. But a lot of importers find cultural differences to be a real challenge to their success.

In East Asia, one of the main issues you’re likely to encounter with suppliers is their reluctance to deliver bad news. Suppliers here often want to avoid confrontation or disappointing a customer. So instead of telling an importer directly that their order will be delayed, for example, they often wait until the importer discovers this on their own.

Another example of cultural differences that can lead to problems is the concept of saving “face”, which can make some people reluctant to admit when they don’t fully understand something. A fear of seeming incompetent can keep some suppliers from asking important questions or asking you to clarify aspects of your order. Hiring a local inspector to visit the factory can help limit this and other communication problems.

Conclusion

Every importer is different. What works well for one might not work for another. Across the variety of importers, some may feel personally inspecting is the best way to handle their product QC. And it can be, particularly when dealing with a new supplier.

But generally, importers don’t conduct product inspection themselves. They realize the value of hiring professionals to handle most of their inspections. Not only is it more convenient, but it usually saves money and time when compared to personally inspecting each order. It also takes away the hassle of travel and eliminates any chance you’ll miss any defects for lack of inspection experience.

Elksourcing:Tips for Managing Your International Trade Business

Running an import-export business can be complicated and laced with risks, especially if yours is a small company. Here are some tips for managing those risks and keeping your international trade thriving.

1. Stay Organized

Sending and receiving invoices over email can be onerous when you use your email accounts for multiple purposes. Using an online payments network keeps all of your payments administration and communication in one separate place, with the added benefit of working seamlessly across borders.

2. …But Flexible

Working with numerous clients and suppliers internationally can also mean encountering and managing different cultures and preferences in doing business and completing transactions. It’s important to stay adaptable, and to work with clients regarding their preferred methods of delivery and payment, in order to avoid damaging relationships that are important to your company’s success.

3. Minimize Currency Risks

There are many organizations that support selling services, products or talent overseas. With advance payment platforms, you can choose the currency you would like each invoice to be paid in, and also the timing of your payment, managing the risk that exchange rates may swing out of your favor.

4. Manage Credit Risks

Effective credit management can help your company stay competitive. Work with banks and try to find the good financing options.

5. Keep the Cash Flowing

If you’re exporting, you may wish to receive payment before parting with a lot of valuable product. When we facilitate the payment of an invoice, we take on all the risk of late- or non-payment on that transaction.

Elksourcing:Why Do You Need a Purchasing Agent in China?

A good Purchasing Agent plays a very important role in doing business in China, especially when you’re placing a large order: Sourcing and Verifying suppliers, Quality Control, Loading Process Supervision, Goods Consolidation, Shipping Coordination, Business Risk Control, Legal Contract Support and After-sale service.

What is a purchasing agent and why do you need one?

A purchasing agent could be an individual, a group of team or a company, helping companies overseas to import from China. Usually it will be supported by a team of experts in each field: sourcing, verification, order processing, quality control, etc. A good agent can be an extremely valuable asset in your overall product procurement strategy. Here are the main services offered by your qualified China purchasing agent:

I. Keep finding new products and suppliers.

II. Verify, inspect or audit existing suppliers.

III. Price negotiations and Supply Chain Management.

IV. Order processing.

V. Quality Control.

VI. Loading Supervision.

VII. Shipping Coordination and Customs Clearance Support.

Any other service, say, legal contract support, after-sale service support, etc, can be available upon request.

Dealing with Chinese suppliers is very time consuming. Working with a qualified Purchasing Agent can save you much time, cost and energy in China. For example, 90% of the suppliers you met online or at local trade fairs could be trade companies, while the local sourcing specialists can go to the real manufacturing bases to find out qualified factories for you. Apparently the factory price is much more competitive than that of the trader’s anywhere on the globe, by this way you can save more cost in the business.

How to choose a right sourcing agent from China?

I. Ask them for at least 3 client references from your country.

Check them out before any cooperation. Trust is very important, especially for long term cooperation.

II. Choose a right purchasing agent who is near to the manufacturing base of your industry.

In China, almost every city has their pillar industry and each product has one or several manufacturing bases. For example, if you’re buying Fireworks, you can simply go to Liuyang city, which is called ‘Home of Fireworks’ or ‘Capital of Fireworks’, where there are more than 400,000 people directly or indirectly engaging in this business in China. ‘Liuyang-made’ fireworks account for 70% of China market and 50% of global market at present. Another two famous manufacturing bases for this product is Liling, Hunan and Wanzai, Jiangxi, these three manufacturing bases are near to each other. This is the same situation to most of the other products in China. Your agent’s proximity to a certain industrial cluster can certainly help out when things go wrong during production. It may also cut traveling and transportation costs.

