By The Pro QC Quality Assurance Team
So, you’re looking to source Medical Personal Protective Equipment (PPE) while things are in short supply in the current coronavirus environment. However, there’s an abundance of suppliers online, all claiming to offer exactly what you need, and fast. Who do you trust? Here’s our guide to help you spot a scam and avoid fake suppliers during COVID-19 and more generally.
There are a couple of key flags that usually indicate things aren’t quite in order:
- If the product portfolio is not consistent with what the supplier usually sells – for example, an apparel manufacturer is suddenly selling surgical face masks.
- A factory that was set up very recently, clearly to capitalize on current opportunities – and with no track record of prior manufacturing.
However, the scam is often not picked up on until the factory audit process begins. Scam suppliers tend to avoid third party requests to visit their production facilities and will direct auditors to a warehouse or somewhere that doesn’t have the capability to produce the product in question.
There are also other indications that you are dealing with a fake supplier: below market pricing, and accents that don’t match the local country or foreign bank accounts. Also, the vendor insisting on being paid a deposit without allowing any visits.
For common medical PPE, such as surgical masks and simple hazmat suits, the manufacturing equipment and space required is not big. It is easy for opportunistic suppliers to purchase a machine that produces the medical PPE and rent a space to start up their production line – often with no prior experience. These types of suppliers are not invested in safe production environments, which are required by ISO Standards such as ISO 13485 or the Good Manufacturing Practice (GMP) for medical devices, and the products they manufacture will usually not pass quality inspections at customs borders.
More recently Pro QC has encountered cases where several clients are sourcing personal protective items from China; the supplier, despite accepting a client’s deposit, may have several clients engaged in a bidding war without their knowledge, and will only ship the order to the customer who is willing to order a larger quantity and pay a higher price.
Detecting a fake manufacturer isn’t always easy, however. A recent real-life case, not linked in any way to Pro QC, involved a sourcing agent who accepted 5 million yuan to produce 5 million face masks. He found a factory to manufacture the products for 4.5 million yuan and pocketed the remainder of the money as his fee. The facemasks were produced and shipped out a week later, in good time. However, the masks did not clear customs due to quality issues, the CE certificate was fake. The buyer was angry and wanted his money back – and the factory also refused to return the money as they had produced and shipped the masks but had made no promises about quality.
Pro QC has personally experienced scams involving medical masks in Thailand. Clients have contacted us with factory details, so we can go in and conduct the factory audit. However, when we reach out to schedule an inspection, we have experienced several red flags including factory contact phone numbers that cannot be called through local numbers, only by international ones. After sending WhatsApp messages requesting company registration information, we are blocked. Addresses that indicate the factory is based in the city, which is usually unlikely as most manufacturers are not city-based. We’ve even received certificates of registration that appear to be photoshopped – a major tell-tale sign that the factory is a scam operation.
We are able to go back to clients and tell them that we are likely dealing with a fake manufacturer, but there isn’t much more we can do when it reaches that stage. However, we can work with your business to ensure that you’re embarking on a genuine sourcing process from the start. In response to a surge in demand during the COVID-19 crisis, Pro QC has recently launched a new menu of Supplier Verification services to help our clients from being caught in supply scams and reducing costs as a result. We can help with:
- Performing factory audits; verifying certifications and qualifications of the suppliers
- Purchasing PPE from authorized suppliers
- Performing quality inspections to ensure the medical PPE is not defective/contaminated/dysfunctional
- Assisting with customs clearance through provision of requisite product certificates
You can learn more about this new service at https://proqc.com/industries/COVID-19 PPE/
Other case studies which we have assisted our clients with include genuine suppliers, but issues which occur after the goods leave the factory. With Medical PPE in demand, there’s a lot of in-transit theft occurring. We have worked with our clients to ensure they protect the quality and full arrival of their products, while also verifying quality to ensure authenticity of the product on arrival.
Although the market for medical grade goods is moving very quickly, it is advisable to conduct pre-supply audits with the factories you are intending to engage with. Audits provide informative indications as to the quality management system of the factory, manufacturing capabilities, and the extent of controls they have in their production.
Get in touch with Pro QC today to find out more about how we can help you avoid a fake supplier and source your medical PPE quickly, efficiently, and cost-effectively.