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Sourcing chronicles: ET2C – 20 years and counting!

Company News / admin / Buying Office, et2c, procurement, Quality Control, sourcing

Sourcing Chronicles ET2C International procurement quality control

Sourcing has evolved significantly over the past 20 years. We have seen China’s accension to the WTO, outsource manufacturing move mainstream with lower barriers to entry, trade tariffs as part of political posturing, the expectations of the consumer have developed to put greater emphasis on information flow (sustainability, supply chain transparency etc) and, last year, the Pandemic and the PPE ‘grab’.

There is no doubt that some of these events have presented opportunities whilst others have been significantly more challenging. Throughout these ups and downs, a consistent throughout this period has been ET2C, who celebrates 20 years on the 8th May 2021. Our DNA remains the same, and we are still working to deliver the best products and services to our clients. It’s what gets us out of bed in the morning!

“What a fantastic achievement! Never could I have imagined, on that first day when I opened the office on Beijing Dong Lu, that 20 years later we would have over 200 staff across more than 10 countries and over 100 regular clients. Of course there have been tough times, but it has been the staff and our clients that have helped us truly grow and flourish. A great ride, here is to the next twenty!” Richard Archer-Perkins, CEO, 7th May 2021

ET2C’s History

It all started at the Javits Center in January 2001, when Richard (CEO) visited New York at the Pure Exhibition. Having seen the emergence of a mass manufacturing base in China, which was in the early stages of taking the mantle from Taiwan, he walked the show going to every booth asking whether there was anyone interested in working with China. There was a lot of interest, but there was only one company that came to the table; a body jewellery company called Silver Moon Concepts who operated in Florida, USA. He managed to find a supplier (who traditionally worked with watches), who had the machinery and material to make surgical grade stainless steel (316L) and importantly create the necessary shapes. He then went about finding staff to create a mini-production line to put the product together and pack them. The office then opened on the 8th May 2001.

ET2C office

The evolution of the business

As a result of delivering significant cost savings and driving margin growth for our clients, ET2C quickly took on more clients who wanted access to suppliers in China. Even back then, in 2002 and 2003, broad access to China was much more limited as it would usually be today (outside of the Pandemic). As the business grew, we established our own merchant team, a quality team and established operations in different markets to best align with our clients’ needs. Today, we have in excess of 100 regular clients and are constantly looking to give them sourcing solutions that drive their bottom-line growth.

Areas such as sustainability and personalisation have become key parts of any retailers’ supply chains – at the very least they should be analysed and considered in line with the consumer – and we are therefore actively engaging in these fields to continue to provide relevant solutions to our clients.

ET2C video — Watch our Company Video to know more!

Sourcing in Uncertain Times

The Pandemic continues to stunt global trade, with certain markets still reeling from lockdowns whereas others are beginning to relax restrictions. Sourcing markets are similarly impacted; India has plunged into a lockdown whereas China by comparison is largely Covid free. Market diversification is essential to spread risk across regional hubs. We continue to see this trend with South East Asia (Vietnam and India) becoming increasingly popular as sourcing locations. Diversification can also include, particularly for European businesses, near sourcing options such as Turkey where freight rates (and at today’s high pricing) can be mitigated as well as speed to market.

That is not to say that China will lose importance even as its relative market share is gradually eroded. On the contrary, we think that China will still be an essential part of any sourcing matrix given the infrastructure and networks in place.

ET2C’ Services

We realise that every client will have their own unique requirements. We, therefore, look to tailor our solutions to best fit each client’s needs, whether this be resource, expertise, cost structure we have the solution for you.

Sourcing Solutions

Our merchandise teams work across multiple categories, but primarily these can be defined into two divisions, Consumer Goods (Garden, Fashion, Pet, Toys, Furniture, Homewares and Health & Beauty) and Industrial goods. We currently source from India, China, Vietnam and Turkey (opened December 2020). Countries being assessed at present include Mexico, Thailand, Malaysia and Taiwan.

Buying Office

Our Buying Office solution has always been the backbone of the company and helped the business to grow. We still believe that ability to have a dedicated team on the ground, in market, is essential to driving visibility at source. This allows clients to fully control their suppliers across quality, delivery and production management. Our model is the most cost effective, transparent and simplest available and second to none.

Quality Team

We have teams on the ground who spend a considerable amount of their time traveling to suppliers to verify and check the quality of our clients’ products pre-shipment. There is no doubt that having visibility pre-shipment of your products is an essential part of the supply chain function. Our teams also evaluate factories to make sure that you know they are the right partner for you before committing to any funds. We have recently launched our Virtual Factory Tours initiative to help clients who are stuck out of their sourcing markets connect with their suppliers, or even identify potential new partners.

ET2C - Virtual Factory Tours — Watch the video to know more about ET2C Virtual Factory Tours

With 20 years of experience, ET2C is well-positioned to help you with all your sourcing needs, whatever they may be. We look forward to designing new solutions to make your business more successful. Please contact us at contact@et2cint.com.

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Sourcing Solutions to Boost your Supply Chain

Company News, Industry Insights, Sourcing Procurement Insight / admin / Quality Control, sourcing, Supply Chain

Sourcing Solutions Et2C int. procurement business quality control audit buying office

Sourcing solutions need to be reassessed to meet the demands of the ‘Next Normal’ and ensure you do not lose competitive advantage.

Sourcing solutions will be key to the success of any Retailer, Brand or wholesaler in 2021. The Pandemic has left the world fractured and supply chains have been disrupted. In 2020, most business had to scramble to shift both their internal and external processes to function to some semblance of normality. The challenge that now lies ahead in 2021 is how businesses position themselves to capitalise on a global recovery. Undoubtedly, the effectiveness of their supply chain and sourcing capability will be integral to their success and failure.