III. Ask them for their Business License in China, check them out with local officials or third-party verification service company first before formal cooperation.

IV. Ask them enough professional questions regarding the coming orders in China. Many sourcing agents are lacking expertise about product safety regulations in overseas markets. Keep in mind that in the end, you are going to be hold financially responsible if your products turn out to be non-compliant with the relevant standards.

Importing from China can be a completely different story depending on the product. Certain products are very complicated (i.e. machinery) while others are a fairly easy to get right (i.e. indoor furniture). Hiring a sourcing agent with the right product knowledge is critical and can make the difference between a successful business transaction and a complete disaster.

Elksourcing:Focus on 10 Points to Minimize China Sourcing Issues

Sourcing from China can be a good way to improve your business, but it certainly is not easy. There are countless scenarios where a supplier can end up disappointing a buyer, many of which I have experienced first-hand. So, I’ve put together 10 points on how to minimize sourcing issues and guide your China sourcing endeavors.

1) Market Analysis – Purchase negotiation is not just a simple task and often requires thorough analysis of the supplying market. This type of market analysis does not only include cost data collection, previous project experience, price variance, and product quality, but also includes the analysis of the material market and macro-economic situations. By analyzing the market in this manner, you can help place yourself in a better position to learn and take advantage of the entire purchasing life cycle and to minimize sourcing issues.

2) Supplier Competition This can be the buyers’ trump card. Sending out invitations to bid for services is a good way to promote competition among suppliers and can also help you select the most compatible supplier. Please be advised to keep your methods of choosing suppliers scientific, fair and open.

3) Centralized Purchasing Centralized purchasing can have many advantages. It can help you efficiently control inventory, pool bulk purchases into discounts, plan consolidated transportation loads to lower costs, and strengthen relationships with suppliers.

4) Strategic AlliancesThings will be easier if everyone was on the same boat. Competitive integration can be a good method to achieve a win-win situation for all parties. Sometimes, it is more beneficial for an importer to build a relationship with manufacturers and work in conjunction with each other, rather than simply buying and selling. In this type of situation, a supplier is no longer focusing on trade as a top priority; instead, they will be considering how a joint venture will be beneficial to each other’s strategies.

5) Develop a strong budget and plan for sourcing In any instance where sourcing or logistics is involved, it is critical to properly plan for all stages of the supply chain life cycle and to budget for any unforeseen risks, which can also help minimize sourcing issues. The China market may present various situations that call for last minute changes or orders, so it is wise to budget accordingly.

6) Review the purchase order and complete all agreement clauses It is very important to review your purchase order and agreement clauses with your suppliers. This will ensure that your final purchased goods did not deviate from what the suppliers and manufacturers were originally tasked to develop.

7) Follow up closely on your ordersPeriodic monitoring and maintenance of contracted goods can help keep contracted work and products stay aligned with what you originally intended and to ensure timely delivery.

8) Send your inspector to the factory to perform quality checks and push production if needed Utilizing your quality inspector can greatly affect final products made from factories in China since inspectors are professionally trained to perform key quality checks and keep the factory moving with production. Therefore, it is critical to carefully perform on-site visual inspections of your orders from China.

9) Pay careful attention when selecting and rating suppliers This can be a crucial step in your China sourcing life cycle, which can help minimize sourcing issues before they occur. It is important to perform preliminary research before choosing a factory to produce your goods. One way of looking for reliable suppliers is to review on popular business directories that list factories in order to obtain detailed information.

10) Have a backup factory just in caseHaving a backup factory can be very helpful in emergency situations. There may come a time when factories may face unforeseen production challenges or issues and you may need to move forward with your goods. In this instance, having a backup can help continue your production process without taking a big hit on delivery issues or product quality.

By using the 10 tips listed above, you should be able to get a good start (or improvement) with your sourcing process. Preventing a problem from occurring in the first place, will almost always save you time, money, and aggravation.

Elksourcing:Order Follow Up 5 Lists to Check

As soon as a purchase order is signed with a factory, an important next step is to engage in order follow up. This is to ensure that your suppliers are in line to produce the correct product, level of quality, special requests, shipment dates, etc. However, there can be many issues that you may encounter while performing order follow up. Here is a quick list of issues that you may find and hopefully avoid, to make sure everything in your order is correct.

