What to do with a Failed Inspection Report

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The following article was written by Sal Orozco, from the Guided Imports Shenzhen office. Sal is our Quality Control Manager, responsible for overseeing and implementing new quality control procedures to ensure all Guided Imports productions are manufactured according to top-notch quality standards.

 

If this happens to you, don’t panic. Take a deep breath, revise your approach and take comfort knowing you caught the issues so your customers won’t have to.

Depending on what type of inspection you performed, you’ll have some different options to resolve the situation. First, fight the temptation to curse out your supplier, as this will only damage the supplier relationship. Instead, start gathering information in order to make a rational decision on how best to move forward.

What determines a “Failed” QC inspection?

Resist the knee-jerk reaction to immediately cancel your order. An inspection result itself isn’t the only factor that you should use to determine whether your order should ship. Before you make an assessment, it’s important to know the nature of the failure.

Inspections are determined on a pass/fail basis using statistical tools known as AQL tables, or Acceptance Quality Limit tables. AQL tables are the standard tool used by inspection agents to determine the overall quality of your production lot.

AQL tables use statistical sampling to measure the quality of your lot. This means evaluating a small number of products in order to estimate the quality of the total lot. If the number of defects exceeds a certain predetermined limit, the inspection is designated as “Failed.”

Most Common Reasons Quality Inspections Fail

Let’s take a look at some of the most common reasons inspections fail

    • Quantity Check: Goods may not always be completed before a deadline, and if only a fraction of your products are ready by the time the inspectors come in, they’re likely to issue a failed inspection notice. Quality may be great in this case, but the quantity may have fallen short of your expectations.
    • Improper Labeling: Wrong labels on your goods can lead to failed inspections.
    • Bad Packaging: Now and then, packaging may not fully comply with a buyer’s expectations.
    • Cosmetic Defects: At times, buyers will receive goods that defy their cosmetic expectations. This can be due to things being off in color, size, logo, special properties, etc. Whatever the case may be, the product may still function as desired.
    • Poor Workmanship: One of the more difficult issues to resolve is poor workmanship. Poor workmanship usually goes in hand with high defective rates. This will often require restarting production 
  • Failed Testing: Testing can be critical depending on the function of your product. It is always important that your products fully comply with all applicable product safety laws. Importing products with lack of proper testing certifications can have severe consequences such as: orders being seized, high fines, prison time, and most importantly causing harm to your 
  • Tolerance differences: Let’s face it, everyone’s quality standards aren’t the same, this is no different between buyers and their inspection agents. Quality defects such as “2mm smudge on the surface” of your product could be acceptable to the buyer but not an inspection agent.

Misconceptions of Failed Inspection

As I just mentioned, there are many reasons why an inspection could fail – many of which may actually be acceptable to you. There is a misconception that a failed inspection automatically means the order should be delayed or placed on hold. The truth is that this decision should be made by the buyer according to the specific nature of the inspection report and the product.

What Steps to Take After an Inspection Fails

Failed inspections are commonplace in China, so it’s best to be prepared when they rear their ugly face. Every buyer should have a game plan in place prior to the start of production, should their inspection fail. You don’t want to be making tough decisions late in the game.

  1. Understand the nature of the problem(s) : Before you start issuing commands, it’s important for you to understand why the inspection failed. As we saw before, there is the possibility that defects may be acceptable to the buyer. To determine the severity of the situation a buyer must:
    1. Get in contact with their inspectors and supplier.
    2. Insist on pictures
    3. Go over the results with both inspectors and suppliers
  2. Prepare an action plan: Once you have a good understanding of your product quality you can now choose whether or not the quality issues are acceptable to ship. 
    1. At this stage, it’s important for you to assert yourself: do not accept the goods if they don’t meet your quality requirements. Accepting the goods will only validate your supplier that the quality is tolerable, and you’ll be inadvertently encouraging the supplier to produce at substandard quality in the future. Depending on the severity of the problem(s), you can choose whether or not to ship the goods or if your goods need to be re-worked and re-inspected before they ship (re-inspected is highly recommended).

The following are 5 most common options after a failed inspection:

  • Refuse the goods
  • Insist on a discount and ship the goods
  • Ship the goods
  • Rework the goods
  • Sort out the defects
  1. Implement a Supplier Corrective Action Report: A Supplier Corrective Action Report (SCAR) ensures a proper response from your supplier. This document should be sent and received within the first 72hrs of your failed inspection report and should address steps to resolve your quality issue(s). Make sure steps and schedules are clear and corrections are resolved in a timely manner.

The following is a basic Checklist of what a SCAR should include:

  • Identify the problem(s)
  • Identify the cause(s)
  • Provide a solution for each
  • How will the solution be applied
  • Write down the solution(s)
  • Communicate the solution(s)
  • Write down the action(s)

*Note: Corrective and preventive action will depend on the severity of the quality problem(s).

*Be realistic: You won’t get good results if the person filling out this form does not have the factory authority to make changes or is not trained in Root cause analysis (RCA), a method of problem-solving used to identify the root causes of problems. Insist on qualified factory personnel to fill out the SCAR form.

  1. Re-inspect your goods before shipment:

As obvious as it may seem, make sure your original issues have been resolved before your goods are shipped. Ask for a re-inspection to make sure your old issues have been fixed and no new issues have been raised after factory rework.

  1. Implement Corrective Measures for Next Time:

No one wants to repeat this experience. To prevent this from happening next time, increase your involvement in production. You will want to take the time to document, clarify, and implement your standards by speaking to the right people in the factory.

If you want to improve your quality, follow this advice:

  • Perform QC inspections earlier when your goods are in the initial stages (20% – 30% completed). You can catch defects early and prevent issues from escalating.
  • Provide your supplier with a Specifications Sheet. This document will detail all your product requirements.
  • Request pre-production samples from your supplier prior to the start of production. You may want to send your best sample to your inspection agents as well as a list of your quality parameters and quality tolerances. This will help your inspection agents understand your quality requirements.
  • If possible, you may want to take a trip and visit the factory yourself while production takes place. This will put pressure on the factory to do good by you. If this is not an option, you can also send a quality assurance agency to visit on your behalf. It never hurts to have some boots on the ground.

A word of warning

Don’t always expect your supplier to entirely alter their manufacturing for you. You can only have so much impact on the way your supplier conducts their business. Eventually you’ll have to decide if the issue is something that can be addressed by your small changes and suggestions, or whether the issue is the suppliers themselves.

Remember, it’s not your job to act in your supplier’s interests. If the supplier doesn’t value you and your business, who is to say they will implement your corrective actions? If you feel your supplier doesn’t value you as a customer, it’s best you look elsewhere.

To put it bluntly, manufacturing in China is always a dodgy business. Suppliers and buyers each hold their own expectations. Unfortunately, quality control can only do so much to help bridge this gap.

Every buyer should practice these guidelines whenever they conduct manufacturing in China. These guidelines can help improve your chances of improving and receiving consistent product quality.

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