This month, an (article) of Asia Inspection confirmed that about 30-40% of the quality inspections in China fail.
(source: Asia Inspection)
There are multiple reasons for these failures:
- Part(s) missing in the assembly
- Scratches or poor workmanship
- Mistakes on the subparts, for example material or color
- Packaging marking not according to regulation
Many of the clients who come to SAOS underestimate the importance of doing quality inspections. I propose we do a quick calculation, based on a recent business case, to illustrate the risks of not doing quality inspection on your shipment.
Let’s consider a high end scissor shipment. The client had defined, with our help, the quality standard through a specification checklist. This checklist has been used as a reference during the inspection. The order we are talking about equalled approximately $10,000 for 5,000 scissors. During inspection, the inspectors discovered that 80% of the products had unacceptable scratches. After this discovery, we arranged that all the faulty parts were reworked by the supplier, within one week and without extra costs.
Without inspection, the goods would have been shipped and the client would had to incur the following costs:
- Shipping cost for the 80% defective parts
- Sorting out the defective parts at the client’s warehouse (he would basically do his
own inspection)
- Scrapping those 80% defective parts, or sell them with a large discount
- Potential damage to the client’s brand, claims and product returns
When dealing with Chinese suppliers it should be considered that, in most cases, it is very difficult to claim your products back and get them replaced once the products have been shipped. Most of the times, buyers will be offered a discount on the next order by the manufacturer.
While an average quality inspection only costs around $300, this client would have lost more than $8,000 without inspection.
The fact that 30% of inspections fails, shows that inspections are beneficial to have once the order is over $1,000. In other words, when the order is above $1,000, the inspection is no longer a cost but a saving.
Some buyers are afraid about the long-term costs when working with the suppliers on their production with a robust quality control process. However, there are various ways to keep your quality under control. More information about the various types of quality inspections can be found here.
