How to Deal With Failed Quality Inspections: A 5 Step Plan

When importing products from Asia, the question is not if, but when you will receive a quality inspection report with a big red FAILED on the first page. In this article, you will learn how to properly react and handle these scenarios.

Content Overview

1. Are the quality issues really that serious?

2. Provide a corrective action plan to your supplier

3. Don’t let your supplier getaway by only solving the identified defects

4. Book a follow-up quality inspection

5. Don’t wire the balance payment until all quality issues are sorted

1. Are the quality issues really that serious?

Professional quality inspection agents tend to classify every little thing as defective. That’s a good thing, as the inspector makes assumptions about what you consider to be classified as a defect.

That said, I’ve seen countless ‘failed’ quality inspection reports based on very minor quality issues such as loose threads and other little things that the buyer really cares about.

When (because it happens to everyone) you receive a failed quality inspection report, your response to the supplier must be measured.

Example A: Minor issues (1 - 2%)

Inspectors always find minor things such as marks and some dust here and there. This can also drive up the defect rate quite a bit, as everything has to be reported - unless they’ve been instructed not to.

These scenarios don’t necessarily require a re-inspection, but let your supplier know that they should fix it before shipment and do a better job next time.

Don’t let your standards slip, because your supplier may follow.

Accepted defect rate

Most suppliers have an accepted defect rate set between 0 to 1%, depending on the type of defect. Keep in mind that you cannot request any compensation if the defect rate is below the accepted defect rate.

How to avoid false alarms

It’s essential to provide your quality inspection partner with design drawings, technical specifications and clear definitions of how you classify defective products. As said, professional inspection agents report even the smallest issue as a defect, which can also trigger a ‘failed’ result - even if that’s not actually the case.

Example B: Serious defects (10%+)

When you encounter “real” quality issues, be it cosmetic or functional defects, you need to inform your supplier using a corrective action plan as soon as possible. Keep in mind that the actual defect rate may in fact be higher, or lower, than what’s reported in the quality inspection report.

That said, you should not panic or resort to angry email rants as that doesn’t actually help you in resolving the quality issues.

2. Provide a corrective action plan to your supplier

The only thing that really matters at this point is identifying the root cause of the quality issues and defects. It’s very common that quality issues and defects are caused by incomplete or misleading product specifications, which result in misunderstandings between the buyer and the factory.

Here are some examples:

1. Incorrect colors
2. Incorrect materials
3. Incorrect dimensions
4. Incorrect components/li>
5. Incorrect logo prints or missing prints

As such, you must go back to your product specification to find out if the documentation you’ve provided to the supplier is clear. Nothing is to be taken for granted in the world of manufacturing, even though things may seem obvious from your perspective.

Supplier neglect

Sometimes, even the best supplier is just downright sloppy. Here are some common examples of quality issues caused by supplier neglect:

1. Dirt
2. Scratches
3. Marks
4. Functional defects/li>

What you must include in a corrective action plan

The purpose of the corrective action plan is to both identify the root cause of the quality issue and also present a technical solution. I recommend that you prepare a simple PDF including the following:

1. Incorrect colors
2. Description of defect
3. Recommended solution
4. Timeline/li>

Keep in mind that a corrective action plan doesn’t cover quality issues caused by incorrect or vague product specifications, such as materials or colors.

Repair or make a new product?

Also, note that some quality issues cannot be ‘fixed’ and require that completely new units are manufactured. This should also be clarified in your corrective action plan.

3. Don’t let your supplier getaway by only solving the identified defects

Quality inspections rarely cover every single unit in a production lot. Instead, visual inspection and other tests rarely include more than 120 to 140 units, when it comes to consumer goods. As such, the quality inspection report only show a cross-section of quality issues.

In reality, however, it’s extremely unlikely that the inspector was unlucky enough to pick every single defect. There are, in other words, many other defective units still packed in the boxes - yet to be found.

Example

1. Total order volume: 5000 pcs
2. QC sample volume: 120 pcs
3. Number of defectives: 12 pcs
4. Estimated defect rate: 10%/li>

Assuming the actual defect rate is 10%, as indicated in the example above, we can, therefore, assume that as many as 500 pcs are defective.

This also leads me to my point.

The problem is that many suppliers only bother to fix the 12 pcs your quality inspection agent identified, while not making any effort whatsoever to identify and replace the remaining 488 defective units.

This is why you must instruct your supplier to audit the entire production lot, to ensure that the next quality check is not another failure.

4. Book a follow-up quality inspection

It’s absolutely essential to book a follow-up quality inspection in case the previous inspection identified serious quality issues. Further, your supplier should be made aware of this, as a way to force them to make an effort and weed out all remaining defective units and implement the corrective action plan.

That said, you must also give your supplier sufficient time to take all corrective actions before your QC agent shows up again.

5. Don’t wire the balance payment until all quality issues are sorted

Once you wire the balance payment, it’s game over. It doesn’t matter how well you think you know your factory - you will lose all your leverage once they're paid in full.

I repeat, don’t pay the supplier until you see PASS on your quality inspection report - and let them know this.