Quality audits can be very helpful to evaluate new suppliers and mitigate several types of purchase risks. Hire a reputable inspection company to avoid risks.
While analyzing a potential supplier, we often get impressed by the pictures found on their website or the product samples that match our requirements. If you are a purchaser and decide to work with a supplier based on these factors ignoring their production capabilities, you are doing a blunder.
Spending time detecting and fixing defects after they appear in your product is the last thing you would want to do. However, it is often difficult to evaluate your supplier remotely. That’s why you need a third-party auditor who will conduct a quality inspection being present on the ground. For example, if your business is based in Philippines you should look for quality control companies in Philippines that will gather accurate, detailed information about a supplier through on-site investigation.
Purchase risks that can be avoided by quality inspection:
As buyers, the priority is always finding the best price for goods without compromising on their quality but they often lack the time, money or expertise to evaluate the capabilities of a supplier. The quality control company in Philippines can be your quality inspection partner who will perform an audit on your behalf so that you can be assured of your supplier before working with them.
So, what risks can be avoided by an audit?
- Legal issues:
Illicit practices or poor legal standing of the supplier’s operation can not only damage your brand image but lead to huge financial repercussions. Factories can be shut down unexpectedly, your goods can be confiscated by Government or custom officials, ethical violations can trigger your loyal customers to boycott your brand, even retailers might refuse to stock your goods – all these legal risks can have a grave consequence about which the factory representative might not tell you. A comprehensive audit can give you a clear idea about the factory’s legal standing by going through online databases, verifying their legal documents including business license, export license or checking for social compliance issues.
- Financial issues:
Working with an unverified supplier can expose you to huge financial risks. Financial scams can happen in many ways. Suppose, you have transferred money to your supplier’s account, but they claim they haven’t received any. Or, after paying a deposit for an order you come to know that the factory is abruptly closed or worse, sending money to a company that has no record of existence. That’s why it is very important to review their financial records. Reviewing supplier’s financial records is part of the audit to avoid these risks. An audit can also reveal the current production flow of the supplier as this information will give you a clear idea of the supplier’s overall financial health. If a factory has a few or no active customers, they are likely to close without notice giving you little or no scope to recover your money. Effective inspection throughout the production processes and operations can also reduce the production cost significantly.
- Production issues:
Shipping delays can cause losing business and damage your reputation. If your customers don’t receive the goods on time, they might refuse to give you full payment or charge you back for late delivery. Many a time, suppliers miss deadlines for their internal processes or disorganizations. Inappropriate maintenance logs or missing production records might cause missed shipment deadline. Reputed quality control companies in Philippines can evaluate your supplier’s quality management system following a standard audit checklist that can reveal a lot about the supplier’s internal processes along with additional information about adequate warehouse space, presence of internal labs, research and development facilities etc.
- Quality issues:
Defective shipment can lead to a huge disaster. The severity of quality risk depends upon product type and the level of defect. A quality product cannot be produced without quality materials or parts. So, do not negotiate for too low a price as this can lead to serious quality compromise. Quality issues might arise from limited quality control in the factory. Is there an independent QC team other than production line staff? Is the record of the product changes maintained properly? Is there any sampling plan? A systematic audit will reveal potential quality problems by evaluating their internal quality check procedures and let you address them in advance.
So, quality audits can be very helpful to evaluate new suppliers and mitigate several types of purchase risks. A reputable third-party inspection company can provide you with a robust analysis of purchase risks that will help you to determine the best suit for your supply chain.
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