3 Types Of Quality Control Plans & Why They're Needed BEFORE Production

11/18/20 • 33 min

In This Episode...

Sofeast's CEO, Renaud, and Adrian from the team discuss everything buyers should know about quality control plans. A QC plan lists all the quality-related checkpoints to be passed during/after a production run. Depending on the buyer's situation (which include factors like order size and value), it can include process, product, or legal checkpoints. Approving QC plans is an essential step before production is allowed to start as you'll see as we go through the topic.

There are three types of quality control plans we'll be discussing:

The product quality control plan to include in a contract with a Chinese supplier which demonstrates the buyer’s expectations for the supplier regarding quality, inspection, and production activities.
The process control plan that decomposes production in each process step (often called control plan).
The QC plan for a new product being brought to market which outlines in black and white the manufacturer needs to know in order to produce goods at the right quality.

You'll learn when these plans are appropriate, or, conversely, if there are buyers who don't require them.

Show Notes

00:00 - Introduction.

00:56 - What are QC plans and why are they important to agree on before production starts? A summary of QC plans and for which kind of orders they'd be most appropriate.

03:09 - Discussing the 3 types of QC plan and the different contexts they're used in.

03:48 - 1. The product quality control plan that makes up a part of the manufacturing contract. Defines legalities around access to the facility, testing, product compliance expectations, who pays for testing, what happens if products fail quality tests and don't reach the quality standard, and more.

07:18 - 2. The process control plan. This is a core tool for the automotive industry but can be used by any buyer if their orders are large or expensive enough to warrant a deep investigation into planned production processes in order to ensure quality throughout. Plan what is expected at each production step, how it can be checked, and what to do if an issue is found, and document all of this in the plan. This also applies to upstream suppliers if you're taking quality very seriously. (Read this blog post for more info on setting up your process control plan: 11 Steps To Set Up a Process Control Plan)

13:13 - How to identify suppliers who are capable of adhering to a stringent process control plan? 2 ways, process audits and a tip from Renaud to do it in a simpler way.

15:02 - 3. The QC plan for when developing a new product. This clarifies your needs and takes the form of a number of questions, which we list and discuss in this section, about quality in a type of checklist that the manufacturer really needs answers to have answers to (or be able to answer) before proceeding. It forces both buyer and supplier to think deeply on how to assure the best quality possible when manufacturing a product which is new on the market. (You can see an example QC plan for a new product in this blog post which this episode is based on).

22:46 - How Chinese suppliers' culture can be to disregard planning ahead for quality and instead focus on fixing issues later as they occur. Hint - this flexible approach isn't a good thing, especially for new, complex products.

25:01 - The dangers of not going through the QC planning process with Chinese/Asian suppliers. They will be very encouraging which can lead some buyers to trust in their expertise, but this can be a trap because it's on YOU to define a quality standard and expectations for the supplier to follow, not to be led by them as their ultimate interests may not align with yours as less specific requirements give them more opportunity to cover themselves should they do something wrong.

27:35 - Are all 3 QC plan types appropriate for all kinds of buyers? The product quality control plan (1) should usually be implemented for any size of order if possible, as it's good to have quality expectations in your contract with the supplier. The process control plan (2) is usually more appropriate for buyers with high quality requirements who place large orders (in the tens of thousands of pieces at least). The QC plan for new products (3) is appropriate for buyers developing and launching new products onto the market.

30:55 - Why buyers with large order MUST have a quality standard. For instance, POs in the hundreds of thousands of dollars.

31:12 - What should buyers of existing products (such as off-the-shelf items to be rebranded) be focusing on when it comes to quality? QC plan 1 for the manufacturing contract's terms is still helpful, as is creating a quality standard and documenting...

In This Episode...

There are three types of quality control plans we'll be discussing:

The product quality control plan to include in a contract with a Chinese supplier which demonstrates the buyer’s expectations for the supplier regarding quality, inspection, and production activities.
The process control plan that decomposes production in each process step (often called control plan).
The QC plan for a new product being brought to market which outlines in black and white the manufacturer needs to know in order to produce goods at the right quality.