Et2C International sourcing globe procurement

Sourcing Solutions – Key Themes

The context of this recovery can be framed in three main themes.

A) The Consumer

Lockdowns have accelerated the transition for many consumers from stores to online. In fact, it has been a forced change in many instances with non-essential shops having to close for extended periods. Consumers and retailers, therefore, had to rely on online interaction and relationships. In 9 of 13 major countries recently surveyed by Mckinsey on Pandemic-induced changes to shopping behaviour, at least two-thirds of consumers say they have tried new kinds of shopping. Moreover, in all 13, 65 percent or more say they intend to continue to do so. There is also a downside in that the consumer became even more fickle and the marketplace that much more competitive.

B) The Products

Notably, in a lot of markets, households have saved money and not an insignificant amount. The Bank of England has recently estimated that British Households have accumulated ‘accidental savings’ of £250 Billion. The consumer is therefore well poised – like a wound coil – to unleash pent-up demand for certain items once markets begin to reopen and lives normalise. Aside from travel and services sectors, the likely destination for this discretionary spend will be the fashion sector. Other sectors that have been resilient during COVID-19 will be impacted to a lesser extent. Companies need to be ready to take advantage of this spend.

C) Supply Chains

Supply chains have had to shift as well. Companies are all too aware now about the over-reliance on a small pool of suppliers or even focusing solely on one market. Building in resilience across your supply chain means greater visibility across all the manufacturers embedded within them but also the need to establish other market substitutes. The current freight rates out of Asia are a good example (up to $14k for a 40ft pre-CNY) and are pointing to other markets as potential opportunities that are not so heavily reliant on long shipping lead times.

Your sourcing solutions, therefore, need to factor in a range of complex, often inter-linked, issues at a time when businesses are primarily focusing on survival.

Sourcing Solutions for the Here and Now

There are many solutions that businesses can look to that address the current challenging environment. Clearly, the travel restrictions in place across regions and countries continue to cause challenges for supply chains where there is no ‘on the ground’ access.

Gaining access to these markets and getting the visibility you need across your supply base is key. Similarly, agility and speed to market will provide a competitive edge when it comes to sourcing new suppliers, identifying new innovations or even accessing new markets.

ET2C’s Solutions

At ET2C, we have a range of sourcing solutions to help you during these difficult times. These give you the access you need, but also build in the agility that is needed to leverage the benefits.

1. Virtual Factory Tours

If you are not able to get to your suppliers, let us bring them to you through our Virtual Factory Tours! These are live or pre-recorded visits on-site via video calls to walk you through the factory and give you the insight you need to make decisions supplier selection. It also gives you the opportunity to view the supplier’s processes and standards in real-time.

2. Buying Office Solution

The best way to get a cost-effective, but scalable solution on the ground across multiple markets. The dedicated team will allow you to develop deep relationships with your suppliers, identify new suppliers but importantly also conduct upstream sample reviews and shorten product development cycles.

Buying Office ET2C International procurement sourcing

3. Sourcing Services

We can give you access to multiple sourcing markets. Also, we can take on the supplier identification, assurance, management and quality aspects of your supply chain. We work as your partner on the ground delivering the products you need for your business.

Sourcing services ET2C International procurement

4. Quality Services

Our quality team has over 20 years of experience of quality assurance and inspections on the ground in Asia. We make sure that we get to the factory to give the visibility you need across product quality and the standards you require.

Quality Control ET2C International procurment inspection audit

5. Advisory

We are here to help! Whatever your needs for your sourcing, contact us and we’ll be happy to talk through any issues you may have.

Summary

Creating an agile supply chain in the current global sourcing environment will be essential to driving growth in 2021. There are many obstacles, but with the right sourcing solutions, your supply chain will create a competitive edge.

At ET2C, we are well placed to help manage your Asia Sourcing across multiple markets with teams on the ground as well as work with our clients on their shipping needs. For more information, please contact us at contact@et2cint.com.

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Quality Assurance & The “Consultants”

Industry Insights / admin / Audit, quality assurance, Quality Control

Quality Assurance Consultant ET2C Audit

Quality assurance is an integral part of ‘knowing your suppliers’ but it has to be more than just an audit trail.

Quality assurance (QA) is a way of preventing mistakes and defects in manufactured products and implementing processes to avoid further issues. It also encompasses factory audits across a broad range of areas from financial due diligence to manufacturing processes and social compliance audits. Quite rightly, retailers and brands will insist on understanding more about their suppliers to varying degrees and this visibility is an increasingly important aspect of any global supply chain. Making sure that the supplier is who they say they are, has good systems in place and is not abusing their employees is now essential information to any Buyer, and also more and more of interest to the Consumer as well.

Quality Assurance Consultant ET2C Audit Factory Check

“Guanxi” has always been a word that reverberates around discussions on China – the use of personal connections for some personal, commercial or economic gain. There is no doubt that relationships are always important in any walk of life, and this is no different in China. That said, the South China Morning Post wrote an interesting piece recently on the quality assurance industry in China and the shadowy world of ‘consultants’ who were helping factories pass factory audits through deceit and fraudulent claims.

The Consultants

The article investigates the work of independent consultants – often ex-employees of large testing houses – suggesting that there are many incidents of these intermediaries effectively forging documents and bribing inspectors to get lower end factories across the line when it comes to passing the relevant standards. Once the audit has been completed, and the factory has attained the level required, then the orders start rolling in.

Often, with yearly audit cycles, one can argue that the system is open to abuse. Also, the fact that the suppliers often must pay for the inspections themselves and they are not unannounced in the main does not help with maintaining consistent standards over an extended period – audit today, gone tomorrow (and for a further 364 days).

