China Potential Savings
How much can I expect to save by moving production to China?
There is no set formula but there are general rules that apply. Labor intensive products made of readily available materials offer the greatest savings. Products with specialized materials which need to be imported into China may not encounter larger price reductions by moving overseas. Other major issues to consider are shipping and duties.PassageMaker looks at the total supply chain, door to door, to ensure all possible savings are achieved.
In one instance for example, we reduced the cost of a complex toy from $122, to $18!
How do the labor rates at PassageMaker’s assembly center compare to a typical Chinese factory?
PassageMaker recruits staff from the same labor pool as local factories. But PassageMaker brings the following benefits to the table:
- An industry leading Product Quality System ensures expectations for quality are achieved and every product assembled by PassageMaker comes with a warranty. We are IS0 9001 registered and compliant.
- Trust & Transparency: The client’s has full visibility into the identity and pricing points of suppliers and sub-suppliers. Protecting intellectual property in China and respecting other sensitive client information is paramount. PassageMaker will not unilaterally make changes (sub suppliers, raw materials, testing processes, equipment) to the supply chain and assembly process.
- PassageMaker’s China-based account managers speak the languages our Clients speak and serve as a single point of contact for the client in Asia.
- PassageMaker is in full compliance with local, national and applicable international standards for corporate social responsibility including workplace safety and environmental protection. You would be surprised how many factories dump scrap out their back door. We don’t!
- We respect our employees.
- Every single employee enjoys a profit share system which is based on the individuals KPI (key performance indicators) and corporate performance.
- Overtime is not abused
- Dorms are comfortable
- Freedom of association
- Skills training system in place
- Non-discrimination. Hiring based solely on the basis of their candidates ability to do the job. We do not discriminate on the basis of age, gender, racial characteristics, sexual preference, maternity or marital status, nationality or cultural, religious or personal beliefs
If you care about sustainable sourcing, reliable quality, workplace safety and your brand’s reputation then PM is your ideal partner. If you want a widget assembled at the lowest price possible then PM is probably not the ideal partner for your project.
What about tooling charges or mold set up fees?
Generally speaking, you can expect tooling to be used in production runs in China or back home to be significantly less than rates in the US or Europe.
The differences in tooling for domestic use and tooling for export are explained in the next FAQ below. Generally, the more expensive the tooling back home, the greater the savings that can be expected in China.
During the Request for Quotation (RFQ) phase, it is essential to pay close attention to the tooling costs in addition to the unit price. It is not uncommon for “tooling hustlers” to give a great unit price to get your business, only to find out later that the tooling cost has been inflated. Proper research will identify not only the best unit price at a national level, but also what is the going rate on the required tooling.
Many parameters can affect the price of the given tool & die or mold. Take plastic injection mold tooling for example. Chief among these parameters are:
- Required tool life
- Number of cavities
- Core and cavity insert material
- Complexity of the product
- Product size
- Runner system
Can the Chinese tooling be transferred to the USA (or other non-China locations)?
Tooling that has been built for production in China is generally not intended for export at a later time. The foremost reason for this is that the tooling would not have been initially designed for use on the customers’ injection equipment and the tooling may not even fit. Also very important is the fact that the tooling will not have been built to Export standards.
Many of the replacement parts (ejector pins, etc.) may not be standard size and would have to be custom manufactured. Lower cost (and softer) Chinese materials may have been used in construction, reducing the life of the tool.
Hose connections may not mate with your overseas machinery and inlets/outlets, if marked at all, may be written in Chinese.
If the customer has any future plans to move the tooling to the US at some later date, it is very important to specify that in the beginning before production begins. Please visit our Tooling and Mold Making page for more details.
PassageMaker Services & Pricing
How is PassageMaker different from a virtual office or co-work space?
PassageMaker is not a virtual office or co-working space. At PassageMaker we actually hire and manage the team assigned to your project. All visas, taxes & labor contracts are carried out in full compliance with local regulation.
Serviced offices, virtual offices and other shared forms of workingspace are readily available in most major Chinese cities. They are found in high end office buildings as well as low rent districts. Virtual offices are a great option if you need to house a team for a short period of time on a project basis. But keep in mind that virtual offices are not allowed to hire staff nor do they supervisor the workload nor can they organize payments to Chinese entities on your behalf. They simply provide physical space and internet connection. The legal status of your team is also very much in a gray area when based in a virtual office. This article explains the legal and managerial challenges of using a virtual office to house your team: Is hiring a freelancer legal and safe in China?
