Disputes With Chinese Suppliers Volume 15 | My Supplier Says Our Quality Inspector Is Taking Bribes! Sometimes your supplier will tell you that an inspection firm’s QC inspectors demand to be given bribes in order to give the inspection a positive result while threatening to give a negative one if they are not financially compensated.

What happens if you hear this from your Chinese manufacturing supplier..?

 

Question

“Our supplier tells us that our inspection firm’s inspector demanded several hundred US dollars in order to give our latest batch of products’ inspection a pass and asked us not to send them to their factory any longer. We’re now worried that the inspectors and results aren’t reliable. What should we do?”

 

Answer

Unfortunately, it is very common for Chinese suppliers to try and discredit inspection companies, for the simple reason that they prefer if you waive inspections.

Fewer product inspections equal fewer problems for them to deal with before you send the final payment and they ship the goods.

While of course, it is impossible to have a 100% guarantee that inspectors won’t ask for bribes, this is less likely than the supplier ‘playing up’ in this way in our experience. So, if you’re in this position, don’t panic about your inspection results and whether the inspection firm can be trusted just yet.

Questions to ask the supplier and inspection firm

There are some questions you can ask to get to the bottom of things:

  • Take the supplier’s claims with a grain of salt. Talk to your inspection firm about this issue and get both sides of the story before getting very worried. Most credible firms will have put in place safeguards that minimize the risks of bribery of quality inspectors who’re out in the field.
  • Many inspection firms also provide a specific way for suppliers to lodge a complaint directly to management about an inspector’s behavior, too. It is a requirement of ISO 17020, and it is a sign of good management. If yours has provided a contact for this, did the supplier approach their management with the issue? If not, why not?
  • Does the inspection firm request the supplier representative to sign a document where they confirm that neither they nor the inspector gave or received bribes? If so, question why they signed it even though they are now claiming that bribes were demanded.
  • If you have had the inspection agency inspect other suppliers of yours, how did that go? It’s a good idea to reach out to the suppliers and ask if the inspectors provided a good service when visiting them or if something seemed off (but perhaps avoid asking if inspectors took bribes flat out, as this may then also give the suppliers the idea to throw the inspection firm under the bus in order to avoid future inspections themselves!).
  • You might also ask your peers who also get products manufactured in China whether they’ve experienced an issue like this. You might be surprised at how many confirm that this is a common ‘trick’ of suppliers.

So, why does this occur?

There are a few points to remember:

  • A supplier might feel that the inspector is a bit too strict when categorizing defects (for instance), and get upset enough about it to try to discredit the inspection firm and get them thrown out of doing inspections in future to ‘get revenge.’ This is even more likely to happen if an inspection caused them to have to do rework, lose some money, and get paid later on an order, for example. But the fear of those events is often sufficient to motivate them. 
  • Chinese suppliers want to get paid ASAP – that’s a key motivation. The earlier they ship, the earlier they get paid. So QC inspections are often seen as an annoyance and inspectors may be ‘stopping them from getting their money’ or at least making the process more difficult and slower.
  • Miscommunication between supplier, inspection firm, and yourself. This is a classic example where it’s critical to keep talking and ask questions calmly to try to get to the bottom of things. Most inspection firms have no incentive for anyone to take bribes, they’re paid per job and their incentive is to give you honest information about your product quality so you book them for more inspections in future!

As the buyer, you can minimize this risk

When you start working with a supplier, make sure they (and the key people at the factory) know that corruption is absolutely not permitted in your supply chain. And if, for example, an inspector asks for bribes, they must say no and they will be given the opportunity to request another inspection company to come check a production when requested.

You need to document your quality standard and make it as detailed and specific as possible. This way, the inspector can show the factory people what you require, and there will not be suspicions that he/she is ‘making things up’.

It also helps to send inspectors earlier in production, when the objective is to give feedback about production quality rather than ‘stopping bad shipments’.

Finally, never heap large amounts of pressure on a supplier. If you say ‘either you pass, or we refuse shipment‘, there is a real risk that factory staff will make offers to your inspector.

The bottom line…

If your supplier has been upset by an inspector legitimately attempting to uphold your quality standard you might have to lay down the law and stress how important product quality is to your business. Have you got a backup factory in place to switch suppliers if they refuse to fall into line?

If it turns out the inspection firm’s inspector was taking bribes, of course, don’t use them in future. That’s a reasonable reaction to a loss of trust like this.

*****

Do you find yourself in a difficult situation with a Chinese supplier? Let us know and we might answer your questions in a post like this! Contact us here.

 


 

Other helpful content

You may also find these posts and podcast episodes helpful in this case:

If you’ve exhausted all possible avenues and your supplier won’t budge, if it’s feasible to do so, switching to a new supplier could be a solution to your problem. It doesn’t have to be as painful as you may think, as we outline in this free eBook…just remember to put protections in place that will prevent the same scenario from occurring again! Get your copy here: How To Switch To A Newer, Better Chinese Manufacturer? [eBook].

You can also read our entire ongoing series of posts about disputes with Chinese suppliers here.

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