1) Find that the product details the factory is using are incorrect. If you identify an issue with the product details too late in the process (either during production or after) it can be a very serious problem. An example would be if the factory had the wrong requested sizes for products that they needed to produce. This can be a burdensome task to fix, especially if production has started and it most likely would cost a lot of money to correct. In order to avoid this problem, it is important that both the buyer and supplier carefully review the purchase order package in its entirety.

2) Find out that there was a misunderstanding on your order possibly due to language barriers. Since English usually is not a factory’s native language, there could still be a possibility that misunderstanding/miscommunication could arise during the order phase. In order to avoid the problem, the buyer should use plain direct English for both oral and writing. It is important to be clear and direct and to confirm your intended order outcome multiple times.

3) Find out that there were unexpected operation issues. Sometimes you will find that factories may run into problems with assembly or operation with machinery, which can affect your purchase order. It is important to keep up with your factory’s status during order follow ups since unexpected operation issues can impact order quality and delivery dates. In order to avoid the problem, you should always perform order follow ups and to also have backup factories in case you need to have a product that needs to be shipped out by a specific deadline.

4) Find out that quality inspection was not executed properly or adequately. Quality issues, such as quality degradation can occur with certain factories, so it is important to identify these issues quickly while inquiring about order follow ups. Issues with quality can be a hassle to correct and you can avoid paying larger costs or delaying your orders by sending out QC experts to inspect your orders.

5) Find out that shipping documents are not filled out completely or correctly. It is always important to review shipping details during your order follow ups. Shipping dates and confirmation information can easily be misunderstood, so it is recommended to continually confirm shipment dates if possible.

Performing order follow ups is not only a necessary step, but it will enable you to identify and mitigate issues as soon as they occur. Although there could be other types of issues or extenuating circumstances that may arise in your order follow up experiences, this should still provide a general idea of the types of issues that many others encounter. It is just a matter of quickly identifying and correcting these issues during order follow ups that can truly make the difference in your final purchase orders.

Elksourcing:China Quality Control Inspection and Testing

In China, it can be difficult to find suppliers who pay as close attention to quality as you do, or as you expect them to do. You can imagine how costly it is when quality issues occur with your orders. For those of you buying directly from the factory, here are three general tips to help you prevent quality control issues.

1. Fully Understand your Products Quality Requirements:

Don’t rely on the factory to advise you on what is important for quality. Have a complete understanding of your product and the quality needs, especially for the market you intend to import to. Have a document made for the quality criteria so that you can have an inspection done according to your requirements.

2. Perform Third Party Inspection:

Though your factory will have its internal quality control, it is important and necessary to perform third party inspections. As you may know, there are countless companies that can help you perform authorized inspections on all kinds of products. Look for a company with a track record and experience with your item. These companies should have the necessary equipment and trained professionals to ensure quality standards for your products. If you are working through an agent, they may also be able to conduct a third party inspection or find a reliable company to subcontract to.

3. Conduct Testing at a Trustworthy Lab:

Depending on your product and the requirements of the country you are importing into, you may need to conduct testing on your product and get certification.

At the lab, very detailed testing will be conducted, for example material composition, reactivity to chemicals, flame resistance, etc. However, this method is typically contingent upon suppliers sending samples to the laboratory for testing, the disadvantage is that suppliers can choose to only submit high quality samples for testing, or specially “make” a sample for testing, which would not help identify quality issues with the final delivered products. So lab testing is a great complement to the third party inspection, but not a replacement.

If the testing is very important, suggest you use a trustworthy quality control company to pick up samples on your behalf.

A complete quality control process is very detailed and complex. With a good understanding of your products, your options for third party inspections and testing, you are on your way to a good start.

Elksourcing:How to Avoid Delays with Chinese Manufacturers?

Dealing with a delay in production with shipping and delivery deadlines can be stressful, and the causes of these delays can seem too numerous to effectively protect yourself against. However, there are usually recurring causes for these delays which makes it possible to identify them ahead of time and take steps to help avoid the delays with your order.

Reasons for Delay:

The production line is too busy – This often happens with China manufacturers at the end of the year due to the Western holiday season.

A quality issue arises during inspection – The result is that a partial or full reproduction is needed.

Inadequate labor force – This is often due to laborers having to leave for their hometowns for seasonal harvests, or for Chinese New Year.

Factory has been outsourcing production – Some factories will outsource part or even all of the work for various reasons. A delay with the subcontractor can delay the entire production.

Customs inspections – If there are issues with customs, delays can be a week or longer.