When does it make sense to hire PassageMaker for "Factory in a Factory" vs "Joint Venture"?
Joint Venture Manufacturing in China(Dedicated Factory Building). Client has steady orders which require more than 50 full time workers and/or more than 1000 sq. mtrs of production space and/or a strong desire to legally own the means of production.
How is PassageMaker different from a sourcing agency, contract manufacturer or trading company?
Does PassageMaker receive a commission from suppliers?
We do not accept commissions, bribes or kickbacks from suppliers. We are not a factory representative steering the client towards a pre-selected vendor. To the contrary, we are a buyer-appointed China sourcing agent that is looking out for the best interests of the client.
Is PassageMaker worried it will be cut out of the China supply chain if buyers deal direct with sub-suppliers?
No. We provide value in the form of efficient production management, assembly, and QC that saves time and money for both the buyer and seller.
Our clients realize that our fees are easily covered by the savings generated through proper supply chain management and QC.
Furthermore, the costs of setting up their own sourcing office or hiring the staff to deal direct with the factory would far outweigh our service fees. Actually, in some cases our goal is to help the buyer “ramp up” production in China and put them in a position to deal directly with the suppliers on their own if desired. Our trust and transparency allows for this scalability.
The factory is happy to have PassageMaker involved as we help them communicate effectively with the buyer and offer advice on how to best service the customer.
How can PassageMaker be of assistance if I already have a China supply chain?
PassageMaker can supplement a customer’s existing China supply chain with quality control, assembly and packaging. The customer may also find it beneficial for PassageMaker to identify price points from other suppliers for negotiation purposes with your current vendors.
Why should I disclose my target price to PassageMaker during the supplier identification research?
In China, there is a wide range of quality among various vendors for any given product. By knowing the customer’s target price, we can work to find the best quality in that price range. We do not disclose customer target prices to suppliers.
What should I know when comparing PassageMaker’s service fees?
If you are concerned about price, security or quality then it is essential that you clarify the compensation structure to your service provider. Here is a look at some of the tricks used by intermediaries (a China sourcing agent, trading company, factory representative, consultant, broker.) to hide true interests and compensation.
Beware of these Tricks!
- Trick #1If they are compensated by the supply side then their interests are aligned with the seller not you the customer. You would be surprised by the number of sourcing agents and trading companies whom claim to be buyer representatives yet receive kickbacks and commissions from the vendors.
- Trick #2If your service provider is not the actual factory and gives you a final price per unit without disclosing the actual margin, then most likely you are paying too much. They justify a margin by saying that their value comes from “having done the work to qualify the sub-suppliers or leveraging group buying power or providing project management services”. But if they are afraid to state their actual margin then they know the services provided don’t justify their mark up. Furthermore, if they do not disclose the actual manufacturer, then you have no way to validate the quality process in place and you have lost control over who has access to your intellectual property.
- Trick #3If on their website they don’t clearly state their fee structure, then they may not be confident in the value they provide to your China supply chain. Worse yet, it may indicate they don’t have the required China sourcing experience and are unsure how to even price their services. One trick they use to mask their lack of a well-defined service and value is to state something along the lines of “each project is different and they tailor their services accordingly”. That really means they are trying to adjust their fees based on the how deep they believe the pockets of the potential client are rather than using a well-defined, pre-existing system based on years of China project experience. Consultants in particular use this sales technique.
At PassageMaker there are no hidden mark ups or agendas.
In cases where the client does not have existing sub-suppliers in China, PassageMaker conducts a feasibility study to identify suitable suppliers meeting your requirements for price, lead time, and quality. Visit our sourcing feasibility price section or the next FAQ answer for detailed explanation on the fees associated with this research. All pricing and sub-supplier identities developed in the initial research are made transparent to the client. The components from the sub-suppliers are then delivered to PassageMaker for assembly and inspection before leaving China.
All sub-suppliers used are pre-approved by the client as part of the feasibility study. PassageMaker does not apply a mark up to the components. We simply charge a transparent, per unit fee to perform inspection/assembly/vendor coordination services. This fee is based on the actual labor and management to inspect and assemble your given product. If a service provider can’t justify their margin by providing actual value to your China supply chain, then they shouldn’t be in the supply chain!
Full details on PassageMaker’s transparent pricing are stated publicly throughout this web site.
When considering a partner, make sure you ask about factory ownership, compensation structure, client references, non-compete clauses, quality systems, sub-supplier pricing and identity, company history, warranty terms and the plan for protecting Intellectual Property in China (click here for a behind the scenes look at common pricing scams in China).
