Elksourcing：Can Factories Benefit from Improved Quality?

For factories, quality is somewhat double-edged sword. On one hand they would like to provide the best product possible to their customers, however doing so increases their cost. If they try to “cut corners” and deliver product that does not quite stand up to the scrutiny of demanding customers, they can reduce their initial cost, however they stand to lose customers in the long run by doing so. 

What are the factories supposed to do? My view is higher cost of improved quality is well worth the benefits you can received in the long-term. 

Manufacturers need to look at the tradeoff between cost and benefit of quality from the long-term and comprehensive perspective. Sure, aiming for higher quality will add to the cost in the short-term. You can even lose some money in the beginning. But you need to broaden the horizon and consider all other aspects of the business and understand how improved quality helps improve your business.

Improved customer satisfaction 

Higher customer satisfaction is one of the most important benefits of manufacturing and selling high quality products. How many times have you bought a product that breaks down quickly? Would you go back to the same manufacturer for that product? Of course not! Your customer satisfaction will remain high with higher quality which will lead to repeat customers, and even more customers when those satisfied customers will recommend your business to their colleagues.

Higher selling price 

Manufacturers are able to command higher price for their products if they can maintain the quality of their product. As I mentioned in earlier section. High quality product will lead to higher customer satisfaction and those highly satisfied customers will be willing to pay extra to have peace of mind. In many cases, you can more than make up the higher cost of quality by commanding higher price for your products.

Reduced rework cost 

Another important benefit of high quality is reduction in manufacturing cost by not having to rework the defective parts. If you can manufacture the high quality parts, for example stainless process piping, from the beginning it will lead to better products and you will not have to go back to repairing the parts that are defective. It is even more expensive to repair those parts if you fail to find the defect in your manufacturing plant and if they are sent back by customers. You will end up paying for the shipping cost as well in this case.

Reduced wastage 

Focusing on high quality from the beginning will help you reduce the wastage of parts and raw material. Many manufacturers end up throwing away defective parts because they are not repairable. This ultimately leads to higher overall cost including manufacturing and raw material. Eliminating this waste and overhead will lead to higher profit.

As you can see when it comes to quality it is not quite black and white. You can benefit in the long-term by incurring little bit of higher cost.

Elksourcing：How to Minimize Quality Fade during China Sourcing?

When you’re manufacturing in China, it’s easy to turn your attention away from suppliers and settle into complacency. But the eventual consequence is often product returns, due to what’s called quality fade. From critical issues to small and innocuous ones, quality fade can lead to problems in any importer’s supply chain.

What is “quality fade”?

Quality fade is a gradual decline in product quality over time. In most cases, for any given product, customers aren’t likely to notice a small decline in quality from one shipment to the next. But when comparing units over a longer stretch of time, like from one year to the next, the drop in quality is more obvious.

Many experienced importers have their own horror stories about frustrating instances of quality fade. Maybe you’re a long-time dress shoe importer who starts receiving more and more reports of your shoes creasing or showing other signs of wear after minimal use. Or maybe you import jewelry and find the purity of silver in your charm bracelets has diminished over time.

Typically, quality fade starts when an immediate supplier or sub-supplier deliberately uses a lower quality material or component than initially agreed upon. The overall product might look generally the same, but suddenly you start noticing issues with a particular aspect of the product.

Why does quality fade happen to importers?

As in any business, suppliers are always looking for ways to grow margins. Many suppliers would rather cut internal costs than raise their prices and risk losing customers. Using lower-cost components and materials in production is a common way they can cut costs. Not surprisingly, trading premium components and materials for cheaper ones often comes with an equal tradeoff in quality.

What you can do to minimize quality fade in your products

Quality fade can seem like an ironic cruel twist of fate. Setting quality standards for your products can be hard enough when first vetting suppliers.

1. Maintain a current QC checklist for your product

A well maintained and up-to-date QC checklist for your product is one of the key documents for any importer in preventing quality fade. A QC checklist serves two primary purposes, including: outlining the quality standards and product requirements that the supplier needs to meet during production; and providing an objective standard for QC staff to check your product during inspection.

2. Routinely inspect goods before shipment

Routine inspections are one of the best ways to catch defects ahead of shipment and verify product quality. Whether you’re using a third-party QC company, full time inspection personnel or you’re traveling to inspect personally, pre-shipment inspections safeguard you and your customers against receiving substandard products.

3. Check raw materials with incoming quality control

If you’ve had issues with raw materials or components in prior shipments, you might want to consider incoming quality control (IQC). During incoming quality control, inspectors check raw materials or components prior to mass production through pre-production inspection or lab testing.

