Defects are an unavoidable part of mass production. No matter how well you employ quality control measures across the workplace, you are bound to come across some sort of defects in the final finished goods.
Even businesses that are extremely cautious about minimizing the number of defects, it is very likely that pre-shipment inspection will reveal defects found in some products in one form or the other. The next question that arises is regarding how to address these quality issues when they are found?
Quality concerns can be addressed in a number of manners: you may ask your supplier to rework and repair the affected goods, or perhaps ask for producing new products from scratch. But, will these corrective actions result in a delayed order for you? What additional costs will you incur? These are among the abundant questions that you, as an importer, may be worried about.
Perhaps another worrisome thought is to strike a balance between receiving benefits of fixing defects in products and the risk of damaging the products in the process of inspection. Or perhaps you have an urgent order that needs to be shipped as soon as possible and you wish to solve any defects found in the products in time for the delivery schedule. You might also want to prevent these defects from recurring in the future.
News
The good news is, little as there may be, that you’re not alone in your struggles. Millions of importers like you face difficulties getting their products made just close to perfection, exactly how they have instructed the supplier. However, this does not mean that you should start accepting these defects as part of the business; the guide below outlines four distinct strategies that you can employ when coming across defected products in pre-shipment inspection. Depending upon your situation and the type of product and defect, you may use the strategy that appeals most to you.
Demanding product rework
In the case of product defects that can be corrected through rework, it is most likely that repair and rework will be ordered in order to minimize losses and make the products usable. The number of products that are made in-line with the quality standards by reworking them, the lesser the number of products you would be eventually discarding- thereby meeting with order demands in a more sufficient manner. Product rework is most highly advised in cases where it is relatively cheap to repair the product and the process does not require a lot of time or effort.
As an example of defects that should be immediately repaired without substantial cost, suppose the factory prints incorrect barcode stickers and pastes them onto your products. In this case, it is fairly easy and quick to reprint those barcodes and replace them.
Another example of such a case will be if you are a shoe seller and the factory uses excessive glue on the sole of the shoes; here again, the defect can be easily fixed by wiping off any excess glue from the shoes.
Product rework is most effective in cases when:
- Rework is quick and cheap
- Requires minimal effort
- Does not significantly delay the shipment
- Does not cause any quality problems in the products
When can product rework not be the appropriate solution to address quality defects?
There will be situations where product rework might not be the best option available to you, as it might cause more harm than good. In certain cases, repairing the product might actually introduce new defects into the products, in addition to the ones that exist already.
As in the previous example of excess glue on the sole of the shoe, it might be possible that scraping off the glue from the sole of the shoe will leave marks that will damage the shoe even more. These abrasions will make the shoe unsellable altogether.
In another scenario, it may be possible that you are running short on time and have made a commitment to your client to deliver by a certain date. Attempting to rework the defected products might result in a violation of that commitment; if the proportion of the defected products is relatively small compared to the entire shipment, you might consider ignoring the minor defects and sending the shipment at its decided time without rework of products. You might also wish to avoid rework if the supplier does not take responsibility for the rework and instead asks you to pay for the parts or labor required to perform the rework. If you feel that the defects found do not compromise the salability of the goods, you can decide to forgo rework and ship the goods as they are instead.
Rework For Your Defective Products
If you’re confused about whether or not to order rework for your defective products, it often helps to answer the following questions:
- The severity of the defect: will the defects cause the consumers to reject or return the products?
- The cost of rework required: who is going to pay for the rework, you or the supplier? And what will the costs be?
- Expected deadline: do you have time to undertake product rework?
- Are there any other risks associated: sometimes, as mentioned above, rework might cause additional damages to the product which you do not wish to face?
Answering these questions will usually give you a clearer image regarding the severity of the issue and whether or not you should go ahead with product rework. Your QC staff can also provide you with valuable feedback in this regard, but the ultimate choice depends on you, so decide wisely.
Don’t wait till after the delivery to conduct product rework
As an importer, it may cross your mind to import the entire shipment, including the defective goods, and then rework them afterward. This idea is strongly advised against for a number of reasons:
- If the products are not reworked adequately, you might be left with a large stock of unsellable goods that you will then have to bear the expenses of disposing of.
- Trying to send back defective goods to the country of origin may be a lengthy and tedious process: you may be charged excessive custom duties and value-added taxes.
- There may be certain import restrictions in place that might prohibit defective goods from entering the country that you wish to sell in.
- The cost of local labor to rework the products is significantly higher than the cost that would be incurred in the country of origin. For example, Chinese workers operate for less than one-quarter of the wages paid to an American worker.
- The cost of contacting and hiring a team for rework will be high, in addition to explaining your demands to them from scratch.
For these reasons and many more. It is recommended that you take care of any defective products as soon as they are found while they are at the suppliers. And only import products that meet your quality requirements.
