The best defense against quality defects is prevention. And the most crucial time to prevent product defects is when beginning your sourcing journey, as you filter potential suppliers. Let’s look at the various steps you can take at the start of your relationship with a new supplier to limit your chances of finding unacceptable quality defects later.
1. How to prevent product defects when negotiating with suppliers?
Nearly every importer has had to deal with product defects in their shipments at one time or another. Defects are an inescapable reality of manufacturing—no factory is perfect of the time. But that doesn’t mean you should resign yourself to poor quality products from your suppliers. Preventing a quality defect when first beginning the supplier relationship is almost always far easier and cheaper than trying to correct it after it appears.
When it comes to factories’ production capabilities in Asia, not all factories are created equal. Some factories are high-tech powerhouses on par with innovative manufacturers in Germany or the United States. Others are small and simple operations that may rely on sub-suppliers to manufacture most parts of your product. Every importer’s manufacturing needs are different. But regardless of your own quality standards, it’s essential to begin the conversation about your expectations before choosing to work with any particular supplier.
2. Be upfront about order volume
Importers sometimes promise large and frequent orders when searching for prospective suppliers, even when they have no intention of following through on that promise. They often think this overpromising will convince suppliers to work with them, offer more competitive pricing or pay more attention to their product quality over that of other buyers.
But in truth, this kind of misleading doesn’t set a good foundation for a strong relationship between the factory and buyer. Suppliers hear overpromising all the time. Most receive countless requests from importers who paint an optimistic picture of a steady flow of business for them. And for the suppliers who believe you, your early dishonesty will likely hurt your supplier relationship. That supplier is more likely to deceive you about their own deliverables and their willingness and ability to meet your quality requirements.
Rather than just telling the factory what you suspect they want to hear, suppliers usually appreciate it if you’re upfront about your order volume from the. Honesty tends to be reciprocated in supplier relationships, and this honesty typically extends to the quality of your product.
3. Don’t haggle too hard on price with suppliers
One of the main deciding factors for most importers’ in choosing a supplier to manufacture their product abroad is cost. They want lower production costs offering higher profit margins. And importers have come to expect lower costs, especially lower wages, in many Asian countries. But if you expect higher quality products, you have to be willing to pay for them.
When haggling on pricing with your supplier, tunnel vision can be your worst enemy. Focusing on getting the lowest price can have severe implications for your order’s overall quality. Suppliers need to make money too. And your supplier needs a decent profit margin to continue operating. If you push for a low price, they’ll need to make cuts somewhere to ensure those margins are healthy enough.
4. Offer suppliers a target price to set your standards early
One way you can avoid the challenges posed by trying to balance quality and price is by offering suppliers a target price directly. Some importers think this will hinder their opportunities to reach a lower price. But a target price actually helps you to set expectations from the very beginning regarding product quality and requirements. The price you mention should reflect the quality of input materials and components you want and will helps prevent suppliers from cutting corners with product quality.
If you’re unsure of the appropriate price for your order, you can use several methods to get an idea as to what is acceptable to pay.
When you’re honest about your order volume and desired price, you might actually find a supplier that refuses your business. This might seem like a huge step back in your sourcing process, but it could actually be a sign of an honest supplier that knows they probably can’t meet your standards. And that allows you to find another supplier that can actually provide what you want at your desired price and quality level.
5. Auditing a prospective supplier’s factory to avoid quality problems
Auditing a prospective supplier’s factory is often the final step in deciding on a sourcing partner. There are many types of audits that provide the importer with a variety of insights into a factory’s operations. For example, factory quality audits ensure quality system are well managed for the production. And social compliance audits help you confirm whether a factory complies with local labor laws.
Conclusion
Preventing product defects through negotiating with suppliers saves importers a tremendous amount of time and money in trying to fix these issues after production. But preventing defects shouldn’t be a one-time process you only consider when first choosing a supplier.
In following these steps during the sourcing process, you can also avoid mistakes that are damaging to your relationship with your supplier. You can continuously build on a strong supplier relationship to set high quality standards for your product and minimize quality defects over time. And with higher product quality, you can boost your reputation with your customers and set your business apart from manufacturers who fail to comprehensively monitor product quality.