4. Lab testing to check composition, performance and safety of product

Lab testing is sometimes the only definite way to verify the composition, safety and performance of materials and parts used in your product. Product inspectors can check materials by sight and feel on-site at your factory.

5. Establish accountability for failure to meet quality expectations

Lastly, the link that holds together all of the systems set up to catch potential quality fade is accountability. It’s vital to establish accountability for quality issues to encourage factories to meet your standards, as well as protect your business if issues arise.

Conclusion

No importer is safe from quality issues in their product, nor disagreements with their supplier. No matter how long you’ve been importing, you should always provide clear and objective specifications for your product and continually compare your supplier’s production to that standard.

Always remember that you usually receive the quality you pay for. It’s very difficult to get high product quality at a dirt-cheap price. So, it could be worthwhile to pay a slightly higher price if it will safeguard your relationship with a supplier and dissuade them from taking quality short cuts.

When quality fade hits you, it can catch your business and your customers off guard and cause mass product returns and recalls. However, with continual attention to detail, you can stay ahead of your supplier and catch quality issues before they reach your customers. And with clear communication on accountability, hopefully, you can incentivize your supplier against cutting corners again without your consent.

Elksourcing：Quality Mistakes for Importers of Consumer Products

As an importer, quality issues with your product can be the downfall of your business, even if you have a great product idea, a competitive marketing strategy and an enthusiastic customer base. They can lead to product returns, product recalls, bad product reviews and a damaged reputation for your brand. Any of these issues can lead customers to look to your competitors for a similar product instead of buying from you.

1. Omitting quality expectations from supplier negotiations

Would you wait until Christmas Eve to tell your friend you expect them to cook the main course for a Christmas dinner for 10 people? Probably not. So why should you wait to tell your factory about your quality standards until production is already underway for an order of hundreds or even thousands of units? The most successful importers outline their quality standards in the negotiation phase when they’re choosing suppliers. This means before they set a price, place their order and issue a purchase order.

1). Set a price that reflects your desired quality level

The old saying, “you get what you pay for” applies to working with overseas factories just as it does any other situation. A low price usually corresponds with lower product quality.

2). Ensure quality requirements are reasonable and feasible for your supplier

Setting an unreasonably low price for your order is one concern. Another is setting unreasonably high standards for your supplier. For example, a rookie furniture importer might expect their finished goods to have zero quality defects, which is virtually unheard of for consumer products, let alone furniture.

3). Set expectations for accountability to pre-shipment inspection results

Some importers place an order with a supplier and then announce later during production that they want pre-shipment inspection. This can create problems if the supplier resists your requests for inspection, which is more likely when hiring an independent third party to inspect.

2. Proceeding with mass production without first reviewing and approving a product sample

Product samples, sometimes referred to as “golden” samples, can be invaluable in ensuring your supplier understands your requirements. They reflect your supplier’s understanding of what you want, so they’re a great way to ensure your product requirements are clear.

1). Identify quality defects in product samples before production

Ideally, there should be zero quality issues in your golden sample. Golden samples are intended to be near-perfect representations of your desired product. They should be comparison models that factory staff and inspectors can check against production units for conformance to your requirements.

2). Clarify product requirements with a product sample to avoid further misunderstandings

Don’t assume factory staff will immediately understand your written specifications in a PO or quality document. Sometimes a misunderstanding can pop up where you never expected due to a language or cultural barrier.

3. Forgoing quality inspection before shipment

Quality inspection is one of your best options for catching quality issues before your products are loaded onto a ship. If you wait to address product defects after receiving your shipment, you could be stuck with thousands of dollars’ worth of unsellable goods. Whereas you can save significant money in wasted product by inspecting your goods and finding and addressing any problems before shipping.

Hire inspectors that put your interests first. A pre-shipment inspection is the bare minimum for importers in the consumer goods industry who want to compete in their market with quality goods. In contrast to internal QC, external inspectors can use your QC documents to check your products according to your standards and report on all quality issues found in the inspected sample.

4. Using outdated QC documents as a guide for production and inspection

Have you ever heard the popular saying, “Insanity is doing the same thing over and over and expecting different results”?

When quality problems repeatedly slip through inspection, it’s often because factory and inspection staff continue to refer to the same outdated QC documents. You can’t just assume your supplier will adjust production processes or quality standards based on previous orders. Instead, you’ll need to continually update QC documents to reflect any known quality issues and changes to your product.

Conclusion

If you’re waiting to discuss your quality standards with your suppliers until production begins, you might already be fighting a losing battle. And if you wait to fix issues when you find quality defects after production is finished, you’re already playing catch up. But worst of all, if you wait to address quality issues after you receive defective goods, any corrective actions will likely be difficult and very expensive.