Everything You Need to Know About Third-Party Quality Audits

In global commerce, a third-party quality audit – one that’s completely independent of your supplier – is one of the best ways to minimise the risks of each transaction.

Defining Third-Party Audits
Unlike first- and second-party quality audits, an autonomous team of auditors -- with absolutely no connection to your supplier -- performs the audit. These auditors assess your product based on a set of pre-determined standards of quality (for example ISO 9000 or anything you specify) and consequently issue a certification of compliance upon completion of the procedure.

There are four types of third-party quality audits auditors use for evaluations, and each one examines a different facet of the product.

Product Audit - A product audit refers to a detailed inspection of the finished product before it is delivered to the customer. The term “audit” is a bit deceptive in this case since it’s more like a quality inspection.  By doing this correctly you will ensure the product you pay for is what is delivered!

System Audit - The quality system audit is just as it sounds. It analyses the various components of the production system, including how it’s used, who uses it, when it’s used, where it’s used, and why it’s used. Auditors take a comprehensive look at how these puzzle piece fit and work together to produce the product.

Process Audit - While a system audit is typically broad in nature, the process audit goes a bit deeper. It intricately assesses the nuances of the system. A process audit verifies aspects of the production process, such as the machinery, people, and materials involved.

Compliance Audit - During a compliance audit, auditors scrutinize your specified work instructions, contracts, obligations, and procedures associated with the product, and then compare them to what’s actually being done during the production process.

Selecting the Right Auditor
A third-party audit can be extremely useful in helping foster growth and improvement within your supply chain. Selecting the right auditor or audit team isn’t as cut and dry as calling a big brand or asking your supplier to recommend one.

First and foremost, you need to decide if you want a global auditing partner with international experience or one that’s local. If you’re searching for an auditor in your region, find a provider that specializes in your area of business. An apparel auditor isn’t going to do you any good if your company purchases drill bits. It’s also important to review the auditor’s previous work and check their references to ensure their expertise and credibility. Regardless of the type of auditor or firm you choose, make sure they provide advice on creating an inspection process your organisation can use after the audit is complete.

Getting an Audit Edge
If your company needs assistance in locating a qualified auditor or firm, Mawson Global has local knowledge on inspection agents who can meet your organisation’s unique needs. We are experts in global commerce with more than 70 years of experience in the field. We understand the importance of providing the highest quality products possible, and we are committed to helping you achieve that goal.

Tackling the Issue of Quality Fade

Quality fade is all around us, but many businesses and consumers don’t always know how to recognise this concept or know what they should call it.

Around the world, we’ve all been exposed to situations such as recalls for unsafe food products, cars with safety problems, dangerous toys, electronics and gadgets that break within days. Not to mention the buttons that fall off clothes on the first day or the zip that breaks in 48 hours after purchase.

This is ‘quality fade’, which describes a supplier systematically downgrading the quality of the products that a foreign buyer has contracted them to manufacture, in order to boost their profit margins.  Quality fade and the escalating business greed that drives it has become a significant issue for importers sourcing products from highly competitive low cost manufacturing countries, which notably include Vietnam and China.

Mawson Global experts regularly work with foreign companies who recognise they need support and assistance in establishing relationships with quality manufacturing partners in emerging and industrial countries.  Many of our clients have encountered deliberate quality fade problems in previous business dealings, with the excellence of early product runs and customer satisfaction frustratingly replaced by quality problems, customer complaints and lower sales over time. 

Sometimes quality fade issues are just annoying nuisance, but for other products such as foodstuffs or vehicles, profit-driven cuts pose a real risk to consumers’ health and safety on the other side of the world.

Unscrupulous factory owners will continue cutting quality and cost corners until confronted or exposed.  This is a common problem in China, with shrewd suppliers proffering plausible enough excuses if questioned, aware from experience that many international buyers will shrug off a small problem, believing it was simply a mistake.

We can introduce you to trusted suppliers who are serious about quality, helping you to develop a reliable long term manufacturing partnership. We provide advice on negotiations to achieve clear outcomes based on agreed specifications, structuring contracts before production starts that protect both parties; and on quality control steps which include setting up inspection procedures and standards.

We will advise you to save yourself future trouble and money by independently checking the factory before entering a working relationship.  Always work within formal contracts to avoid potential issues that often arise from more informal arrangements, which are found to be unenforceable in the manufacturer’s country. We recommend using a third party auditor regularly, or if you start to be aware of quality fade issues with a supplier.

Your contract with a manufacturer must specify that they take responsibility for product quality control, including catching defective products before they leave the factory premises and accepting liability for handling any quality problems post-sale. 

Over time, it is critical that foreign buyers maintain a close watch on product quality, to avoid the headaches of quality fade problems that increasingly impact your resources and bottom line. 

After-Hours Business Entertaining in Asia: To Karaoke, or Not to Karaoke?

When you’re traveling for business in Asia or any part of the world unfamiliar to you, it’s wise to be familiar with local customs regarding business entertaining.

