But as many buyers realize, quality and other standards compliance can be a major problem. A
segment of the television show "60 Minutes" that aired March 1,
revealed a surprising discovery linked to a national flooring chain and
the largest retailer of hardwood flooring in North America. The
report revealed the company has been selling laminate flooring
manufactured in China that contained high levels of formaldehyde, a
known carcinogen. Some tested samples allegedly contained as much as 13 times formaldehyde emissions limits set by California. Where did the retailer goes wrong? And how can you control the quality to your Chinese manufacturer?
In recent years, China seems to have attracted the reputation of a country that manufactures products, the cheap lower quality. But the experienced buyer knows that many Chinese suppliers are also able to produce products of superior quality, but often at a higher cost. So how can you discern the quality of the cheaper suppliers, and how can you ensure that they continually produce your standards?
Before you place an order with a Chinese manufacturer, there are some steps that you should take to set expectations.
In recent years, China seems to have attracted the reputation of a country that manufactures products, the cheap lower quality. But the experienced buyer knows that many Chinese suppliers are also able to produce products of superior quality, but often at a higher cost. So how can you discern the quality of the cheaper suppliers, and how can you ensure that they continually produce your standards?
Before you place an order with a Chinese manufacturer, there are some steps that you should take to set expectations.
Audit The Chinese manufacturer
The best way to get an idea of the ability of a supplier to manufacture your product is going to the factory, or hire a professional third party and perform an audit. Factory audits are usually conducted on the basis of ISO 9001 management internationally recognized quality. A professional audit of this kind should be able to answer many pertinent questions, including:
Making a professional audit of a Chinese manufacturer allows you to reliably determine if you work with a qualified and capable supplier in China.Write Vendor Guide with General Conditions
Maybe you've checked a Chinese manufacturer and you are sure you want to work with them. The next step is to set expectations as explicitly as possible, usually done by creating what is sometimes called a "supplier guide." A supplier Guide is a document that outlines the policies and procedures that manufacturers must meet in order to work with a particular buyer. suppliers guides can often be quite long, especially for large retailers like Wal-Mart. Guides suppliers generally include guidelines for social compliance, shipping and logistics, packaging standards, approval of samples and receiving approval to begin production.
Perhaps the most crucial element of any effective supplier Guide is an agreement of terms and conditions. The terms and conditions agreement should specifically address issues including:
The best way to get an idea of the ability of a supplier to manufacture your product is going to the factory, or hire a professional third party and perform an audit. Factory audits are usually conducted on the basis of ISO 9001 management internationally recognized quality. A professional audit of this kind should be able to answer many pertinent questions, including:
Making a professional audit of a Chinese manufacturer allows you to reliably determine if you work with a qualified and capable supplier in China.Write Vendor Guide with General Conditions
Maybe you've checked a Chinese manufacturer and you are sure you want to work with them. The next step is to set expectations as explicitly as possible, usually done by creating what is sometimes called a "supplier guide." A supplier Guide is a document that outlines the policies and procedures that manufacturers must meet in order to work with a particular buyer. suppliers guides can often be quite long, especially for large retailers like Wal-Mart. Guides suppliers generally include guidelines for social compliance, shipping and logistics, packaging standards, approval of samples and receiving approval to begin production.
Perhaps the most crucial element of any effective supplier Guide is an agreement of terms and conditions. The terms and conditions agreement should specifically address issues including:
- Term of payment
- Non-Disclosure Agreement (NDA)
- Penalties for late deliveries or faulty orders
- Right of inspection; and
- Exclusive, namely what other markets, the supplier can distribute
Allow enough time to clarify the subtleties so you can come to an agreement that is reasonable for both parties. Remember that a supplier will often promise you the world before placing an order only to indulge in once you have paid the deposit. A supplier guide with the terms and conditions agreed by the Chinese manufacturer can clarify expectations and ensure that you work with a trusted provider.
It is worth mentioning a significant cultural difference here. Trade agreements are treated with Chinese partners more casually than they would by US or other Western partners. A contract signed by both parties means a legally binding agreement, as Westerners understand. But in China, the contracts are often treated simply as a set of guidelines to follow in good faith. Even if you have an agreement with a Chinese manufacturer, you may find the situation changes unexpectedly from time to time and away from the contract agreement. This led to the frustration of many overseas buyers.
But this apparent loose adherence to written agreements was much more common a decade ago than it is today, and there will probably be less frequent even in ten years. Many large foreign companies are able to take their manufacturers to court and successfully legal disputes in their favor - often citing written agreements. On the other hand, the owners of small and medium enterprises should first consider whether the money to be worth the gains from litigation to win a case. Whatever the size, the better chance of a foreign company to success is to hire a Chinese legal representation and plead their case in Chinese courts.
Monitoring and improving quality at a Chinese manufacturer
Now that you have laid the foundation for a successful partnership with a Chinese manufacturer and find a provider that can make your product the way you specified in conducting an audit of its factory. You made your expectations clear by writing a vendor guide with specific and agreed terms and conditions. So how can you be sure that the production remains on track and the quality is maintained after you have placed an order and in the future?QC Checklist Development and Inspection of goods
There is perhaps no better way to control the quality by conducting an inspection of the products on site. If you and your Chinese manufacturer have a reasonable agreement in place to work together, you should have established your right to inspect. This should give you - or a third of your choice - access to visit the factory where your goods are made, and verify product quality and condition of the order firsthand.
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