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you should (or shouldn't) hire a full-time product inspector

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Why you should (or shouldn't) hire a full-time product
inspector

Posted: November 03, 2016

By John Niggl

Imagine
handing over a deposit of $5,000, $10,000 or $100,000 dollars to a factory in
Asia for an order of high-end jewelry. Then when you receive the goods you find
the supplier used inferior materials. And now you’re stuck with a substandard
product that you can’t sell to your customers.

Few
problems are more frustrating to importers than those that affect product
quality. And when it comes to preventing scenarios like the one above, some
importers opt to hire a full-time product inspector to check the quality and
status of orders before they ship. There are some distinct pros and cons of
having full-time staff based near the factory in which you’re
manufacturing.

And
whether you already use a third-party or personally visit the factory yourself
to inspect, it’s worth being familiar with this full-time option. So let’s look
more closely at why some importers choose to hire full-time staff and others
don’t to see if this is a viable product QC solution for you.

Why
some importers hire a full-time product inspector

A
full-time product inspector is typically a salaried employee in the country
where your supplier’s factory is located. Depending on where you’re
manufacturing and how frequently, you may have one dedicated individual visiting
one factory or multiple factories. You might also maintain multiple full-time
staff to handle a greater volume of inspections. These full-time staff are paid
an annual salary.

Advantages
of hiring full-time inspection staff

There
are some real advantages of hiring full-time staff to handle your product QC at
the factory, such as:

• Importers can
realize some cost savings and greater convenience by not having to
personally travel to their supplier’s factory each time they need to inspect an
order.

• Some importers find
full-time inspection staff easier to manage than alternatives, such as
third-party or factory QC staff, because these inspectors report directly to the
importer.

• Since full-time
inspectors are typically hired locally, they’re usually native speakers of the
local language, which can mean easier communication between the importer,
inspector and supplier.

• Importers often
receive more consistent reporting when using full-time staff because the
same people will generally inspect at the same factories each time.

These
advantages can vary depending on the importer and their unique situation. For
example, you may find that a full-time inspector is easier to communicate with
but more difficult to manage than alternative methods of product inspection. But
these are the most common motivators for importers hiring full-time staff for
inspection.

Why
other importers forgo hiring full-time inspection staff

For
many importers, the above advantages are great reasons to hire full-time staff
to handle inspections. Larger importers, in particular—those with annual revenue
of $10 million or more—find it less costly to hire full-time staff stationed
near factories where routine inspection is needed. But other importers find that
hiring full time staff is not the best option for them, due to several
reasons:

Higher
costs

It’s
true that larger importers may save money by maintaining full-time staff abroad.
But many importers actually spend more money paying a salary to full-time
staff, than other inspection methods.

An
excerpt from a 2015 annual report from Kelly
Services shows that quality managers in China earned a salary of between
$35,000 and $60,000. An importer would also be paying for travel expenses to
and from the factory, such as transportation, food and accommodation. These
costs along with salary could make the full-time-staff method of product
inspection very expensive.

Unlike
full-time inspection staff, third-party inspectors are typically hired on an
as-needed basis. Rather than paying a salary to these inspectors, importers
generally pay a third-party inspection company to send inspectors when and where
they’re needed. These importers are only billed for the time and expenses
accrued during the service.

Third-party
inspection companies also tend to have a wide network of inspectors based
throughout China, Asia or worldwide. So travel expenses tend to be much lower
than, say, hiring a full-time inspector to travel between different
factories.

Legal
challenges with maintaining full-time staff

Some
importers choose not to hire full-time inspection staff because of local legal
challenges. Hiring full-time staff often means establishing some kind of legal
entity, such as a rep office. And in some countries, like China, this can be
fairly difficult. Finding an agent to assist you can be costly as
well.

Some
countries have more complicated employment laws. For example, hiring and firing
employees in China can be difficult. As Attorney Grace Yang points out in China
Law Blog, firing employees must be based on “statutory grounds”, and
employers must pay severance to terminated employees. This additional “red tape”
can make hiring full-time staff a less attractive QC option.

Integrity
risks

Integrity
risks are present in almost every manufacturing scenario, including product
inspection, logistics and other aspects of supply chain management. Corruption
can be as straightforward as bribery. But it usually takes more subtle forms,
especially during product inspection.

Factory
owners or managers might offer lunch or dinner to an inspector, for instance. Or
they might offer to have a private car pick the inspector up from a train
station, rather than having them take a bus to the factory. Seemingly innocent
gestures like these can affect the inspector’s judgement when it’s time to issue
a report. That’s why it’s important for inspectors to refuse these kinds of
gratuities and remain impartial.

The
need for rotating inspectors

Why
does it matter if the inspector is working full-time for an importer? Inspectors
employed full-time by an importer often visit the same factory regularly. The
problem with this is that routine visits to the factory create opportunities for
the inspector to become too familiar with factory workers and management. As an
inspector spends more time working with the same people, they’re more likely to
become friends, which can influence the accuracy of reporting.

The
best way to prevent this is typically to rotate inspectors regularly so that no
inspector is going to the same factory too frequently. This is more easily done
by a third-party inspection company that employs many inspectors in a given
service area. Unless you’re a larger importer with frequent inspections at
different factories in a concentrated area, it won’t be very cost-effective to
hire additional full-time staff just so you can rotate them.

Frustrations
with communication

Ease
of communication was listed above among the advantages some importers find when
hiring full-time inspectors. But depending on the inspector, communication can
just as easily become a source of frustration. Consider the following
information importers typically need to provide for product
inspection:

• The PO
or packing list showing breakdown of item quantities

• Product
requirements, such as CAD drawings and other specifications

• Any QC
checklist or criteria for checking the goods

• Any known quality
issues and how to report them

• The sample
size for inspection

• Any approved
product samples for use during inspection

• The factory address
or inspection site location

How
problematic could it be if the inspector misinterpreted one or more essential
details?

Inspection
could be conducted on the wrong items at the factory. Dimensions could be
measured incorrectly. Quality issues could be underreported. The list goes on.
Just because an inspector is a native speaker of the local language and has a
decent grasp of English doesn’t mean communication will be smooth.

That’s
one of the reasons that some third-party inspection companies employ foreign
staff to work between importers and inspectors. Since they’re able to speak
both English and the local language, they can clearly communicate instructions
to the inspector. Many importers also feel more comfortable dealing directly
with someone who’s familiar with their own culture, which further helps prevent
misunderstandings.

Conclusion

Inspection
is a key part of product quality control. Many importers find that it lowers
their costs, while improving the overall quality of their product. But each
importer is different. Not all methods of product inspection are ideal for
everyone.

As
we’ve seen, hiring a full-time product inspector can be a relatively efficient
and low-cost solution for some. But for others, maintaining full-time inspection
staff can be problematic and more expensive than alternatives. Whatever your
options are, they don’t have to be mutually exclusive. For example, you may find
that some combination of full-time and third-party inspectors is best for
you.

The
bottom line: weigh your options against your unique situation. No product
inspection method is a one-size-fits-all solution.

Want
to learn more sourcing best practices?

Join the Global Sources Summit that combines conferences and
networking, co-located with our Hong Kong trade shows. The event will be held
April 17-19, 2017, and is geared toward online and Amazon
sellers.

John Niggl is a Client
Manager at InTouch Manufacturing
Services, a QC firm that performs product inspections and factory audits in
China for US and EU clients. John also writes for the QC-related blog, Quality
Wars.

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