The Industry

It is likely that there are incidents of such behaviour. And it is clearly wrong. The intention of any retailer or large organisation buying from China would certainly not be to fund this industry or to rely on sub-standard factories. Using these factories could lead to poor quality products, which can be very costly, or Brand reputational damage should use of such a factory enter the public domain. Quality assurance is an important part of understanding the supply chain but perhaps its application and implementation is where the real issue lies.

Factory Audit Check ET2C Int

In a world in which retail is having to work harder and harder to engage with the Consumer and persuade them to buy products, different functions within large organisations are often competing for their own self-interests. Clearly, cost is commonly the weapon of choice in any negotiation when it comes to the Buyers. Driving the best commercial (low price) is still how most buying departments are judged and even rewarded. Whereas quality departments (and all the names in between) will be looking to ensure that the standards are up to their requirements. The result is an awkward marriage between commercialisation and quality assurance, which can often drive the wrong outcomes.

Quality Assurance Consultant ET2C Audit Factory Logistics

For example, the quality department will rightly say that workers must limit their working hours to 40 per week. At the same time, the buyers/merchandisers may point out that if the shipment that was placed late does not go out next week, then the factory will be charged 1% per day of the total order for each day late. At some point, there has to be a straw that breaks the camel’s back.

Conversely, if the retailers paid a little more and did not squeeze so much out of the price of a product, would they end up with sub-standard factories in the first place?

Quality Assurance

Quality assurance remains important and done correctly (regardless of some of the innate challenges mentioned above) there is no reason why there should even be this cottage industry of consultants at all. Here are some of our thoughts on how to make sure QA is working for your business:

1. ‘Own’ the Audits

This is not, and should be not, a ‘tick the box’ exercise where the inspections are outsourced accepted as presented. It requires a deep understanding of your suppliers, what makes them tick, and where the possible risks apply. The certification or standard is just the first stage, which then requires follow-up.

2. On the Ground

Having a team on the ground in any market will allow greater relationships to be developed and an understanding of the factories you partner with. This means more frequent visits to make sure they are meeting the standards (and indeed any corrective action plans as well).

3. Unannounced Visits

Always good to make sure Suppliers know auditors may turn up any time. It is always the best time to inspect a factory when they are ‘unprepared’ as it should not alter the standards in place.

4. Pay Audit Fees

When doing an external audit, to remove any leverage, it always makes sense for you to be the contracting party with the third-party auditor. Of course, if the factory agrees to pay this as part of your agreement, this can be deducted from future orders.

5. Prioritisation

Vendor identification and selection must be aligned to all functions (buying and quality). Understanding what the priority is will allow better factory selection through internal alignment.

Summary

Quality Assurance is a key part of any supply chain, wherever in the World. Make sure that you understand what the factory standards mean for your business and your consumer. The quality and buying functions are not mutually exclusive but it is important that there is alignment to drive the correct outcome.

At ET2C, we have our own inspectors on the ground, and have been helping our clients with quality assurance for the past 20 years. For more on Quality Assurance, or anything other information, please contact us at contact@et2cint.com.

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Quality Assurance vs Quality Control: a basic guide

Industry Insights / admin / quality assurance, Quality Control

Any time you outsource production overseas, it is essential to have visibility of the manufacturing process and the end product before the goods are shipped. In the same way, for any orders placed with a supplier ‘up the road’, you would make sure you were frequently visiting the site to check and oversee production (timings, raw materials etc) and importantly the product quality.
Quality control and quality assurance are two key components of any quality strategy in place. Although this is very much an evolving arena, with a shift from independent quality ‘policing’ to more of a continual improvement process through the empowerment of key stakeholders across the quality process, having an upstream capability should be the backbone of any sourcing strategy.

ET2C Insights.

We have spoken to our in-house ET2C Quality teams, who have over 20 years of experience in implementing quality processes across Asia, both internally and for our clients, and wanted to share some insights to consider with your quality strategy. We have split these across Quality Assurance and Quality Control.

Quality Assurance

1. Quality starts with the manufacturing site.

Generally, a well-maintained factory that is clean and well-organised is better placed to produce to your quality requirements. For example, if you are producing garments and the fabric rolls are kept on the floor there is clearly a greater risk of the fabric being marked or even being contaminated with mold. A good factory would have the rolls on racks, stored in a dry and clean environment.

2. Make sure you visit and walk the production process.

You should make sure that you visit any factory you are partnering with. Walk the manufacturing process to make sure that everything makes sense, from the raw material receipt, the machinery (capability), number of production lines and workers. You need to be sure that they can deliver what you need and in the timeframe too.

3. Ethical standards are important.

There are a number of certifications, like BSCI and SMETA audits, that provide a significant amount of detail when it comes to a factory’s operations and the standards and regulations that they adhere to. But, just as a little tip, watch the factory workers as you tour the factory as it can give you an insight into how happy they are in their jobs. Perhaps simply a guide, but if they are happy then it certainly points to a good work culture.

4. Partnership is Key.

As part of your quality assurance work, keep in mind that partnering is now more important than in previous years as costs rise across Asia. When we talk of ‘partnering’, we mean being fair and equitable with your suppliers. Paying that little bit more now, and perhaps committing to business over a longer period, will help you in the medium to longer-term with innovation, consistency of goods and ultimately competitive prices. With good partnerships comes trust. You will therefore be well-positioned to develop a deeper understanding of your suppliers’ operations, the risks and opportunities.

5. Corrective Action Plans.

Any supplier evaluation is likely to flag some areas for improvement. Engage with these and make sure that you understand these from the supplier’s perspective as well. What is the impact of the suggested changes, what are the challenges? How long will this take? Again, working through these with your supplier and keeping up to date will help them improve for the better.