You'll learn when these plans are appropriate, or, conversely, if there are buyers who don't require them.

Show Notes

00:00 - Introduction.

00:56 - What are QC plans and why are they important to agree on before production starts? A summary of QC plans and for which kind of orders they'd be most appropriate.

03:09 - Discussing the 3 types of QC plan and the different contexts they're used in.

13:13 - How to identify suppliers who are capable of adhering to a stringent process control plan? 2 ways, process audits and a tip from Renaud to do it in a simpler way.

30:55 - Why buyers with large order MUST have a quality standard. For instance, POs in the hundreds of thousands of dollars.

Previous Episode

Pricing, Negotiation, Contracts | Vetting Chinese Suppliers (Part 10)

In This Episode...

You've tuned into part 10 of our mini-series guiding you through effective vetting of Chinese suppliers that will help you to find the best possible manufacturer for your products (listen back to the entire mini-series on vetting Chinese suppliers here 👍).

If you've been following this mini-series, you will already have learnt about due diligence, factory audits and visits, exploring testing facilities, and much more when it comes to vetting suppliers. But if you're at the point where you are ready to start asking for quotations, there is still quite a lot to be learnt about the potential suppliers on your shortlist and that's what Adrian and Sofeast's CEO, Renaud, get into in this episode.

Show Notes

00:00 - Introduction and why getting quotations is a helpful part of the vetting process.

02:39 - When is the right time to start discussing pricing with a potential supplier and what can we learn from their prices? There's a difference between off-the-shelf products and more unique products that you're developing new for the market. For the latter, protecting your IP is important so that your product's unique features remain confidential.

05:41 - When to discuss pricing if you have confidential IP to keep secure. The risk of IP leakage (see additional resources below) here is a real threat. A useful strategy is to only release IP to properly vetted suppliers and hold off on speaking about pricing until this has been done (this means going through the whole vetting process outlined in this mini-series before sharing product details and requesting pricing).

You may also choose to omit the unique IP from your designs submitted for a quotation at an early stage in order to get pricing back which will be roughly equivalent to the true cost a supplier can provide when they see your complete product design - this helps you gauge market rate and get an idea of which suppliers are suitable on cost.

10:47 - What you should also discuss with a potential supplier when you're in a position to request pricing. Getting pricing means sharing technical information, but you should also be asking about business terms such as payment terms, incoterm, how shipping is handled, packaging, if the supplier stores your products in the warehouse and then ships them to different countries in batches, etc.

11:32 - How working with the wrong manufacturer on prototyping is a recipe for disaster. Worst case scenario for the maker of a new product is that by working with the wrong Chinese supplier on developing your product and creating its prototypes, you're effectively training them to become your competitor with your own product idea. This shows why vetting suppliers to select the 'right option' is so important.

13:47 - A summary of steps you can take to protect IP. Narrow down the right profile of manufacturer for your needs. Screen out poor candidates. For complex products and large orders, performing advanced due diligence is a must. For simpler products where changing supplier is easier and protecting IP may be less of an issue, some screening is still required. After this, have your one or two shortlisted suppliers sign an NNN agreement and make it very clear what is confidential and understand who works on it and is a party to this IP. Assure they don't share confidential IP with sub-suppliers unless they also sign the NNN agreement. Look out for telltale signs of suppliers who don't take IP security seriously, such as staff members sending important business emails from personal accounts!

18:06 - What can we learn to show us that a supplier is capable? How well does the supplier understand your requirements before quoting? Do they ask questions to get the right information that helps them provide a very accurate quotation and not surprise you with additional extras later on? You also need to make sure you give the supplier the right information to help them, though. So paying attention to what the quotation is based on (such as your quality standard, your intended warranty, etc) is a key indicator of whether the supplier truly 'gets' what you require.

25:03 - Mistakes buyers make when requesting quotations from Chinese suppliers. Negotiating a low price at an early stage before the supplier has all of the information they need may seem like you're locking a good deal, but if the supplier hasn't sourced components and don't know how long production will take, for example, price rises later are almost inevitable and will cause you a lot of trouble.