At PassageMaker we fully understand the importance of trust and transparency and welcome any questions you may have.
Why pay PassageMaker for support when I can find my own suppliers online?
Proper supplier research exposes true pricing points, identifies qualified partners and results in significant savings for the client when sourcing from China.
Thanks to free and easy-to-use websites like Alibaba and Global Sources, generating a list of potential vendors has never been easier. But make sure you have the time, engineering and strategic sourcing experience to narrow a massive pool of vendors down to a handful of highly qualified vendors. Simply picking the first 3 vendors that come up on an internet search is highly unlikely to uncover the best match for your particular requirements for price/quality/lead-time. Vendor promoting themselves online as factories are often just trading companies.
Four more reasons:
- The cost of multiple trips (flights, time away from work, hotels, meals, local transport and translation) can be greater than the cost to hire PassageMaker. The extent of domestic travel needed to do things right is often underestimated by people who DIY.
- While our research findings are given to you in English (actually now also available in Spanish, French and Russian) but the leg work conducted in the field is done by our well trained Chinese staff. The price at which a Chinese factory quotes to a Chinese speaking buyer in China is often less that the price you and I would get if we knocked on the suppliers door directly or contact them via email.
- Chinese suppliers are notorious for exaggerating their capabilities. Our team has developed a fine tuned sense of what is true and what is BS. Furthermore, we have detailed protocols for validating what is being told to us by the potential supplier.
- Making an apples to apples comparison of supplier pricing is not always easy. Here is a blog post PassageMaker wrote on the subject: The right way to find the right supplier.
Having said all that, PassageMaker doesn’t make any substantial revenue until the project moves to production at which point we are engaged for supply chain management and/or 3rd party assembly, packaging & inspection. So from an economic standpoint, we offer the sourcing feasibility study at cost in hopes of helping the client find the right suppliers and ensure that our future supply chain management is not complicated.
Finding the right supplier up front is perhaps the single most important step in the process. But if for budgetary or any other reason the client prefers to DIY, we would welcome them back as customers if they need help with the supply chain management and such. For this reason, if you do decide to DIY, please keep the following resources in mind:
- The Essential Reference Guide to China Sourcing is based on PassageMaker’s operation manual, check lists and internal templates. Available on Amazon. This book was written by PassageMaker’s founder, Mike Bellamy, in hopes of helping small and new buyers launch their sourcing successfully.
- www.ChinaSourcingInfo.org. Sign up for his newsletter and get monthly tips and strategies for safe sourcing.
In short, we would love to be of assistance with your supplier selection, but if you prefer to DIY, please keep us in mind for on-going support once you have identified suitable suppliers.
Why hire PassageMaker to find suppliers when there are trading companies that will do it for free?
Some companies will offer to conduct the initial supplier identification for free. However, while it sounds the most attractive at first, nothing is done for free in Asia and quite often the “for free” model is the most expensive in the long run. As explained on the Sourcing Feasibility Study page, our team of experienced sourcing engineers will require 30-45 days and spend considerable man-hours, leveraging years of sourcing experience in vetting suppliers in China and narrow 100’s of choices down to the top candidates. If somebody offers to “do it for free” this is what may be really happening:
- They will decide which sub-suppliers to use. That means they may select the supplier which is best for them, not best for you. Most likely is it a relative’s factory or they have a kickback or commission in place. In effect the buyer is getting steered towards a supplier which may not be the best match for the buyer’s specific requirements.
- “You get what you pay for”. They don’t plan to conduct in-depth research on a national level. If someone is providing research for free, they may not be as conscientious about understanding your goals and helping to find the right supplier. Keep in mind that finding the right supplier is the single most important factor in determining if your project will succeed or fail!
- They plan to cover the internal costs of the initial research by charging you an inflated per-unit cost once production starts. In the long run, the buyer pays too much!
Insider Tips! Insider Tip #1:If your “partner” is unwilling to state the name of the sub-suppliers and give the pricing points, then you are certainly paying too much. Furthermore, if they do not disclose the actual manufacturer, then you have no way to validate the quality process in place and you have lost control over the ones who should be protecting intellectual property in China.
Insider Tip #2:Should you pay for research in China, make sure you have such a contract in place. If your “partner” is doing the research for free, then they are not obligated to do a professional job.
Aligned Interests?Unfortunately, even if you pay a company in China to conduct this supplier research you can’t automatically assume they are looking out for your best interests. (Know more about common pricing scams in China.) It is common in China for trading companies to milk both ends, in other words charge the buyer for a research fee or commission while getting a kick back or other commission from the supplier. Therefore, you must perform due diligence on your research partners as well.