Quality Control

1. Product Knowledge is paramount.

Whether you are using a third-party inspector or your own in-house Quality team, having an understanding of the product being inspected (inline or pre-shipment) is essential to checking it correctly. Specification sheets and gold seal samples help to facilitate knowledge transfer but where possible try to ensure consistency of the individual inspecting the goods. They will build up experience of what is and what is not acceptable and be well placed to see the product through your eyes.

2. AQL methodology is not a quality guarantee.

AQL (“acceptable quality level”) is an internationally recognised statistical sampling methodology. In short, this means that testing a random sample of a product should identify any broader quality problems against a predetermined list of major and minor defects. This is different from a piece by piece inspection which is obviously more costly. When agreeing AQL levels, make sure you are taking into account any history with the supplier, product complexity, lead times (if shortened for any reason) and value. This will help minimise the resource needed and at the same time increasing the chance of quality defects being identified and isolated.

3. Ethics in quality control.

Ethics forms an integral part of any successful independent quality control inspection. It is no secret that a quality inspector is in a position that can easily be compromised by unethical behaviour. Make sure that you listen for any noises from any parties involved factory side and, if they exist, conduct a thorough investigation to isolate and address the issue. Also be sure you have this conversation with your service provider where relevant as well.

4. Analyse the data/use technology.

Quality control is about data. Make sure you are collating it in a way that it can be analysed and manipulated. This will provide insights into not only your suppliers’ performance but also where improvements to the manufacturing process can help address the main quality defects. This continual improvement process should drive up the quality level and again reduce resource committed. The technology is already available to help manage these analytics and also drive efficiencies through the quality control piece.

5. Upstream, upstream, upstream.

Quality control needs to be conducted on-site at the factory. It means that any issues identified can be potentially addressed pre-shipment or rejected as the case may be. There is simply no point implementing a quality process that identifies issues on arrival in your own warehouse. It is too late and the cost implications (or loss) will only increase from that point onwards. You need to have some form of upstream capability.

Summary

Bad quality costs companies money; whether it is in returns, corrective measures taken, staff time on issues or simply having to discount goods to move them. It is difficult to measure at the outset before something has gone wrong and often companies therefore overlook the need to implement a sound quality strategy. This should align to your supplier markets and the products you are manufacturing. Ultimately, it is about visibility and partnership.

At ET2C we are well placed to manage your quality control and quality assurance requirements. With our own dedicated quality team across Asia, we look to deliver the visibility you need to sign off shipments. We are already investing in technology to enhance the service we provide our clients in this arena. For more information, please contact us at contact@et2cint.com.

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The Benefits of Outsource Manufacturing

Industry Insights / admin / manufacturing, Quality Control, sourcing

With more and more competition cropping up all the time, most businesses are looking for ways to differentiate themselves. Outsourcing your production can be the perfect way to reduce overheads and increase the flexibility of your supply chain. In this article, we will be providing you with an insider’s look into the many benefits associated with outsourced manufacturing, particularly from an Asian perspective.

Why Outsource Manufacturing?

The whole premise of outsource manufacturing was initially built upon a significant reduction in the cost of goods. Rather than having to invest in a manufacturing plant, manage large numbers of factory workers and cover large unwieldy variable monthly overheads – all that would form part of your product cost – it was possible simply to pay a unit cost for a product. When access to mass market third party manufacturing was available, particularly at a time when China became a member of the WTO back on the 11th December 2001, companies had a choice as to whether to retain their own manufacturing plants or reduce overhead and create a more flexible and dynamic supply chain.

Outsourcing to Asia.

Outsourcing to Asia has generated significant margin opportunities due to the comparable, lower, operational costs in these developing Asian economies. Some of the main savings have been historically generated as a result of lower labour wages. Although manufacturing wage gains are fastest in low-cost countries, the savings that can be factored into the cost of goods are still significant.

Some examples of average monthly manufacturing wages by country and the annual wage change over the past couple of years:

China, approximate monthly average salary, $500/ Wage gain, 6%
Thailand, $450/5%
Indonesia, $380/9%
India, $280/10%
Vietnam, $250/8%
Cambodia, $200/11%
Myanmar, $150,12%.

This is a relatively predictable path for developing economies as growth of the manufacturing sector has a direct impact on blue-collar workers’ salaries, as part of the broader wealth creation piece. Just to reiterate the point, Poland, which is one of the largest manufacturing economies in Eastern Europe, has an average wage of $1,400 per month, and the relative increase is approximately 5%.

Cost still a Key Benefit?

Back in the early 2000s’, the cost savings were significant when production was outsourced to Asia. Is this the case still today? Are there any other benefits of outsourcing your production today?

1. Cost

Cost will always be a factor behind looking to outsource production. Certainly, it has to make commercial sense, and this is the primary driver for looking at Asian manufacturing. Even with China’s cost base having increased significantly in 2019, with tariffs now in place from the US and likely to remain so for the foreseeable future, there are still manufacturing efficiencies and technology capable of helping the ‘China machine’ retain some of its relative competitiveness.

2. Raw Material Availability

With the scale of manufacturing that has risen across Asia for the past three decades, there has also been an evolution in raw material supply channels. In particular, China has developed sophisticated supply chains that lead not only to access of raw material but also sub-components and accessories. In fact, this helps reduce costs as everything can be sourced locally (and often nearby your plant).

3. Flexibility

Finally, outsource-manufacturing has enabled companies to better manage their working capital and reduce significant investment in their own manufacturing plants. It is one of the reasons that in this internet age, a start-up can grow so quickly given the barriers to entry have been markedly reduced, if not removed altogether.

4. Quality

With the right quality strategy, it is possible to deliver excellent quality from Asia. There are a significant number of factories which have developed an excellent understanding of quality requirements for export.

5. Expertise

Using outsource manufacturing can immediately enhance the expertise and capability from a knowledge capital perspective. And this applies to any company as long as it is possible to find the right partner to make your products. Even the simplest products have to go through a range of different manufacturing processes and essentially buying this expertise greatly reduces any potential learning curve. It has also greatly reduced any barriers to entry.