26:26 - Why doing product design and prototyping outside of China/Vietnam etc is a good way to protect IP and streamline the vetting pro...

Next Episode

The Impact Of Chinese New Year On Importers & Tips To Prepare For CNY 2021

In This Episode...

Sofeast's CEO, Renaud, and Adrian from the team discuss the forthcoming Chinese New Year holiday which is officially between Feb. 11th to 17th 2021 (CNY day is Feb 12th). We'll look into how and why this holiday has a serious impact on lead times, quality, supply chain risk, and managing suppliers; greater than at any other time of the year.

Renaud also shares some tips and strategies that importers can implement to plan and prepare for CNY, as well as mitigating risks that may arise from your suppliers.

Show Notes

00:00 - Introduction.

02:18 - Discussing what the Chinese New Year holiday, or Spring Festival, is and some of its unique features.

05:28 - What staff turnover around CNY tells you about the factory. A high turnover is indicative of an employer who has work to do with treating and/or paying staff well.

06:40 - Some problems which typically occur after Chinese New Year. If staff have left, new staff aren't as efficient which may lead to quality issues. Even new quality inspectors may not pick up problems as well until they're familiar with your requirements.

07:17 - Points of stress for importers before CNY. The pressure to clear a backlog of orders and staff starting to leave early for the holiday makes the pre-CNY period quite treacherous for importers. Orders may be delayed, quality may be affected, there is no time to rework defective batches, suppliers may not focus on future orders urgently, etc.

11:00 - The length of time that different factories may be closed for. Assembly factories will typically be closed for 12-15 days, a relatively short time. The problem is with component and material factories. These guys can be closed for up to a whole month.

12:32 - Summarising the problems and risks at CNY. Also includes shipping backlogs, where demand drives up shipping costs and there is enormous demand for quality inspections just before CNY, too, when everyone is (rightly) worried about poor quality.

13:42 - The dates for Chinese New Year 2021 and pre-CNY wind-down.

14:36 - An additional risk for importers: Supplier bankruptcy. It's at this time, the end of the year in China, that suppliers who have been struggling financially may decide to file for bankruptcy and shut down. They may or may not pay off outstanding wages and debts, but either way, it's going to leave you in the lurch. Due to the financial stresses of 2020, this could be a larger problem in 2021 than usual. Big tip: DON'T wire any advance payments for the period after CNY to a supplier just before the new year holiday.

16:31 - Preventive measures that importers should follow to navigate the CNY period securely. Plan ahead diligently, get inventory made Oct/Nov, avoid production too close to CNY due to quality issues, if things may be in a rush, negotiate with suppliers to have smaller orders made better (if possible) to release some pressure on them, arrange post-CNY orders with your supplier so they can coordinate with sub-suppliers in advance in order to get things running faster after the holiday, increase inspection work on products and components/materials pre and post CNY.

21:27 - Will CNY 2021 be any different to usual due to COVID19? At the moment, due to the very low cases of the coronavirus in China, it looks that it won't be particularly affected, unlike in 2020. However, importers should be aware that if the virus spreads due to the holiday, factories could be hampered or shut down in the new year if cases are found.

25:24 - Contingencies to deal with supply chain risks (such as viral outbreaks). Keeping some extra inventory if possible, having more than one supplier per product gives a safety net and this even better if they're located in different areas of China or even different countries (such as one in China, one in Thailand), suppliers can hold some stock or components, etc.

27:48 - Risks other than a pandemic to be aware of. This could be a fire in the factory that puts them out of action, financial problems causing them to go out of business, having IP stolen, disastrous manufacturing and quality issues, and more. Importers would be wise to consider arranging a backup supplier. Plan ahead and have a risk-based approach to cope with risks that you rank from worst to least if they should happen.

Extra information you may find helpful

Renaud wrote about how to manage issues caused by the holiday here: Chinese New Year: how to manage the disruption?
You can learn more about the CNY festival itself, dates, etc, from this handy page: Chinese New Year – China's Grandest Festival & Longest Public Holiday
There are a number of really great posts from Renaud about supply chain r...