When considering a research partner in China, make sure you ask about ownership, compensation structure, client references, non-compete clauses, research methodology, full disclosure of sub-supplier pricing and identity, company history, warranty terms and the plan for protecting your intellectual property.
At PassageMaker for example, by hiring us for Import/Export Management you can rest assured that we take the project seriously and will review each and every detail to ensure your goals are met. We fully understand the importance of trust and transparency, and when we are hired for supplier identification research we offer total disclosure of the above information in our contract, so it’s absolutely clear where compensation comes from and that our interests are 100% aligned with the buyer.
How do we go about vetting suppliers in China?
The single most important factor in determining the success or failure of your sourcing program in China will be finding the right supplier. It sounds obvious, but making apples-to-apples comparisons of vendors at a national level can be daunting. The following is a behind the scenes look at a how PassageMaker assists its clients find vendors in China. This system outlined below is based on the company’s 10 years of experience in China and 1000’s of sourcing programs.
A professional sourcing feasibility study / supplier identification research should have a clear methodology for defining and measuring the desired attributes of the ideal supplier.
Step One “Defining”: The “right supplier” is unique to each buyer, as the relative weight placed on price, quality, lead time and other attributes differs from project to project. Below is an attribute survey template used to transfer this information from buyer to research team.
Step Two “Measuring”: At PassageMaker a typical supplier identification research project takes 30-45 working days assuming multiple components and production methods need to be explored, at a national level. The process is as follows:
- Initial research generates a list of 50-100 potential suppliers using web directories likewww.GlobalSources.com and industry/trade show directories. At PassageMaker, the Approved Vendor List (AVL) can be consulted to see if any known suppliers should be added to the list.Insider Tips!
- Assume the vendor is a middleman until proven otherwise, not the other way around.
- Avoid factories that refuse to list the name or location of the production facility. If they only show a HK, Taiwan or other non-PRC address, then they probably don’t own the PRC factory and are a middleman of some sort.
- Focus on those factories that can clearly show production experience with your particular product or production method.
- Be aware that polished English skills do not reflect production skills. Often the most polished websites are set up by trading companies.
- Look for clear information about operation size, equipment and staffing.
- Visit http://psschina.com/resources/passagemaker-articles for related articles on avoiding middlemen when sourcing in China.
- Review the 50-100 candidates’ websites and brochures against client’s desired attribute list and narrow the field down to 15 to 20 candidates. At this point, “first contact” is initiated in the follow ways:a) Send an e-mail or make a phone call to ask for initial product-specific information (price, minimum order size, lead time).
b) Are samples available? If they don’t have samples readily available, they probably don’t deal in your product on a regular basis.
c) Granted the sales team will be the most polished in terms of English skills, but how is their understanding of your basic requests? If you ask for information on a red umbrella and get sent a sample of a blue shoe, you are going to have problems with communication down the road!
d) Confirm the actual production location and ask for ownership papers of the factory. Be explicit that the production location may be audited and that this location can not be changed w/out approval of buyer. (You would be surprised at the number of middlemen who will take the buyer on a visit of a factory only to change the location to a less expensive and poorer quality option after the buyer leaves).
- The above research should narrow the field down to about 5 highly qualified candidates. At this stage, PassageMaker QC engineers and Sourcing Managers (joined by the client when possible) visit the factories in person to review quality systems, confirm production methods, negotiate pricing and look for any red flags. In other words, visit the production facility to confirm the information given during the initial research was accurate and truthful. This is an essential yet often overlooked step by those looking to cut corners during research.Unfortunately, due to the massive number of trading companies and aggressive China sales staff who will say almost anything to get your business, visiting the production line in person (or via your appointed representative) is the only way to confirm the real situation.
- Based on the results of the factory visits, the next phase is sampling, trial order or even Purchase Order placement with the top vendor or two.
- Initial research generates a list of 50-100 potential suppliers using web directories likewww.GlobalSources.com and industry/trade show directories. At PassageMaker, the Approved Vendor List (AVL) can be consulted to see if any known suppliers should be added to the list.Insider Tips!
Visit our article section for related articles on Negotiation and Vendor Coordination
Can I manage the team in China directly myself?
