QA Strategy in China: 10 Elements You Should Include

A good QA strategy in China will contain the following 10 elements:

We’ve split these into 4 different sections:

1. Qualification of new suppliers
2. Purchasing method
3. Quality Control
4. Buyer-supplier relationship

Let’s go through them in order so you understand the makeup of a good QA strategy in China.

1: Qualification of new suppliers

1. Run background checks on suppliers

Some trading companies pretend they are a manufacturer with a factory, but in fact, they’re outsourcing your production to who-knows-where. To ensure that you are working with a real manufacturer, run a background check on the companies you’ve found. For example, go for an affordable ‘supplier legal records check.’

You will need full information about the factory (including their company name & address in the local language) and their written guarantee that they will not place production anywhere else without your written authorization (which you can include as a part of your manufacturing contract with the supplier).

2. Reliability audits on factories

Do you want to place orders in a factory that you don’t know? If you can evaluate its capacity and its quality system, go and visit it. If you can’t, appoint a QA agency to do a quality system audit. Ask for an example of a report before you book the service, to make sure you get what you need.

3. “Fit” evaluation of new suppliers

Factory audits tend to give a higher score to larger manufacturers, simply because they have a more mature organization and more written procedures. However, for smaller order volumes you might be better served by small factories as your order is likely more important to them. In this case, a visit from your staff is necessary. You will evaluate the owner’s personal motivation to take your order and keep an eye on it every single day. When necessary, a trading company might be a good fit for you.

2: purchasing method

4. Fair payment terms and contract

Once you have paid 100%, you have no more leverage. Don’t think Chinese suppliers are motivated by your next orders. Most of them aren’t, at least not to the point where it pushed them to prioritize your orders over their other customers’. Here are some tips:

• Try to pay by letter of credit if your total order amount is 50,000 USD or more, at least for the first 1 or 2 orders with a new factory.
• Always limit your first payment (if you can’t pay by letter of credit) to 30%.
• Do NOT wire the balance before shipment or before quality was confirmed by a final inspection.

For large orders, use a manufacturing contract drafted by a lawyer specializing in Chinese law. This must be very detail-oriented, pre-defining each penalty’s amount and ensuring that the contract is enforceable in a local court of law.

5. Fail-safe purchasing steps

How do you make sure your purchasers follow the right buying procedure? They must have and be trained to follow a buying procedure that incorporates all the QA steps. For example, they should not forget any important step when qualifying new suppliers or regarding payments.

And this is even more important when developing a new product. For example, make sure you validate fully the product design before allowing the factory to go into tooling and manufacturing!

Theme 3: quality control

6. Product specifications definition

Before issuing an order, your quality department or QA service provider should define your expected product specifications very precisely. This should include:

• Product description
• Performance/resistance requirements
• Packaging
• Labeling
• Limits and tolerances.

Get the supplier to accept the spec sheet (after discussions and revisions if necessary). And make them a part of the manufacturing contract, typically as an appendix.

7. Regular product quality inspections

Especially when manufacturing new products, check the product quality during production, and again before shipment.

For re-orders, final (pre-shipment) quality control is usually enough. And, for proven suppliers experienced at making your product, you might not need to check every shipment if things are pretty stable.

Theme 4: buyer-supplier relationship

8. Long-term business relationships

Building mutually respectful and beneficial relationships with suppliers is an important part of your QA strategy in China. Some importers want to “partner” with one factory, by trading regular orders against low pricing and good quality. Be warned, this approach generally doesn’t work.

It is effective to make and keep to your promises with a Chinese supplier, and to stay with them if you have a good relationship, rather than abandoning them at the first opportunity you have to save a few pennies elsewhere. But if a supplier lets you down, don’t hesitate to “punish” them by giving orders for certain products to another supplier, at least for some time.

9. Regular face-to-face meetings

In China, face-to-face meetings usually provide the best results. Book that plane ticket and make sure your suppliers know you. Meet their salespeople, but also their managers. You will know who you should call when you run into trouble. Listen to this podcast about How To Develop Your Chinese Supplier for more details on why getting to know them is a great idea.

10. Improvement of factory operations

Chinese factory owners can be quite stubborn. However, when their major customer pushes them to improve and sends them warning letters, they listen.

If you have worked with a good supplier for years and if they listen to you, why don’t you pay a manufacturing consulting firm to improve their processes and their organization? That’s especially important if you see they haven’t hired industrial engineers to improve their processes.

Their labor productivity can probably be increased by 20% on a given process, their cycle time reduced by 30%, and their defects reduced by half, all without making deep changes in the factory’s organization. That level of improvement may well be worth an investment from your side and you’ll have an even better relationship with the supplier, too.

Next step

If you are developing and manufacturing new products and want to set up a reliable supply chain, implementing a QA program makes a lot of sense. We can help you do this.

Editor’s note: This post is based on the 2012 post: A Good Quality Assurance Strategy in China [10 Components] on QualityInspection.org and has been edited for Sofeast readers.