Summary

There is no doubt that outsource manufacturing is an integral part of any Brand, Retailer or Wholesalers’ supply chain strategy. One only needs to look at one of the largest brands in the world, Apple Inc, who use Foxconn as part of their iPhone manufacturing strategy. Undoubtedly, it is essential to understand the risks of manufacturing your products overseas. It does not come without risks and understanding these, creating some form of ‘upstream’ presence and ensuring you have visibility at all stages of the production, will make sure that these are effectively managed.

At ET2C, we are capable of walking you through each aspect of the manufacturing process. For more, please contact us at contact@et2cint.com.

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Quality Assurance at ET2C: Elaborate, Efficient, and Excellent

Company News / admin / quality assurance, Quality Control, sourcing

Quality Assurance is one of the biggest concerns that companies have when sourcing from Asia. Why? Over the years, a myriad of problems has occurred to entrepreneurs lacking effective communication skills when dealing with suppliers in Asian countries. Quality issues can cause the loss of hundreds of thousands of dollars or more.
These cases are not uncommon; the amount of inspection failures each year in Asia have been volatile the last few years, but still reaches high percentages.

However, there is a way to avoid becoming part of these statistics. Any company should look to ‘check before they buy’ their products. Having an upstream capability to do this in Asia is imperative to removing the additional costs once the goods arrive. Identifying issues at the factory means that they can be addressed, or worst case, they can be rejected.

Quality Assurance is an essential process in any industry hoping to ensure the well-being of their consumers.

Quality Assurance – step by step.

ET2C quality assurance processes are divided up into five different steps. Each step is an essential part of the quality control process to ensure the consistency and integrity of the product throughout all steps of production.

Raw Material Receipt

Here the raw materials of the product are laid out for our quality control agents to inspect. This ensures that from the very beginning, our suppliers are using ingredients that are conducive to your company’s specifications. This avoids many problems later in production. This step ensures that the products can handle the stresses of production, transport, or use.

Early Production Checking

After the raw materials are approved and begin the manufacturing process, they are checked once more in the early stages of production. This ensures that the right steps are being made so that any errors in production can be caught before the product continues into production, saving money and materials down the line.

In-Line Inspections

As the product moves towards the middle parts of production, it is inspected again on the production line. This is to continue to ensure the quality of the product at all stages of production. With these measures in place, it is easier and to pinpoint exactly where errors are being made.

Final Inspections

These inspections take place at the end of production and before shipment. This catches any errors in the product before they reach the customer, which make it one of the most important steps of the quality control process.

Quality Control Review, Authorization, and Release

The final step of quality control consists of condensing the information from all the inspections and the raw material receipt. First by reviewing the quality of the quality control processes, then authorizing that the information within the report is correct, and sending that information to our partners at the end. This step is extremely vital to the process. In this way, our associates can see into the course of their products’ production and are sure that their order will meet their specifications.

This can change based on a risk assessment and based on the level of engagement with the relevant factory. In fact, our aim is to implement processes that ultimately the factory can follow to facilitate a continual improvement methodology. The more eyes and processes that can be developed to eliminate defects can only be a positive development.

Quality Assurance – Our Operations Abroad

One component of quality assurance that most outsiders might not consider is how quality control is conducted in different countries. Undoubtedly, ET2C has an immersive supplier network. Because of this, we realize how to interact and ensure quality in multiple different areas of the world. Some of our biggest operating areas such as China, Vietnam, and India, vary in how quality control is viewed by suppliers.

China – trustworthy relationships and effective communication

To start with China, there are a few things for sourcing companies to keep in mind while conducting business in the middle kingdom. First, dealing with bureaucracy is a huge part of doing business in China. Because of the complex nature of government intervention in business, any manufacturing contract should be in Chinese with the specifications of the product clearly and specifically laid out and the producer company’s seal on it. This is to avoid potential legal headaches down the road. In addition, face to face conversations are absolutely crucial to producing in China. To know and to form a relationship with the supplier is a good way to ensure quality as well as effective communication of your specific production conditions.

India – the importance of independent quality assurance

ET2C’s expansive supplier network have developed the need for a comprehensive and transparent quality control process.
Next, production in India also has certain aspects that also require special attention. Like China, India has policies on quality control. Their Quality Council of India was formed to give India an edge for quality and allows for a government presence in ensuring QC. However, it is still important for a company to conduct independent quality assurance as well, since this bureaucratic arm is often stretched too thin to capture many details about the production process. This requires consistent quality management on the part of the customer, which can be done through a supply chain company like ET2C.

Vietnam – find reliable manufacturers

Vietnam, as a rising economy, is displaying many of its own unique aspects of quality control. As one of the newer developing economies, the lower cost of labor raises concerns over quality and reduced reliability. This is why it is essential to make sure that you are pairing with a reliable manufacturer. However, Vietnam has also shown itself to have a comparative advantage in producing garments, furniture and shoes. This has encouraged the government to look into methods of bureaucratic quality assurance to help encourage foreign business relationships.

Do you want to know more about quality assurance? If you have any questions or need assistance, please contact us via our website www.et2c.com

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Top 5 Tips for Choosing a Product Sourcing Company

Industry Insights / admin / Product Sourcing Company, Quality Control, sourcing

Top 5 Tips for Choosing a Product Sourcing Company

The abundance of outsourced manufacturers (particularly in Asia) has allowed retailers and brands to manufacture own brand products whilst also reducing barriers to entry for new start-ups. How these factories are managed is an important part of the success of these companies. There are numerous ways to engage with suppliers and these will need address in-house expertise, location, language, culture, manufacturing capability to name a few.

