How a letter of credit protects importers

16 December 2011

As I explained before in Confirming quality when paying by irrevocable letter of credit, an importer can pay his suppliers through letters of credit (L/C). An L/C triggers the payment once the bank receives a pre-determined list of documents from the supplier. It protects buyers much more than a regular bank wire, since there is no [...]

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Troubleshooting process in a Chinese factory

13 December 2011

I have been to Chinese factories a few times for solving problems. In one case, the factory pretended the goods really couldn’t be made as intended by the importer (that was true). In another case, the QC inspector found many defective goods that seemed to come from the same issue, production was still running, and [...]

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Piece by piece inspection: pros and cons

9 December 2011

Some buyers don’t want random inspections. They don’t trust the manufacturer to produce consistently at the right quality level. So they need to check 100% of the goods. A few months ago, I described inspections on a platform, where the shipment is inspected outside of the factory before being shipped out (if it is accepted for [...]

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Back to basics: what is a QC inspection?

6 December 2011

This article describes the types of quality inspections (before, during, and after production) most widely used in international trade. They are either performed by 3rd party QC providers (appointed by the buyer), or by the buyer’s own inspectors. So, what is a quality control (QC) inspection? In the industry jargon, the term “inspection” generally refers [...]

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Back to basics: what is an inspection level?

1 December 2011

This article introduces the different options available to buyers, when it comes to the representativity of inspection findings. Inspection level II (under “normal severity”) is appropriate for most inspections. But it is sometimes necessary to increase–or or reduce–the number of samples to check. The need for sampling, rather than 100% checking When controlling the quality [...]

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Back to basics: what is the “AQL”?

28 November 2011

The “AQL tables” are statistical tools at the disposal of buyers (for product inspections). They help determine two key elements: How many samples should be inspected? Where is the limit between acceptability and refusal, when it comes to defective products? The need for an objective measurement of quality In virtually every production batch, there will [...]

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How to follow your production in China

24 November 2011

I wrote several times that the most organized buyers adopt a project management approach. Mike Bellamy just published a very good video that explains why, and how, importers can follow this approach to manage their production in China. First, Mike notes that importers should not count on their suppliers’ management system: While China has some amazing pricing, it [...]

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China sourcing is a game!

23 November 2011

Many importers are frustrated and exasperated by the behavior of some Chinese suppliers, who are “playing games”. Paul Midler’s book (Poorly Made In China) does a fantastic job at dissecting the tactics of a few Chinese suppliers. Actually, he originally wanted to call his book “The China Game”… Unfortunately, Chinese exporters are experienced players. They are quite [...]

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Are Chinese factories naturally disorganized?

19 November 2011

I heard this comment from many buyers: Chinese factories are so disorganized! Who tends to make this type of observation? Importers who chase low prices and/or who purchase low quantities (and whose production ends up in small factories). And, in their case, they are very right. Small manufacturers in China often forget about some of [...]

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How much should importers pay for pre-production samples?

15 November 2011

A few readers have asked me whether it is normal to pay for pre-production samples when they buy from a Chinese factory. So I thought I should cover this topic. Short answer: Basically there are no rules. It is all left to negotiation between buyer and seller. If are not a small buyer, you can [...]

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QC inspections are only a part of your quality assurance strategy

11 November 2011

QC inspections don’t ensure quality. They only expose lack of quality. Which is good if you didn’t oversee production and you are about to ship. But it is not sufficient. Inspecting a production run gives you some information, which can (and should) be used. If you find that the goods can’t be sold, you should [...]

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How to reduce your QC inspections budget?

9 November 2011

Many companies that import from China pay for a third-party quality inspection before each shipment. At close to 300 USD per day of work, it quickly amounts to large sums. Naturally, the question of how to reduce this budget is often asked by top management. They have the uncomfortable feeling of “being on crack”: they know it’s not the right [...]

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