PassageMaker will recruit, train, hire and manage local staff on behalf of the client. The PassageMaker management team has a successful track record managing multicultural teams and complex international projects. In most cases it is to the client’s advantage to have PassageMaker supervise the day to day activities of the local staff assigned to the project. But if for some reason the client wishes to manage the team directly, it can be arranged at a reduced service fee and the following stipulations may apply:
- The PassageMaker warranty is nullified as PassageMaker cannot be held liable for disruptions in the supply chain that may result from China-based entities receiving instructions, requests and communications from parties other than PassageMaker.
- As the legal employer of the team members, PassageMaker has legal exposure if those staff engage in illicit activities. In China, the employer can be held liable for the actions of their employees. For example, there is a case where an employee of a company was selling counterfeits online during work hours. That employee was caught by the authorities and the employer was also penalized. In order to fully comply with labor laws and minimize PassageMaker’s exposure, in cases where the client is managing the day-to-day activities of the staff, the following should be kept in mind:
- Staff will spend a reasonable amount of time in the PassageMaker office and consider the PassageMaker facility as “home base” if the staff are required to travel frequently.
- Staff will sign and respect the standard labor contract which prohibits activities outside of the labor contract.
- Staff will follow the PassageMaker employee handbook.
- A “non-intrusive level” of supervision will be granted to PassageMaker. Client will keep a PassageMaker representative informed of tasked assigned to staff by client.
Corporate Social Responsibility
Are concerns over sweatshop labor and environmental protection addressed?
We are proud that PassageMaker and its sub-suppliers are in compliance with local, national and applicable international standards for workplace safety and environmental protection.
When conducting sub-supplier identification and analysis for our customers, our research takes into account supplier compliance with workplace standards for safety and environment. Vendor Code of Conduct Standards are signed and enforced. On-going audits ensure that standards are maintained.
VAT Rebate in China
What is VAT and why should I worry about it?
VAT is one of the most confusing and often overlooked issues when purchasing from China!
At the risk of oversimplifying, in theory a 17% tax is paid at each step as the given product flows down the supply chain toward the end users. Take the example of a plastic comb. Raw plastic is purchased for injection molding, then the molded comb is sold to a beauty product distributor who in turn sells to a trading company for eventual export. When the comb is exported, there may be a VAT rebate of 0-17% (depending on the product classification) against the 17% taxes paid. Without going into the complex tax formulas, let’s say the VAT rebate in China for plastic combs is 10%. So 17-10=7% amount the stays in the government coffers while 10% goes back to the exporting company.
Overlooking the impact of VAT on your sourcing project can lead to major complications:
- If you don’t know the VAT rebate amount, then you don’t really know your vendor’s true pricing. This can complicate negotiations and vendor comparisons. The vendor may be pocketing the VAT rebate with out explaining to the buyer. To further complicate the situation, VAT and product classification can be negotiated with the local customs bureau. So basically, a vendor may tell you they are only getting a certain % back, when in reality it may be much more.
- Unlike PassageMaker, many vendor’s lack import-export rights and proper VAT processing facilities. They are forced to use 3rd party trading companies which inflate the price and complicate the relationship.
- If the order is small, vendors may find ways to avoid the VAT issue (can’t get a rebate if it wasn’t paid in the first place!) and offer a “non VAT price”. While a “no tax price” may be attractive at first, things get can get ugly when:
- you buy direct from the factory in China, but find out later you can’t export out of the country because of a lack of tax documentation.
- the volume of business grows to a point that the supplier can’t avoid putting the tax payment on their books. Just when you are expecting a price discount for a large order, out of the blue you get smacked with an increase for a tax that now all of the sudden has to be paid.
PassageMaker is in a unique position to help our customers avoid VAT issues as, according to our knowledge, we are the only US-owned Contract Assembly/ Inspection facilities to be granted full import-export rights and authorized to process VAT rebates by the Chinese government in Shenzhen.
Intellectual Property and Branding
How to ensure that blueprints, tooling, and brand names are protected?
Consider using PassageMaker’s China based Assembly / Packaging/ Consolidation Warehouse: American managed warehouse provides centralized, secure, reliable environment for in-bound QC, assembly, packaging and freight consolidation. Information is kept confidential and products are looked after in a professional manner. QC issues are dealt with before goods are shipped. Chinese suppliers are prevented from turning into future competitors and shipping costs are reduced through freight consolidation.
PassageMaker’s sourcing team manages your risk exposure should sub-suppliers need to be developed:
- PassageMaker conducts due diligence into the reputation of the potential supplier and provides a risk assessment to our client.
- During the initial stages of the research, we often divide the product into separate components and do not disclose the final use. In this way we can price out the individual parts without disclosing the entire product.