One option is partnering with a product sourcing company which has a presence on the ground in the local market, product knowledge and can add value when it comes to managing the supplier from development through to shipment. In this article, we will be providing you with top tips for choosing a product sourcing company you can depend on based on a few critical factors.

Tip #1: Make Sure They Know Your Industry

The sourcing company you choose should have a vast array of knowledge in various categories. If they do not understand your product line, the manufacturing process or quality standards then critical steps could be missed. One of the largest benefits of using a sourcing company is the ability to leverage resource (as opposed to relying on one in-house product developer as an example) and expertise.

Always ask and check their site for case studies and know-how about your product. At ET2C, for example, we have over 2,000 supplier contacts across a broad manufacturing sector.

Tip #2: Trust and Credibility

Always make sure the product sourcing company you choose can pass an in-depth background check. Research their previous clients, social media including LinkedIn as well as each employee carefully. As an overseas supplier, integrity and trust are essential and you should be able to get client references to further consolidate your due diligence process.

Check out the following thoroughly:

Years in the industry
Proven track record
Quality Assurance Process
Financial assessment
Excellent reviews from a variety of clients
Organisational structure and the ‘Team’
Certifications and accreditations that the company has been awarded

Bonus Tip: Particularly in Asia, integrity is essential and make sure you understand the management structure and their key clients as part of your reference check. Look for examples of long client relationships.

Tip #3: Location

One of the most crucial aspects of choosing a product sourcing company is taking advantage of its reach across the manufacturing base. It is important that they have offices and staff that are well placed to service these suppliers and work closely with them. This is particularly relevant for quality control and assurance as if they are located far away from your suppliers this could lead to higher costs due to transport, time etc. It pays to therefore familiarize yourself with where your products are sourced and how close that is to your sourcing partners.

Tip #4: Ethical Considerations

Increasingly, the consumer is becoming more ethically aware and this means that your sourcing partner should have an understanding of what this means on a quality and manufacturing level. It is a complex topic and leveraging some expertise, whether it is around innovative materials or processes to the rights of factory workers, is invaluable.

Tip #5: Quality Control

Making sure your sourcing company successfully oversees every step of the quality process is critical. The main areas that require quality assurance are:

Factory Evaluation – this refers to checking in on every aspect of the factory process, from manufacturing and technical audits. This will give you peace of mind as well as transparency with your overseas partners
Product and Sampling – a third party should be overseeing your samples and product standards to save on cost, make sure there is no damage to the samples, as well as evaluating shipping and other technical criteria
Process Inspection – having someone check in regularly during the production process is also critical. Every factory should have consistent updates to ensure quality and safety
Final Quality Inspection – a final check on the production quality to make sure that any issues are identified upstream and can be addressed before shipment.

Summary

Having a successful partnership with a product sourcing company should not hard. Make sure any company you select has a good track record and years of experience. It is essential to your business that you get the products you need at the right price, quality and on time. Leveraging the experience and expertise of a product sourcing company is one good way of making this happen.

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How a Third Party Quality Control Service Can Benefit Your Business

Industry Insights, Uncategorized / admin / quality assurance, Quality Control

How a Third Party Quality Control Service Can Benefit Your Business

A third-party quality control service operates as a keystone of your supply chain. Whether you source from down the road or as far as Asia, quality control requires constant attention. When your product must meet certain requirements to sell, verifying the capabilities of your suppliers is critical.
Thankfully, quality control metrics ensure that your decision to source from Asia remains cost-effective. Through early identification of issues and swift implementation of corrective action plans, quality control services deliver sustainable value to their clients.

Why Should You Consider a Third Party Quality Control Service?

When it comes to quality control and assurance, your business should embrace the best services for your product’s needs. Quality control checks give updates for whatever steps in production you choose to inspect. Sometimes that means inspecting materials before they ship from the factory, and other times before production begins, or any number of inspections between the two.
A range of representatives operate inspections in Asia, from in-house to third party.

How a 3rd Party Quality Control Service Can Benefit Your Business list — Third party quality control services ease bias concerns.

With an In-House Inspector at the Factory

In-house inspectors work from within the factory, developing quality control reports at requested moments in production. If you have established the trustworthiness of a factory, then this option is certainly viable. With a continuous improvement methodology and training at the factory level, it is possible to move to a self-certification inspection process that puts the responsibility for quality inspections firmly on the Supplier.

However, there is a potential conflict of interest. Loyalty may warrant that their interests align with the manufacturer over their clients and a costly mistake on the factory floor may be pawned off as certified for importers to discover in their own warehouses.

With a third Party Quality Control Service

Third-party quality control services function as the industry standard for quality control. They are objective and have experience across different product categories, which provides additional added value when it comes to potential product-specific quality issues.
Control parameters play an invaluable role in the performance of quality products. There is little doubt as to the value of a third party quality control service in Asia.

What Quality Controls Do I Need for My Business?

Early audits of factory and supplier capabilities ensure that your partners are capable of fulfilling orders. At this point in the process, you should be examining the methods and metrics of quality control. Manufacturers must demonstrate the infrastructure and technology necessary to identify and correct any errors in production.
Visibility is paramount. Understanding the production process and the materials being used to make your product are key to a successful production. It is important to recognize potential communication issues stemming from your instructions. Every part of your product specification creates a measurable benchmark for a third party quality control service to validate. Once you define a key metric, quality control checks evaluate whether production is meeting those expectations.

Some metrics are already set, like the Acceptable Quality Limits (AQL) outlined in the ISO 2859-1. While your own expectation can aim higher, meeting these baseline expectations can critically impact the salability of your product.
Critically identifying potential issues upstream, on-site, at the factory will remove significant future cost. Once the products have been shipped costs have already been incurred and it is likely that the cost of goods has already been transferred to the supplier. Getting anything back at that stage is problematic at best. Therefore, investing in third party quality control services has a significant benefit to your business and provides a level of comfort that your company’s money is being well spent.

