The extended logistics of most manufacturing processes, however, can make this a daunting task.

There are simply too many steps in the supply chain of most products made today to assume that having an eye only on the factory floor will guarantee quality. Due diligence requires both the buyer and manufacturer to identify the key steps in the entire top-to-bottom process
of procurement, manufacture and delivery.

These, then, become the focus of product quality establishment, monitoring and ongoing improvement.

“Because China is such an important supply network, it is becoming crucial for us to ensure that risk abatement measures are in place,” said Vincent Sung, sourcing/audit manager for Otto International, a buying organization for more than 30 mail-order and retail companies.

“Our company is committed to ensuring that the products we buy here in China meet the quality and safety standards that our consumers demand,” he added.

By far, the majority of suppliers in China have no intention of cheating their buyers on quality because it is not in their best long-term interest to do so. They achieve higher profit margins and often have lower costs when working with repeat buyers. Suppliers also know that in China’s hypercompetitive manufacturing environment, a single mistake on quality could prompt the buyer to switch to another supplier. Makers would then lose the security of those consistent and reliable orders that allow them to lower the risk of operation, expand their factory with confidence and purchase the new machinery to achieve a move up the value chain.

This does not mean buyers should forego factory visits or inspections, but it does mean that in most cases, suppliers and buyers actually have the same goals.

The data supports this view. Exports from China to the US have increased to the point that they are on track to surpass last year’s record $287.8 billion, according to US customs statistics. In the first half of 2007, shipments to the US grew by 17.8 percent, while goods bound for the EU went up by 30.2 percent. These numbers would not be so dramatic if a quality problem were pervasive.

Not only is export volume increasing for many products. Export value is rising as well—often at a faster rate. Although this reflects in part the increase in costs associated with manufacturing, such as higher raw material prices, it is also an indicator that the level of product quality is on the rise.

“China truly is an excellent supply market, especially when you consider the combined factors of experienced suppliers that can handle small and large volumes, an established logistics network that is already sending exports around the world, and a rapidly improving infrastructure,” Sung said.

Still, the simple fact remains that a small number of suppliers have exported products that have been substandard and potentially dangerous to consumers. But it is the buyer, whether manufacturer, retailer or agent, that must bear the full legal responsibility in such situations.

This is because it is the buyers that derive their profits from meeting the design, price and product standards appropriate for consumer groups in their specific markets. Therefore, they must ensure that the products they bring into their country are safe.

This is not a new issue. The same situation occurred decades ago with Japan-made products and more recently with those from Taiwan and South Korea. These manufacturing hubs eventually moved up the value chain, just as mainland China is trying to do now.

There are many approaches buyers can take to ensure that standards are being met, varying from having quality control staff operating in the manufacturing country to relying on third-party inspection and testing services. Smaller buyers may simply make their own inspection trips and trust in large part on the goodwill of the suppliers they work with.

If executed properly, and perhaps with a bit of good luck, all of these options can be effective. It helps greatly, however, if the supplier is a willing partner to the process.

Working with the right suppliers
The best way to ensure that product safety and quality standards are met is to choose the right suppliers.

Finding and working with manufacturers that understand the buyer’s needs, communicate any questions clearly and early in the process, and are willing to assume some of the responsibility of the buyer as part of their own internal processes will go a long way toward ensuring that problems are solved as soon as they come up.

Many suppliers in China are doing just that. They have realized that competing only on price in an environment where raw material and labor costs have increased, and the yuan has risen in value, is a dead-end proposition. More and more companies are learning that quality improvements and better service to buyers can be key differentiators between themselves and competitors.

This mindset has taken strong root among a growing percentage of China’s supply base across all industries, and it is these types of quality suppliers that buyers should look for when seeking a manufacturing partner.

Companies such as Cosonic Electronics Co. Ltd, a manufacturer and exporter of wired and wireless headphones based in Guangdong province, see their responsibility with regard to components and materials as more than just meeting the specifications and requirements of buyers. It extends to creating a system where the buyer can feel secure that components and materials will be up to standard even when inspectors are not visiting the production facility.

“We know that key component sourcing is critical for the buyer, so we have developed a strict system for selecting and monitoring our suppliers that involves constant reviews and ratings,” said Lei Ming, vice general manager of Cosonic, which supplies to IBM and Samsung.

“This control is in place regardless of whether the buyer or a third-party agency conducts inspections,” he added.

High quality does not necessarily result in high cost. It can also be achieved through design. “With better product design and manufacturing, management costs can actually be lower,” Lei said.

That is a tremendous incentive for suppliers to try to move up the value chain and is one reason more China suppliers perceive quality as a preferential option to price competition.

Trend for in-house testing
In addition to ensuring that component sourcing is properly managed, suppliers in the high end try to offer services beyond simply meeting the specification of an order.

Dongying Xinyi Automobile Fitting Co. Ltd, a major manufacturer and exporter of brake pads, shoes and drums based in Shandong province, has created its own testing system for prototypes and new products to detect defects. The company offers the service to its buyers.

“We do our own tests, such as on service life and performance, to find defects in a buyer’s product,” said Jin Xin, the company’s overseas sales manager. “We then communicate with our customers and give them suggestions on how to improve the product. The buyer can then incorporate the changes or stay with the original product based on his own needs.”

Ningbo Kingway Stationery Co. Ltd, a Taiwan-invested company based in Zhejiang province, also offers suggestions and recommendations on its buyers’ designs and requirements as a part of its service.

To maintain quality and attract upscale buyers, however, the company focuses mainly on providing the basic buyer services, but doing so more efficiently.

