Most buyers tend to do the following due diligence on their new supplier:
- Legal Records Check (conducted off-site and without the target company knowing)
- Quality System Audit (conducted on-site with full knowledge by the manufacturer)
- Certificate/Report Verification (conducted off-site based on information from the supplier)
Some information gathered during the quotation process and during phone calls with a potential supplier is also used for assessing the risks related to that supplier.
But this is all related to the supplier/manufacturer’s business.
When a company purchases a product (or component) that is already developed (or is being developed), some of the due diligence work needs to be performed on the product itself, too.
That’s where this product risk assessment comes in useful.
A 360-degree product risk assessment will cover:
- Product design risk assessment
- Applicable compliance requirements, and an indication of what tests are compulsory
- Clarification on necessary durability & reliability performance, and an indication of what tests are applicable
- Start drafting a quality assurance plan, including an inspection checklist
- List of testing equipment the manufacturer is highly advised to maintain in-house
- Callout about main risks the manufacturer will need to pay attention to, especially when it comes to component quality and manufacturing process controls
Doing an assessment like this is particularly important for products that:
- Are in a highly regulated industry — for example, medical devices, or automotive parts
- Are planned to be made in large volumes
- May lead to catastrophic safety/economic consequences if they fail
To give you an idea about when it’s appropriate to do this assessment, here are a few examples of situations where this analysis is quite important:
- A company is studying the opportunity to purchase an electronic product that is poorly designed. A technical review reveals troubling issues (under-rated components, weak mechanical parts…), and it can be evidenced through relatively simple reliability testing.
- A company is about to purchase a product that may have to be declared as a “medical device” when sold in the EU, under the EU’s Medical Device Regulation. If there are safety issues, it may lead to high damages, as well as civil and criminal prosecution.
- A company has been importing parts for camper vans, for sale in the USA. They are not aware of standards such as IATF 16949 (automotive parts quality), and they haven’t researched the laws of all 50 states in that regard. Any accident due to those parts can lead to very expensive damages.
Typically, in a written report with several appendices, which may include a design FMEA (i.e. a structured risk analysis), a briefing note about a certain regulation, an initial draft of a checklist, etc.
It depends on the situation, and we will communicate about the deliverables when we discuss the client’s needs.
How much does the 360-degree product risk assessment cost?
The price of your assessment is quoted based on information such as:
- Product details, including photos and if possible specifications
- Product functions
- Existing certifications of the product and its manufacturer
- Key component information
- Intended usage of the product, and usage environment (we can offer a template to fill out, to clarify this)
- Countries/areas of sale
- History about that product (Is it new, or has it already been made? Any data on returns, failures, etc.?)
- Projected production quantity
No two customers usually buy the same product, and as such costs vary between each project, so we’ll provide you with a unique quote based on your needs and situation.