How a 3rd Party Quality Control Service Can Benefit Your Business — Guide your product through the supply chain with peace of mind regarding quality.

Transparency and Accountability

Finding a trustworthy third party quality control service will provide a significant benefit to your business. We at ET2C International understand the necessity for transparency and accountability because they are core to what we do each day.
Contact us to learn more about the role of a third party quality control service plays in your supply chain and the range of services that we can provide.

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How Important Is Quality Control Service for Your Business?

Industry Insights / admin / manufacturing, quality assurance, Quality Control, sourcing

A quality control service enables cost-efficient, Asian sourcing with transparency and accountability. If you source from any location that you do not directly oversee, quality control checks and a quality assurance capability are an absolute must.

When your supply chain operates a few thousand miles away, popping into the factory for necessary inspections is rarely a realistic option. But, distance should not lead to a drop in product quality.

Overseas Should Not Mean Oversights

Sourcing from overseas countries introduces a range of new risk factors to an already complex manufacturing process and supply chain. Proper sourcing solutions and active management alleviate these factors to maximize cost-effective quality.

Quality control services act as a filter between each step of your manufacturing process. One common misconception businesses encounter when they seek quality assurance is the idea that such services eliminate all risk.

A quality control service cannot guarantee that nothing will go wrong. Rather, their job is to identify issues early to help determine the best quality solutions. Quality control specialists conduct most final inspections under internationally recognized sampling methodology (AQL). Rather than checking every single piece, inspectors sample shipments for errors.

Strategic sourcing identifies issues early — A professional quality control service can mitigate how costly a mistake becomes.

Why Do You Need Quality Control Services?

At this point, you may find one question running through your mind: If they cannot prevent all possible mistakes, then why bother hiring a quality control service?

Issues will occur and problems will manifest themselves. Quality control services provide the capability to manage these upstream. Once a Quality control specialists identifies an issue, quick implementation of correction action plans ensures that quality products still ship in good time.

When is the worst time to discover a quality problem? Whilst standing in your warehouse staring at the open container. Quality control plays an integral role in preventing such a scenario.

Identifying problems early in the manufacturing process empowers businesses to modify or, if necessary, reject the product upstream (on factory site) to eliminate the additional costs of shipping unsalable goods.

Quality Control Service Bottle Source — Early detection can prevent issues from rippling through production.

When Should You Perform Quality Control Checks?

Depending on your product and history with your supplier, you may choose any combination of the following inspections. Products which carry higher risk factors at certain stages in the process may require more attention.

Hiring a professional quality control service also ensures that audit-level tracking documents record each step of the process.

One of the most important standards is the Acceptable Quality Limit (AQL). The AQL is defined in the ISO 2859-1 as “The quality level that is the worst tolerable.” It is based on a sampling methodology that should identify any quality issues. Over the course of several inspections, AQL testing demonstrates your products’ compliance to industry standards.

1. Raw Materials at the Factory

Low quality materials rarely make high quality products. Raw material receipts secure a baseline for the foundation of your product, particularly when your product must meet government regulations and customer expectations.

If poor raw materials are used, then they will likely impact the appearance, function or chemical composition. This means that for certain product types, if the raw material is not correct, you will not get the product required at the end of the production line. This can be a particular type of yarn in a garment or the type of wood to build furniture. In terms of time and financial risk, raw material inspections can save entire productions from getting reduced to scrap.

It is also a useful check to confirm that lead times any supplier has already committed to are on time.

2. Early Stages of Production

Once goods reach the production line, early product checking inspections can begin. If manufacturers drill holes too wide or cut corners at the wrong angle, early identification is key. This should be based on a risk assessment on the supplier (history, relationship etc) and the type of product manufactured. To an extent, this also focuses on the manufacturing process as well to understand where the potential risks lie.

Like a dress rehearsal, early stage inspections distinguish immediate concerns. Corrections should be adjusted as quickly as possible to maximize the usability of remaining materials.

3. Middle Line Inspections (During Production – “DUPRO”)

Once production is significantly underway, in-line inspections assure that everything still aligns to specifications. Sort inspections may be necessary at this point in the process if inspections identify issues.

4. Pre-Shipment Inspection (PSI)

After production, but before packaging for shipment, inspections of products ensure that you receive products which meet your initial specifications. Typically conducted using AQL, PSI relies on the sampling based on the production volume against the agreed inspection standard. Before incurring the cost of shipping, it is vital to validate your product. PSI represents the last opportunity to accept or reject factory manufacturing before shipping the goods.

How Important Is Quality Control Service — Reduce costs by preventing shipments of unsalable goods.

5. Loading Containers (Loading Inspections – “LI”)

Oversight in packaging specifications can lead to factory-primed goods arriving damaged beyond recovery. Ensuring proper loading of pallets and boxes increases the likelihood of the goods surviving any shipment on the sea. Container seal numbers are commonly provided at this stage to maintain the integrity of the shipment from port to warehouse.

6. Sort Inspections (Any Stage)

If an issue arises at any point in production, sort inspections may come into play. They establish an exact count of which products are affected and which are not.

Sort inspections isolate impacted units and remove them from the process. Only products without the defect move forward.

Which Inspections Does my Business Need?

The best combination of inspections depends on both the supplier and the products’ risk factors. Fragile products, or those which must meet high standards for sale, require more attention throughout their production. Some companies may not offer the inspections best suited to your business’s needs.

Quality control services not only conduct these inspections, but are responsible for compiling data and relaying it to their clients. It is important to discuss how often such information is shared and during which points in production.

Our experienced team at ET2C International is here to service your quality control needs. Transparency and accountability drive us to continually improve our inspection communications capabilities.