“The cost involved in solving problems associated with low-end products is usually higher than that of making a better product,” said Natalie Wu, sales manager at Ningbo Kingway. “Therefore, we refuse to work with buyers that want cheap items of extremely low quality. Instead, we try to work only with buyers in the midrange and high end. We do basic things such as ensure that the product and the goods we deliver are exactly the same as the confirmed sample.”

Wu said Ningbo Kingway can attract and retain these types of buyers because it ensures that expectations are clear from the start of negotiations and that there are no surprises.

CATIC Shenzhen Co., one of China’s largest exporters across a range of products, takes a similar approach to showing buyers that it is a high-quality supplier.

“We think the most important thing is to have clear communication with the buyer before manufacturing begins so we can discuss all of the possible problems and try to solve them together,” said Lin Junli, a director in the Home Product Division of CATIC.

“We then produce exactly according to the agreement. By working in this manner, we receive stable orders that help the long-term development of our company. This type of stable relationship helps us make decisions for our future development,” Lin added.

Konka Group Ltd, one of the largest television makers in China and an exporter to 90 countries, takes a more holistic approach.

“We feel our responsibility to our buyers must be comprehensive,” sales manager Feng Weibing said. “It starts with our internal quality control and parts and components supply chain, and extends through manufacturing, certification, exporting and after-sales service.”

Making the most of third-party services
Although finding and working with China suppliers that understand the value of buyer service and quality has become easier as more companies move up the value chain, buyers must still rely first and foremost on their own quality control procedures.

Third-party inspection and verification services can play a large role in helping manage quality, depending on the buyer’s organization setup and needs in China.

With more pressure being put on buyers to meet product safety and quality standards, and environmental and social responsibility requirements, third-party service providers are playing an expanded role in China’s manufacturing environment.

“Buyers can use independent third-party providers to cost-effectively plug just about any hole they may have in their quality and risk management planning,” said Michael Lavergne, director of account management in Asia for Bureau Veritas Consumer Product Services, one of the best-known and most-respected third-party certification and inspection services with global operations.

“This has allowed importers worldwide more flexibility in how they want to structure their buying operations in China and beyond, while still meeting their responsibility of ensuring a strict quality and risk management process in tandem with their suppliers,” he added.

Supplier capability assessments, social accountability and environmental audits allow buyers to confirm that the suppliers they have chosen meet the criteria they are looking for in a partner.

This is in addition to general factory accreditation, such as ISO, that a maker may have received from an agency such as Bureau Veritas.

Even though supplier capability and services continue to improve in China, these audits can provide a measure of security to the buyer that no basic internal supplier issues will come back to haunt them once a product is on the shelves in their home country.

After the supplier is selected and an order is made, the third-party service providers can step in at just about any stage of the process where the buyer does not feel he already has adequate coverage or where outside technical expertise can add value. This can begin as far back in the process as product development testing or can start with inspection of raw materials, either at the provider’s facility or as the material is received at the factory.

Third-party agencies can then continue the service through engineering services and assessment ofthe production line setup, inline inspections and testing as the product is being made. There are also preshipment checks and container loading supervision.

Where lab testing is required, established third-party providers also count on their own network of self-owned and partnership accredited laboratories.

“Buyers today are under intense pressure to ensure that products they purchase from China meet both the high standards their consumers demand and newly enforced export requirements of the China government,” Lavergne said. “Whether through third-party service providers such as Bureau Veritas, or by setting up their own inspection operations in-country, there is no getting around the fact that buyers need to have someone on the ground working in partnership with their suppliers, and checking not only the products but also the entire quality assurance process.”

While buyers will certainly look at the options for quality control based on their overall business strategy, it has become clear that the choices for obtaining quality products from China are improving steadily.

As more suppliers develop their capability, buyers are finding a broader selection of manufacturers that can meet their quality requirements. As these suppliers also move up the value chain by providing more services, buyers are finding that their supplier partners can assume more of the responsibility with regard to quality procedures. Where buyers need on-the-ground support, they can receive it from third-party service providers at nearly every step of the design, production and delivery process.

Global Sources services

Comprehensive search results and verified suppliers
In today’s Internet world, finding China suppliers online is easy. The problem buyers face is having to visit dozens of online marketplaces and filter through millions of websites to find exactly the right suppliers to meet their specific requirements.

To solve this problem, Global Sources has launched Global Sources Online 2.0, a next-generation B2B marketplace, offering buyers comprehensive search results and verified suppliers — all from a single site.

Verified suppliers for quality-conscious buyers
To find the quality partners that buyers are looking for, they turn to Global Sources for verified suppliers. Here’s why:

In-factory visits — Global Sources visits each featured supplier personally — three or more times — before offering them to buyers on Global Sources Online, in Global Sources magazines and China Sourcing Reports.

Financial commitment — Verified suppliers pay the highest rates in the industry to join Global Sources’ community — a clear indication of their commitment to export.

Strict verification — Our 200-strong Client Service team works closely with each supplier. It employs strict QC processes to verify every supplier detail possible before delivering it to buyers.

Third-party Credit Check & Capability Assessment Interested verified suppliers may also provide buyers further assurance as to their credibility. They can do so via Credit Check, offered by Verify, a leading credit authority, and Supplier Capability Assessment, provided by the well-known Bureau Veritas.

Comprehensive search results
The new site gives buyers comprehensive supplier and product search results comprising Global Sources Verified general results from the entire World Wide Web. Global Sources Online 2.0 allows buyers to quickly find quality, verified suppliers — and compare them with others online — all from a single site at www.globalsources.com.