Overseas Quality Control (QC): Who to Hire?

China VIE

The relatively new Quality Wars blog is looking like it will be a good source of information on quality control (QC). The blog’s subtitle is “The fight for quality export product”

I especially liked its post, QC: In-house vs. Outsource [link no longer exists], dealing with whether foreign companies manufacturing in Asia are better off doing their own QC with an employee in Asia or hiring an outside QC company. The post very nicely sets out the following pros and cons of each:

Outsource QC to a 3rd Party QC Company

Positives

1. Opportunity to work with management and trained staff who specialize in checking product, factories and production in Asia
2. Can capitalize on the acquired knowledge of a QC company who has checked various different products and understands how factories in Asia attempt to “short-cut” and cheapen products for which a standard has already been established
3. Ease and economic value of having staff contracted on a “per-use” basis, with short notice

Negatives

1. On a “per-use” basis you may find that the cost of using a 3rd party QC company is higher than hiring one of your own local staff
2. May be difficult to get a 3rd party QC company (not all, but some) to get highly specialized and focused on your product line the way an internal staff could be

Hiring Your Own Local Staff

Positives

1. Generally will provide you a lower cost option on a per-inspection basis than working with a 3rd party QC company (especially if you were to be doing 20+ inspections in Asia per month)
2. This person may be trained to handle functions outside of QC, such as price negotiation and other sourcing functions, which a 3rd party QC company will not get involved in
3. Opportunity to develop long-term relationship with a single individual which could be a strategic to your long term sourcing solution

Negatives

1. Generally difficult to find and train a single individual in the quality control function, who has not worked in a structured QC company previously – even more difficult from a remote location
2. Higher likelihood that such an individual will be bribed by a factory to pass unacceptable goods (a major issue in the QC industry) –no company structure to provide a moral framework and no cooperate measures in place to prevent unethical behavior
3. Difficult to keep a low-cost employee employed remotely and on a “per-use” basis, which is often how QC is needed by your company

I am going to go out on a limb here and say that most of the time, if you are not a big company, it makes sense to hire an outside company to handle your Asia QC. I say this because I have heard and seen far too many instances where the inside employee was on the take.

What do you think?

8 responses to “Overseas Quality Control (QC): Who to Hire?”

  1. Dan,
    One major downside that is left from using 3rd parties is the fact that many of the people that are being sent to factories are junior and may know nothing about the product or process they are looking at.
    Since last year a number of the more popular firms have simply grown too fast and their reports are super thin.
    My 2 cents is that the best model for a SME is to find a consulting firm who has the ability to support them in managing their process. Tie them to the process in a manner that is comfortable for you (retainer, FOB %, per piece, etc) and stay with them…
    R

  2. Neither approach/option will be as effective as they could be unless two things happen:
    1. The are directly linked to the core strategy of the firm. That means said firm must have a strategy, communicate said strategy to its employees and they understand and buy in. All are big “ifs” and involve hard work, bright people, and commitment.
    2. The buying departments and social compliance departments in firms must talk to each other and work together. Often, their interests and goals are completely at odds with the other. This in turn results in embarrassing headlines for firms committing and being publicly blasted for social responsibility no-nos.

  3. Don’t discount the importance of thorough due diligence during the sourcing process, preferably performed by a third party.
    And while ongoing communication is definitely useful to avoid disputes over CSR and other compliance issues, some firms may consider covert investigations into suppliers in addition to normal QC/auditing procedures.

  4. I have been away from my profesion for 1 year now, but when I was involved in my chosen profesion I would not buy anything that was manufactured in China. I found it to be totally sub-standard.
    When you throw away 20 parts to get 1 good part price & cost become an issue.

  5. I work at a third-party inspection company and with my experience, i can tell that sourcing combine with inspectoin is 100% conflicts of interest.
    Consider below points before you hire a QC company or individual:
    1. Is s/he qualified? PROOF it! There are some QC companies start to hire graduates to do the inspection to reduce the cost. This is extremly inresponsible and considered as unprofessional.
    2. Does the QC company hire freelance or full time inspectors? (Freelance is very common in QC industry ,even with those BIG NAME inspection company) The cons of freelance is that they earn quick bucks,which makes them not take the inspection seriously and the bribery issue is mostly happened to freelance inspector.

  6. If you are ordering a mass-produced product then a simple QC will be sufficient with a reputable standard 3rd party inspection company.
    However, if you need OEM or have a new design then you will definitely need more control and interaction between your Quality department and the manufacturer in China.

  7. I don’t know who to hire, but I do know the next time I deal with China I am going to hire somebody to check my product before it ships. I am sitting here right now with $60,000 of junk and my Chinese supplier is refusing me a refund. Can I at least sue them?

  8. Very good points, Dan. Per case 1, 3rd Party QC Company inspectors can be a better solution, because hiring one local inspector directly, it is costly as well because you need him to travel all around cities for inspections, your suppliers are not always at the same location. Per case 2, yeap, do agree that sourcing and Qc are in conflicts. Sourcing company bears the responsibilities of products quality, yet QC company mainly focus in finding products quality issues.

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