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Why Do You Need a Sourcing Agent in Asia?

Industry Insights / admin / Asia, Quality Control, sourcing

A sourcing agent in Asia leverages your company for greater potential growth and success.

Access to the internet positions the world at your fingertips. Timbuktu endures as a place of legend, but its distant landmarks materialize on your screen in the blink of an eye. Similarly, at the press of a button you can connect with manufacturers on the other side of the world.

It is possible to identify ‘partners’ from the comfort of your own home or office, prompting some companies to buy from suppliers at arm’s length. But they miss out on one of the most valuable services in their supply chain. Qualified sourcing agents in Asia introduce expertise capable of saving time and money along every step of the process. From identifying cost-effective sourcing materials to conducting audit-level quality control checks, professional sourcing agents devote care to managing their clients’ sourcing needs.

Why Source from Asia?

Improved manufacturing capabilities and low labor costs cement Asian sourcing opportunities as some of the most cost-effective in the world. Although China has been the dominant force for the past two decades, other regions such as Vietnam and India are developing a breadth of manufacturing.

Sourcing-Agent-in-Asia-Intersection — Sourcing agents help find the best country and supply chain tailored for your business.

At the government level, both China and India have committed to investing in smart manufacturing. Their efforts are developing a manufacturing base for the future that is driving efficiencies through technology.

China

With the implementation of the Belt and Road Initiative and “Made in China 2025”, China doubled down on commitments to increase transnational supply chains and advancing sustainable manufacturing techniques. One of the pillars of modern outsourcing, China has developed complex supply chains across a vast range of product categories.

Vietnam

Vietnam earns recognition as one of South-East Asia’s fastest growing manufacturing nations. With a lower cost base, it has a comparative advantage in certain categories. A wealth of free-trade agreements reinforce Vietnam as manufacturing hub of the future.

India

With a newly elected pro-business government, India is entering a bright era of skilled manufacturing and production. Best known for expertise in textiles and electronics, the nation is expanding their horizons with Prime Minister Narendra Modi’s “Make in India” campaign. Following the recent election, India is now committed to further investment in technology for the manufacturing sector.

How a Sourcing Agent in Asia Can Help You:

Sourcing agents in Asia can help companies of all sizes source in the region. Scalability and breadth of resource is something that is particularly beneficial. Whether you have just started searching or are looking to enhance your vendor penetration and supplier management capability, sourcing agents present opportunities that a direct sourcing model may struggle to find.

If You Have Never Explored Opportunities in Asia Before

You may feel the risks outweigh the benefits to give it a go without any support. There are certainly suppliers (on platforms like Alibaba) that warrant skepticism and may present pitfalls when it comes to product quality. Sourcing agents, especially those with more years of experience, are some of the finest domestic resources for building your new supply chain.

For companies looking to outsource manufacturing for the first time, entering the market with a sourcing agent in Asia that you trust is equivalent to sitting before a judge with an experienced lawyer as your counsel. They know how the system works and will ensure that your interests are protected whether quality or price.

If You Already Source from Asian Suppliers

A direct sourcing model requires ‘on the ground’ management. In whatever guise, having the ability to develop deep and meaningful relationships will put you in good stead in the future. Just as if your company was manufacturing in your local market, there would be an expectation that you would need to visit and have visibility of any production.

Of course, companies are now able to go direct to suppliers across Asia. It depends on resource and capability in the company doing the sourcing. For example, a sourcing company can help bridge the communication and time difference that companies outside of Asia will face.

There is also an opportunity to leverage breadth of resource and expertise which already exists in-house. When you engage directly with suppliers and manufacturers, you need to manage multiple relationships. With a sourcing agent at the helm, what used to be numerous check-ins, six with suppliers and two with third party quality control, reduces into a single meeting encompassing your entire supply chain.

Sourcing-Agent-in-Asia-Scheduling — A sourcing agent in Asia reduces the time and energy required to manage your supply chain.

If You Encounter Communication Issues or Inconsistent Quality

Vendor accountability can be one of the most frustrating aspects of managing your supply chain. If you don’t have visibility of your production until items are fully “produced,” there is a wide margin for error. Miscommunication and insufficient quality control can ruin entire shipments and waste hard earned cash.

Qualified sourcing agents and companies arrange quality assurance checks along every step of the process to ensure early identification of any issues and present viable solutions. From sourcing from certified suppliers to load monitoring inspections, some agents cover your entire supply chain with transparency. Others may only cover sourcing and require clients to hire their own third party services. Be sure to verify exactly which services your sourcing agent is willing to perform.

If You Plan to Expand or Launch New Products

While your current capability might be sufficient for the time being, you might want to grow in the future. Suppliers may not be capable of taking the next step forward due to their own limitations.

Sourcing agents specialized for your industry are well-equipped to help you expand your business. With a wide range of suppliers, sourcing agents can not only manage potential problems upstream at the factory, but also help you consider the best way forward.

Sourcing agents can also play an integral role in enabling companies to scale their businesses. The allocation of resource combined with local expertise can ensure that a broad supplier base is easily managed.

If your company plans to expand production in their five-year plan, now is the time to connect with a sourcing agent.

Supply-chain-solutions — Expanding your production? It may be time to re-evaluate your supply chain for scalability.

How to Choose the Best Sourcing Agent for Your Company

Identifying an agent or company which understands your sourcing strategy and drivers can be a challenge. To learn more about what factors to consider when choosing the best agent for your company’s individual needs, check out our last article here.

We at ET2C International value understand your needs whatever size of the company. We would love to discuss how our team can provide sourcing solutions for your individualized needs. No matter your current sourcing situation, our team can assess your current sourcing strategy and identify potential opportunities. Contact us to learn more about what we can do for you.

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