Useful Tips: Factory Audit, Quality Control (QC)
Tip #1: Makes Sure
Factory exists
It has a record of completing orders
It has the proper equipment and capacity to complete your production to your specifications

With so many suppliers available online, it’s hard to tell which ones are legitimate, which ones are overpromising, and which ones are potential reliable partners.
 
Quality Control is crucial even before you sign a supplier contract. You don’t want to make payment to a factory only to find its facilities can’t meet your production needs - or that it doesn’t even exist. It’s therefore critical to havea third-party QC representative to assess factory conditions before you commit, this greatly reduces the risk of being scammed.

A factory audit is an in-depth pre-production assessment, not only of your factory’s ability to satisfy ISO 9001 standards for quality management systems, but also of factory and personnel records, conditions of manufacturing equipment and facilities.
 
One of the most frequent problems a factory audit will find is sub-contracting. Quite often factories will take your order, but actually sub-contract it to another factory, and never tell you. You’re in danger if your order takes too much of the factory’s capacity, since they may not hesitate to stop or delay your production should a more profitable client come. A factory audit costs $580 USD with CSD Inspection; a smart investment before releasing a down payment to a potential supplier.
 
Tip #2: Be Transparent with Your Supplier When Setting Up QC
 
Many buyers are often reluctant to send a qualified inspector to the factory to check their suppliers out of fear of insulting them. To solve this, state from the beginning, both verbally and in writing in your purchase order (PO) to the supplier, that on-site inspections will be performed throughout production. This way you are open and honest with your supplier, while also sending the message that you mean business.

As for the exact time of the inspector or auditors visit, it is recommended to schedule the inspection with your supplier. Surprise inspections do not build trust and tend to be counter-productive. In addition, surprise visits are difficult to do as factory doors are not just opened for un-announced visitors, particularly inspectors.
 
Tip #3: Factory Inspection
   Initial product check
   During production check
   Pre-shipment Inspection
   Container loading check

Regardless of the demands of your production schedule, regular visits to the factory by a QC professional are critical. Schedule an inspection at the beginning of production. If you only schedule an inspection prior to shipment it may mean flaws are caught too late. It will also send the message to your supplier, right from the start, that you’re serious.
 
A good rule to follow, after your factory audit and when production is less than 20% complete, schedule an initial production check to ensure the production was launched properly (materials used for production, machines calibration, etc).

Following this, when your production is at least 20% complete, schedule a during production check to reinforce your specifications and catch any potential problems before you’re too far into production. In the last stage of production, when all products are finished and at least 80% packed, perform a pre-shipment inspection to have a random control over the whole production lot. Finally, a container loading check ensures the right quantity is loaded for shipping and the goods will travel safely to your final destination. For challenging or sensitive orders, have an inspector monitor your production and report daily to identify and fix problems in real-time.
 
 
AQL Acceptable Quality Level
Minor Defects
Major Defects
Critical Defects 
 
Tip #4: Know Your AQL (Acceptable Quality Level)
 
It’s your responsibility to define, “how many defects are too many?” and to what accuracy this is ensured. This is done by selecting the AQL (Acceptable Quality Level) and sampling size that is right for you and fits to your production specifications and volume. International sampling standards (ISO 2859, ANSI/ASQC Z1.4, BS 6001, DIN 40080) The total quantity determines how many pieces should be selected and how many defects are allowed for an inspection to pass.

Differences are made between minor (aesthetical), major (functional) and critical (safety) defects. Understanding how sampling and the AQL works is critical for you to be able to properly set the right level of tolerance that you want for your inspections. The default sampling level would be ‘Level II’ and AQL would be 0.065 for critical defects, 2.5 for major and 4.0 for minor defects.

As typical example, for a hypothetical inspection of a production with 4,000 units, with an AQL of II, for a sample size of 200 5% with an AQL of 5%, no more than 10 units may fail for a passed inspection report. The AQL level as the sample size can be adjusted by you and your needs.


Tip #5: Crystal Clear Design Specifications in Writing

When making initial order from factory: Never leave any decisions up to the factory or allow room for interpretation. Never expect the factory to be able to know what you were thinking. Be as specific as possible. A new client came to CSI after having purchased an order of plastic jugs intended to hold water, but had not specified the wall thickness. The factory, in order to save cost, made the walls so thin that they were unable to hold fluid without collapsing. If the client had only specified the wall thickness, assuming the factory followed the specifications, this would not have been an issue.

Make sure to list every detail of your product out, for example: provide the bar code as an image so that it can be copied by the factory, provide text as a text format that can be copy and pasted not allowing for typos, state exact color codes (Pantone being a widely recognized reference standard) and product measurements and acceptable measurement deviations (+/-5% is common practice – but it depends on your product type). By delivering detailed design specifications to the factory, and in the hands of a professional QC specialist, you help to ensure that your design specifications will be clearly understood, followed and finally checked.

 

Tip #6: Never Expect the Factory to Know What You are Thinking

Give your inspector an approved sample ensuring a reference when assessing the quality and accuracy of your entire production. Use Reference Samples

Before you start your actual production run, request at least three reference samples of your actual product. Once you confirm the reference samples, sign all three so it’s clear it is one of the approved reference samples. Keep one for yourself, send one to the factory to be used by them as an exact guide during manufacturing and the last one should be sent to us your QC inspector to be used later during your quality inspection, comparing it to the final manufactured goods.

We recommend that during the inspection you ask the inspector to collect randomly a few production samples and send them to you for an additional look at the production’s actual quality, on top of the inspection report.

More CSD Hints to Protect Your Interest

When agreeing to payment terms in your contract, consider this question, “What if I received my product after having already paid for it and it couldn’t be sold”. This powerless situation is easily avoidable by scheduling payment to coincide with approval of your final inspection.

This is done by issuing a L/C to the factory, with payment tied to an inspection certificate. A L/C is a promise to pay. Banks issue letters of credit as a way to ensure sellers that they will get paid as long as they do what they’ve agreed to do. For you, this means your bank will only release payment after an approved inspection by a third-party quality control provider.

* To get a L/C, ask your bank. Your bank will issue the letter of credit stating they (the bank) promise to pay the supplier once all agreed documents (including the inspection certificate) have been issued. Your bank will not release those funds before. This protects both you and the suppler; the supplier is guaranteed payment and you conforming quality product.

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