- We are also very careful not to share client contact information on the samples or prints unless given permission in advance. No need to make public your interest in sourcing from China.
Once supplier has been selected:
- Own the tooling out right. Any funny business and tooling is extracted from vendor.
- Sign letters of confidentiality and exclusivity with vendor.
- Trademark your brand in China. Having done this, the court system is on your side should you face infringement. Luckily, registration is inexpensive and straight forward. Costs are under 2,000 USD in most cases. Visit our Partnership Page for references in this field.
4) Frequent visits to production site on your behalf allow us to keep an eye on the situation.
Order Sizes, Lead times, Samples & More
I’m a small company, can PassageMaker still help me?
Minimum Project Scope
A typical PassageMaker client purchases between 2 million and 20 million USD per year. At that level, the minimum service fees stated on our pricing page are a small fraction of the overall project expenses.
However, for small projects or startups, PassageMaker can be flexible with the minimum service fees if
a) there is a good chance the project scale will expand over time, and
b) the project can support at least 1 full time China-based support staff (admin staff to aid in vetting suppliers in China and manage them, and/or factory staff to assembly/package a product at our warehouse).
VC for Startups
As part of our Venture Capital program, for a very select group of small projects, usually starts ups, PM may waive or reduce fees in exchange for ownership in the client’s project. See www.AmAsiaVentures.com
While, PassageMaker can provide a comprehensive service if you are considering outsourcing supply chain management / infrastructure / man power to find and manage a China supply chain, our sister company, Sourcing Service Center, as an option to consider if your budget and project scale is very small and you are looking for support on a “a la carte” basis.
And if you end up managing a supply chain on your own, it can’t hurt to check out www.ChinaSourcingAcademy.com (CSA) where you will find tutorials and insider tips on sourcing in China.
How many samples should I send if PassageMaker is hired for a sourcing feasibility study?
When size and cost permit, we recommend sending 5-10 samples. Keep in mind that a counter-sample should remain in our office while remaining samples are sent to potential suppliers for review and quotation. Sending a single sample to various potential suppliers located across China can significantly increase the time needed for project delivery.
Do I need the Chinese address to mail things to PassageMaker?
QC – Quality Control
What are some of the key terms and concepts I need to understand regarding Quality control in China?
Quality Control (QC): A system that is put in place by a manufacturer to monitor and maintain quality as goods flow from raw materials (IQC) into semi-finished goods (IPQC) into finished goods ready and packaged for shipment (FQC). Visit our Product Quality Manual for an example of a QC system.
Quality Assurance (QA) or Third Party QC (3PQC): An outside party that reviews the QC system of the factory and provides additional testing, inspection and/or audit services as “insurance” or a “double check”
ISO: Family of standards and guidelines for measuring quality in the manufacturing and service industries from the International Organization for Standardization (ISO). However, ISO certification does not guarantee product quality. It ensures that the processes that develop the product are documented and performed in a quality manner. In other words, a concrete life jacket could be made in an ISO system, but you wouldn’t want to go swimming with it! ISO is about the system for making something rather than the product being made inside that system.
Min vs. Major vs. Critical Defects: A Critical defect could cause physical harm and is considered dangerous- example a piece that easily breaks off and becomes a choke hazard. A Major Defect is something that will impact the ability to sell the product. Example- a scratch on the show surface of a microwave. A Minor defect is an acceptable defect that’s root cause should be corrected in future before it becomes a major or critical defect, for example, a small scratch on the interior housing of a microwave which can’t be viewed by consumer and don’t effect function of product.
Definition of Terms – Testing vs. Inspection vs. Audit
- Testing: AKA Laboratory Testing, Product Life Testing = seeing how one (ideally representative sample) handles itself against certain specification and requirements either in a laboratory or controlled environment.
- Inspection: Pulling random samples from production line, warehouse or market place, to compare against agreed standards.
- Audit: Two main kinds Factory Audit (FA)= tech assessment of people, skills, process and equipment Social Audit (SA) or Corporate Social Responsibility (CSR) = child labor, min wage, OT, insurance, work place safety.
In short; Samples are Tested, Products are Inspected and Factories are Audited.
Do I need to visit China to supervise my project?
Can PassageMaker help me visit factories in China?
Of course. PassageMaker can help with plane tickets, visa information, hotel accommodation, and scheduling an interpreter. While a visit to China is not necessary to complete most projects, many of our clients enjoy seeing the production line first-hand. More information on visiting China can be found on our Guest Services page.