You may be invited by suppliers, customers, and associates to meet after hours – in a more informal setting than daytime meetings. These interactions are equally important as daytime meeting in forging business relationships.

Hosts are usually appreciative of visitors who demonstrate knowledge about their culture, as well as the ability to converse in his or her language, so make an effort to do both. The following is a quick guide to navigating after-hours business functions.

Dining
In Asian countries, seating is very important at a formal meal, and guests should wait to be seated by the host to avoid being disrespectful. It’s also polite to try everything served during a meal. Take a bite of each dish – even if it seems unappealing – and be sure to give your compliments to the host.  If you enjoy the meal, eat up -- a clean plate is a good thing in Asian countries! However, be aware that your host may insist that you keep eating, even if you are full.

Karaoke
Karaoke bars are a common form of entertainment in Asian countries. If your host suggests visiting one and you agree, be ready to participate! Agreeing to go to a karaoke bar means you are willing to sing!  Men often receive unsolicited attention from women in these establishments. Be aware that most of it comes at a price to you or your host. Remember, you are there on business; have fun, but conduct yourself in a professional manner.

Drinking
Alcohol is an important part of building business relationships. If you don’t drink, politely inform your host in advance. Toasts are a big part of Asia’s culture, so if they are offered, it’s polite to take part. You may also ask your host if you can offer a toast to them and the success of your relationship.

Navigating Business After-Hours
If you’re working on forging business relationships in China or other Asian nations, Mawson Global can help with every aspect of the endeavor -- from efficiently arranging flights, hotels, and other transportation to advising you on the proper way to deal with businesspeople.

Mawson Global has representatives on site who are familiar with local businesses and industries. We can help you and your company forge new overseas relationships – and even suggest a karaoke song or two!

Is Global Sourcing Right for You?

Are you considering global sourcing for your business or your clients? Wondering what your first steps should be?

Mawson Global’s mission is to make international growth simple and attainable for all companies, regardless of their size or budget. Quite simply, we connect you with suppliers and partners across the globe, to help you increase profits, improve efficiency, and strengthen your overall business. No matter what products you need, we aim to find a reliable, more affordable overseas supplier for you.

Most Mawson Global clients save at least $100,000 on their first projects, and their savings are typically between 40 to 70% of domestic prices. At last count, Mawson Global clients have saved almost $20 million using our global sourcing services.

Our clients come from a wide variety of industries and companies, with varying sizes and revenues. But they do share some common characteristics:

• ·         They buy products not manufactured in the domestic market.
• ·         They spend more than $50,000 with any one supplier.
• ·         They are planning to purchase plant and equipment worth more than $50,000.
• ·         They are a company’s owner, CEO, COO, or CFO.
• ·         They are prepared to spend $7,000 to save $75,000!

Mawson Global is confident that we can assess your potential cost savings without disrupting your supply chain. We are not broker-agents; our services are fee-based, and we work without taking a commission. Our research and advice are also completely independent and unbiased.

We have professional teams based in a number of countries to help businesses around the world safely minimise any risks inherent in global purchasing.

Want to know if Mawson Global sourcing is right for your company? Take our 10-product challenge. We’ll ask you to tell us five to 10 products that you now buy from an importer, and then we’ll work to find those items from a cheaper international supplier.

Now is the time to find out if global sourcing can help you grow your business. Contact Mawson Global today!

A Can’t-Miss Event: The 2013 Canton Fairs

The China Import and Export Fair, also known as the Canton Fair, is the oldest and most comprehensive trade event of its kind. It’s a showcase of more than 24,000 of China’s corporations. And it’s something your company may want to attend if it’s interested in partnerships with Chinese suppliers.

The Canton Fair is held each spring and fall in Guangzhou, China and includes a broad array of foreign trade companies, manufacturers, research institutes, private organizations, as well as foreign-invested and wholly foreign-owned companies. Since its inception in 1957, the fair has become a platform for the movers and shakers of China’s import and export industry.

“Canton Fair is an important window of China's opening up, a vital platform of foreign trade, and also a starting point for the transformation of foreign trade development mode and the adjustment of structure,” said Liu Jianjun, spokesman for the Canton Fair and director general of China Foreign Trade Centre during the November 2012’s opening event.

The fair is an excellent way to get an appreciation of just how many products you can source from China.  If sourcing products direct from Chinese suppliers is on your radar for this year, or the near future, you should seriously consider making the trek for this biannual event.

While the fair is a great showcase we do not recommend it as the place to source long term supply partners as most of the exhibitors at the fair will be commission agents and distributors.  So visit the fair to get ideas and contacts then make sure you do your homework on the suppliers you intend to trust your business success with.

Navigating the Canton Fair and travels through China can be a challenge, especially for those who’ve never been to the country. Mawson Global can provide support before, during, and after travels to the country to companies in need of assistance. We can also act as a liaison during the fair and ensure your organization finds a long-term supplier, rather than a short term agent.

For more information on Mawson Global’s travel support services, as well as sourcing assistances, please visit our website or call 1300 723 246.