Our Top Sourcing & Quality Control Advice to Buyers

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What do you need to know when you’re sourcing internationally?

Sourcing internationally comes with its share of advantages as well as challenges. So, what do you really need to consider when your company is looking to expand its supply chain sourcing from different parts of the world? We’ve gathered some of the key considerations from our team to keep in mind when you’re starting on your journey to build new supply chain relationships.

1) Assess your resources

Eugene Tsui, Global Head of Supplier Management at Pro QC

Budgeting is always tricky because how do you measure preventative measures in your supply chain? My advice: take a step-by-step approach for how you, as supply chain and quality professionals, can assess and justify your resources for a successful buy.

  1. Define a systematic approach: It is always good to have a systematic supplier onboarding program or audit process in place from the start
  2. Identify critical components: Identify and categorize your critical suppliers and other moving parts that make up your supply chain
  3. Assess your risks: Audit factories according to your own set of requirements and categorize your suppliers into high/medium/low-risk categories in order to get a better perspective on who you will be able to develop longer-term relationships with
  4. Estimate your Cost of Poor Quality (COPQ): Understand the cost of each potential critical failure; these can be delayed product launch or shipments, field failure, product recall, rework, and various intangible costs such as marketing campaign failure or administrative costs
  5. Prioritize your resources: Based on your assessment of supplier risks, determine the intensity of time and resources that is required to mitigate those high-risk suppliers
  6. Build a business case: Measure and compare the cost of resources versus the potential cost of critical risks and the cost of poor quality of final products

2) Patience is key

Daniel Ben-Ezra, Regional Director South and SE Asia at Pro QC

It’s important to start with patience, wherever you are sourcing from, but perhaps more so in South or Southeast Asia. If you go into your buy knowing that things may take a little longer for various reasons, then it will definitely make the whole process easier.

  1. Patience is important: for example, factories tend to require longer response times for feedback and quotations in South and Southeast Asia than they would in China
  2. Building a relationship over time will be beneficial: try to get out there to visit your suppliers if you can, if not, make sure someone you trust can be there on the ground to build and maintain those relationships on your behalf
  3. Focus on more than just price: despite higher tariffs on goods coming out of China, it is not a given that factories outside China represent a better deal – take a look at the cost of your raw materials or components and assess whether you are engaging with the right factory for your product
  4. Consider capacity: Many factories across South and Southeast Asia tend to be smaller in size and capacity than their counterparts in China; consider on a case-by-case basis whether the individual factory capacity works for your supply chain needs
  5. Don’t get lost in translation: English language skills and export experience can vary among suppliers across the region – and can be especially harder for factories in relatively newer supply chain countries; make sure you’re on the same page when communicating from the start
  6. Pandemic impact: Many factories across Asia have been seriously affected by the pandemic (staff shortages, temporary closures, no outside visitors allowed, etc.) – it may take time for things to get back on track, so be patient

3) Golden Samples are important

Candace Wu, Associate Regional Director at Pro QC

The golden sample remains the ultimate test for whether a factory can meet expectations in manufacturing a final product that meets client requirements and expectations. There are a few important considerations during this part of the buying process though, and these should not be overlooked.

  1. Does it meet specifications? The golden sample should cover all elements of the given product specifications for the buy. Take a close look at workmanship, color, logo, dimensions, function, packaging, whether it meets safety standards, among other important checklist factors.
  2. Was it randomly selected? The golden sample should be randomly selected from a smaller sample pool manufactured at the factory before mass production begins, and preferably be selected by a third-party outsourced company. This ensures that the factory does not have the opportunity to select and send only the best samples to the client and thereby distorting the reality of the products selection
  3. Approving the golden sample: The final step in the golden sample process is a sign-off from the buyer ensuring that everything is good to move on to the next step of mass manufacturing. The client needs to ensure they have signed off with several important details that include their name, supplier name, approval dates, period of validity for the approval, product model number and specifications, and so on.

4) Look toward developing a long-term relationship

Rajesh GK, Head Technical Supervisor SEAMA at Pro QC

Building a relationship that goes beyond initial cost negotiations can lead to a mutually beneficial longer-term buyer-supplier association. It’s a step-by-step endeavor, but consistent collaboration throughout is key to creating the foundations for a strong association.

  1. Don’t focus only on cost: Focusing on cost alone and over-negotiating can ultimately lead to lower quality products or services as the factories will lose interest in the mutual benefit of the relationship from the start. Don’t forget many opportunities are opening up for countries across the South and Southeast Asian region post-pandemic, so there is always another buyer in line
  2. Be clear and transparent: Providing complete, clear requirements to the suppliers from the very beginning will go far in helping the entire process to be more efficient, and the end-product to be higher quality
  3. Invest time in identifying your suppliers: Being proactive is important; buyers need to invest time in identifying the right supplier fits, ensuring the factories have appropriate quality systems in place as well as skillsets and levels that can handle the buyer’s requirements
  4. Be ready to work on developing your suppliers: It may not be possible to get the perfect match from the start, but investing time and effort in developing the supplier relationship with patience can go a long way. It can also help avoid having to spend extra time and money to jump around consistently trying to find new suppliers to meet supply needs

The Covid-19 pandemic has thrown up its share of challenges for production around the world – but spending time and effort to develop your relationship with new suppliers and teams that can help work with you to meet your buying needs, can go a long way toward creating a successful end-product. Your long-term level of comfort for your supply chain process will also be boosted as a result. Talk to us about how we can help.

 

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