Have you been trying to decide whether
or not to hire a third-party inspection company? Wondering whether or not a
factory’s self-inspection will suffice? Have you noticed that the quality of
your shipments has decreased over time?
Whether you are new to manufacturing or a seasoned veteran, you certainly care about the quality of the products you make. In terms of ensuring that your order meets your standards, you have three main options:
- Hire your own in-house QC team to carry out product inspection (mainly how most larger companies handle QC)
- Hire a professional third-party to perform inspection on your behalf; or
- Rely on the factory to manage QC
Most buyers that find themselves in the small-to-medium-sized business category will be focused primarily on the last two options. So let’s take a look at third-party inspection versus inspection by the factory’s own QC.
Factory Self-Inspection
When you consider relying on the factory to inspect internally, rather than hiring a third-party to inspect on your behalf, you’ll likely have a few reasons. Here are three of the more common factors buyers consider when forgoing third-party inspection:
1. Working with a Dependable Supplier
You may have a long, well-established relationship with a supplier, and you
may be happy with the quality of product you’ve been receiving over the years.
You may not feel the need to employ a third-party QC company for product
inspections. In these cases, there are usually thorough quality checklists in place with approved samples and an effective system of factory
self-inspection (see Should You Develop a Product QC Checklist?).
Clear communication is especially important in these situations as no one except for the supplier will be able to verify whether your expectations for the goods are met prior to shipping. It’s highly recommended that you have an open dialogue with the factory staff and ask for detailed feedback on your quality expectations. Outlining the exact issues that you want the factory to fix puts the responsibility upon their shoulders.
"Outlining the exact issues that you want the factory to fix puts the responsibility upon their shoulders."If you still find the same issues when you receive the goods, then you know there is either a communication breakdown or a problem with the factory’s internal QC.
2. Timely Inspection to Meet Tight Shipping Deadlines
Any decent factory will perform their own internal QC on a product at different stages of production, regardless of whether or not third-party inspection will be performed.
Sometimes factory self-inspection on its own seems more practical than hiring another party to inspect as well, due to tight shipping deadlines. For example, you may have a factory manufacturing 10,000 galvanized steel conduits that are expected to be finished on November 15th and then shipped on November 16th. Here it might be difficult for a third-party to carry out a comprehensive product inspection of your conduits without delaying shipping.
If you’re on a tight deadline and you have some confidence in the supplier to inspect & repair or rework the product as necessary, you may not require independent inspection. But this is usually only effective when detailed checklists and samples are available and good communication is well-established with the supplier. This is more common for re-inspections of products that have been re-worked as a result of a failing inspection from an earlier third-party inspection.
3. Lower Cost than Hiring a Third-Party
Perhaps your greatest concern for quality control is simply cost. For
the budget conscious, it is cheaper in the short-term to forego hiring a third-party inspector
and leave the quality control to the factory staff. But there is no guarantee
that the shipment you receive will meet your standards.
Generally, there are fewer short-term costs and fewer steps to go through with factory self-inspection. Though the factory’s internal QC alone may not be enough to guarantee that you receive a high quality product. And if the factory does not detect and rework any issues related to product quality or specifications, it will often be much more expensive to find and resolve these issues yourself after receiving the goods.
"The factory’s internal QC alone may not be enough to guarantee that you receive a high quality productThird-Party Inspection
Any buyer weighing the benefits versus the costs of hiring a third-party to carry out product inspections should consider the following points:
1. Working with a New Supplier
Would you loan a large sum of money to a stranger that hasn’t established a line of good credit? Of course not.
Then it shouldn’t come as any surprise that hiring a third-party to carry out product inspection is just as wise when working with a supplier for the first time. It’s also recommended that you audit any new manufacturing partners before placing your first order with them (see What is a Supplier Review?). You can talk with a supplier in detail about your expectations and their capabilities. But until you actually see and evaluate what the factory mass produces for you, it’s just about impossible to validate claims and expectations.
Even if you have budgetary constraints, it's best to have an independent third-party inspect the first order of goods. Then, if you’re satisfied with the quality of the first order, you can consider scaling back or eliminating third-party QC.
"Even if you have budgetary constraints, it's best to have a third-party inspect the first order of goods."2. Repeated Quality Issues
If you’re a buyer that has seen the same types of quality defects or other problems with your product shipment after shipment, you’re likely to benefit from hiring a third-party inspector.
An independent, third-party inspector is typically impartial, unlike a factory’s own QC staff. They will confirm your requirements and specifications for the product and use these to develop a defined standard for inspection. Then they will send you a detailed report of their findings, often including photos and measurements.
The inspection report is invaluable to you as the buyer. It gives you supply chain transparency to determine if issues are found that need to be resolved (see Product Inspection Reports – 4 Steps to Getting the Most out of Yours). And the report can tell you if issues found in previous orders are being addressed by the factory. Your supplier, on the other hand, is more likely to either:
- Tell you there are no problems when there very well may be OR
- Keep you less-than-fully-informed with regard to order status and quality.
Your supplier is not likely to send you a detailed report of the status and quality of your order. And any such report from your supplier is less reliable and probably biased.
3. High-Ticket Items
Many product inspection professionals recommend allocating 1-2
percent of the total cost of your purchase order to quality
control. For high-ticket items, such as jewelry or high-end electronics, this
allocation could be higher – and it makes sense.
When you’re spending significant amounts on the goods themselves, you’ll likely want to be sure that you aren’t incurring additional expenses due to quality or specification problems. And if you’re selling a premium product, you probably want to be extra careful about managing product quality.
Buyers of high-ticket items typically enlist the services of an independent, third-party for product inspection more frequently and on a larger sample of goods. Buyers of lower-cost items, such as promotional goods, are likely to use third-party inspection more sparingly and on a smaller sample size (learn more about product sampling here).
Conclusion
Quality control on the part of a factory’s own staff certainly has its place. And it will be up to the buyer to decide whether product inspection by the factory alone is the best option for their unique situation and product.
If you’re like most buyers, particularly if you have products being manufactured overseas, you’ve probably seen quality defects in the goods you received. With professional independent inspection, you’ll be able to determine your order’s true condition while still in the manufacturer’s facility and achieve a high-level of supply chain transparency.
Be sure to check out the manufacturing podcast episode that covers this article!