Replacing substandard goods
As explained above, sometimes the defect may be of such a nature that rework may not be possible; in such a situation, the best option available to you is to ask the supplier to replace the defective products. You may agree with the notion that the supplier replaces substandard goods that are found in the shipment. Which exceeds a certain number. In other words, make sure to set tolerances with each category of goods as well as the maximum number of defects that you will allow in a shipment- this makes sure that where you do not have unrealistic expectations of perfection from your supplier, your supplier is also bound by you to not exceed a certain range when it comes to defected products.
How can you set clear tolerances as a defect management strategy?
The foremost decision that you must take when setting tolerances is as to what issues. You can let go of the product and what is absolutely unbearable. Given below are a few strategies that might help you get started in your thought process:
- Make use of a standardized system such as Acceptable Quality Level when you are classifying defects.
- Make sure to have a central document such as a QC checklist that clearly lists all of your requirements and specifications for the supplier.
- It is advisable to provide your supplier and the inspection staff with relevant drawings, photos, and other related notes regarding any quality issues that you have experienced in the past.
- Make sure you approve a golden sample before starting mass production!
Chargeback for defective goods
Firstly, it is essential to conduct a product re-inspection after your supplier carries out product rework. This is to ensure that all the quality concerns have been adequately fulfilled. And the products no longer have any kind of defects in them.
In case you find that the supplier has not been able to rework your products according to your requirements. Or that the defects found cannot be reworked altogether. Your best solution is to ask for a chargeback or impose any other penalty. That you deem appropriate in order to address the quality concerns.
To prepare for such a situation, it is recommended that you lay out certain remedies available. To you in case of defective products prior to beginning production. Some of the agreements that you wish to agree upon with your supplier include:
- The supplier will bear any costs for re-inspections, such as those for a third-party inspection,
- And the supplier will pay a penalty for any substandard units shipped over a certain quantity,
- The supplier will replace any substandard units found during an inspection over a certain quantity.
Minimize Defective Products
The reason why such an agreement will act to minimize defective products in the shipment. Is that the supplier will be incentivized to remain more vigilant throughout the production process in order to avoid having to pay penalties or bear the cost of rework in case of defective products. It also helps to make sure that you and your supplier are on the same page. Regarding quality expectations from the products to be manufactured.
Agreeing upon certain terms and conditions regarding defective products helps to ensure that there will be no disagreements afterward; without a prior agreement. You might find it difficult to hold the supplier properly accountable and to seek rework or penalties from him.
Another very major factor that plays a role in how effective this kind of agreement will be. Between you and your supplier. Is your relationship with your supplier. It is generally noticed that the more cordial your relationships are with your supplier. Having worked for a long time and remained on friendly terms. The easier it is for you to settle such grievances that arise when defective products are found in the shipment. However, in the case of suppliers who work with you on a less frequent basis and much smaller order quantities. You might lack the leverage required to enforce such agreements.
All in all, no matter how cordial your relationship is with your supplier it is best. If you are layout your quality expectations clearly prior to signing an agreement. So that there will be no disputes afterward.
Destroying unsellable goods
In very extreme cases where you cannot apply any sort of remedy to make the goods sellable. You will have to resort to destroying the defective goods. Once all your options for possible rework are exhausted. You will have to see that those defective goods are discarded and cannot be used by anyone else. This is usually done in the hope of:
- Protecting your brand substandard, counterfeit goods, or
- Preventing competitors and resellers from buying and selling their inventory
This is especially important in countries with very weak intellectual property laws such as China. These countries have an entire market set up for the selling and purchasing of defective, counterfeit goods. These are usually sold at a cheaper price as compared to the original, branded products. As an importer, you wish to avoid such a situation. Where your products are either being sold to the competitors or as cheap, substandard goods.
Most suppliers will find it very unprofitable to destroy defective goods. They would wish to salvage the situation as much as they can. Even if it means illegally selling off these defective goods in the black market of their own country. For this reason, it is highly recommended to not leave the process of destroying the defective goods entirely. Into the hands of the factory staff. You would want a third-party inspector to be present on-site. To make sure that all the required protocols are followed. And no items are left behind that can be sold off later on.
Pro tip: Make sure to constantly update your QC checklist!
It is advised to immediately update your QC checklist as soon as you find a new defect in your product. This will help the factory staff remain vigilant about it in the next round of production. So that similar defects can be adequately avoided. By regularly updating your product specifications and QC checklist, you ensure that you equip your supplier with any significant information that will help them in production. This information can include:
- New or updated inspection criteria, especially new known quality defects to report,
- Adjustments to product dimensions,
- Changes to product components or materials required.
This information will render you and your supplier several longterm benefits, such as:
- Your supplier can more clearly understand your expectations
- This information will alert the supplier to particular defects or other issues they should take steps to prevent
- You can more easily interpret future inspection reports and be confident that the inspector attended to all of your quality concerns.
Conclusion
Even though you might wish to receive a seemingly perfect order, it is far from reality. You’re bound to come across defects of some kind in some of your products. And knowing how to deal with them is part of being a successful business. As shown above, how you deal with defective products depends upon the severity of the issue. Found as well as the timeline you are faced with. You must remember to fulfill your customer’s expectations.