Transshipment complications – Sometimes when transshipment is needed, it is not uncommon to encounter problems such as container rejection due to a lack of space in the vessel.

It is important to note that your production could be vulnerable to any of these problems throughout the sourcing process. Good planning, a strong knowledge of the product itself, and close cooperation between all the parties involved in the project are necessary to avoid issues with your sourcing project. Follow the tips below to further minimize your risk of delays.

Solutions and Preparation:

Have a complete understanding of your product – This includes the production procedures and requirements. Do you know how long it should take to finish each step in the production process? With this information you can put in the appropriate tracking procedures. These types of processes will help you keep track of your production and to make sure that the factory is doing the same.

What are the capabilities of your factory? Is it a large factory or a small one? Is it always available? What is its production schedule? Clients’ requirements should always be satisfied, but are your orders being prioritized according to your expectations? Make sure you are performing thorough and frequent factory audits of your suppliers.

Be familiar with the time the sea freight takes – If the goods are loaded at an inland port first, 7-10 additional days should be factored in before they arrive at the main port of departure.

Does your supplier outsource any part of the production? How responsive is this secondary supplier? Try and make sure you have control and are informed about all aspects of your supply chain. This is another area where factory audits are crucial for delay prevention.

Finalize the delivery date for regular orders – Have a specific delivery date for each order and make sure it is clearly expressed in writing to all parties what the consequences are in the event of a delayed delivery.

Consolidating orders? If you plan on consolidating shipments to save on costs, consider the extra time that will be needed for the logistics of doing this. If Full Container Load (FCL) shipping is required for your shipment, how long will it take to consolidate the various orders?

Plan for mistakes if possible – When making an official order, try to set your delivery date at least two weeks before the products are actually needed. However, keep in mind that this means you will also have to arrange storage. Evaluate if the cost of storage is worth the peace of mind of a two-week safety net.

Factories Prefer to Work Last Minute

Though it may seem unfair to the buyer, suppliers often plan to finish the packaging of goods 2 to 3 days before the scheduled loading time. This means there is no room for error if an issue arises, which they often do. In some cases, even with as much as a four-month lead-time, an unmonitored factory can end up behind schedule, since factories will rarely start on an order immediately upon receiving it. You can minimize your order delays by following the tips mentioned here and, most importantly, keeping close communication with your factory while tracking the status of your order during production.

Elksourcing:How to Prevent Quality Degradation?

Quality degradation is a supplier’s behavior of progressively degrading the quality of the products to earn more profits, at beginning, it’s not easy to be noticed; but when later on a significant quality degradation is found by the buyer, disputes may arise between the buyer and the supplier, which can ultimately lead to termination of agreements.

Why does quality degradation occur?

The most important reasons include:

1. Issues concerning business ethics

Business is business. Naturally, a businessman’s end goal is to pursue high profit margins. If you do not investigate your suppliers carefully prior to engaging in trade, you may experience issues with certain suppliers beginning to degrade quality little by little over time in order to lower its costs.

2. Disconnection between quality levels of supplier and buyer

Buyers can sometimes forget to specify clear levels of desired quality in their quality specifications. Additionally, suppliers tend to sway more to the side of providing final products at their lowest cost. This may cause an issue between intended quality levels of the buyer and the final quality levels of products produced by the supplier.

3. Difficulty of controlling overseas suppliers

Some quality degradation can be found in the production process; however, catching subtle quality degradation can be difficult if you are located thousands of miles away. These issues are hardly monitored from far way in such detail. Having awareness that factories may participate in quality degradation can help you stay on top of issues that may occur later on.

Can the quality degradation be avoided?

We believe this problem can be avoided, if the importer focuses on the following:

1. Select a reliable factory

Perform a factory audit and investigate the factory carefully before placing an order. This can help in finding a reliable factory to work with. To find a factory with integrity also means you will save that much more time and money in the future.

2. Have backup suppliers

When you have an alternative suppler, your primary supplier will worry about being replaced and could put in more effort to pay attention to quality if they value your business.

3. Set up quality control system

Even if suppliers have quality control staff in place, their products may still experience issues with quality. An in-production or pre-shipment quality control should be performed by your company’s representative or from a professional third party. A trustworthy third party company can help you with various aspects of your China sourcing endeavors, including factory audit, pre-production monitoring, in-production monitoring, pre-shipment inspection, etc.

Quality degradation is an issue that can happen to anybody. It is important to always make sure you have effective quality control procedures in place.