China factory audit

We live in a spreadsheet world, where factory audits around the world rely heavily on ticking boxes.

Of course, that statement is too simplistic and there is more to it than that. But I would argue that qualifying a Plastic Mold Maker with a heavy reliance on documentation can pull all of us into a false sense of security. Although we also use physical audits at times it is our reliance on ticking boxes that can hurt us when we tell ourselves that the audit submitted is true because the person filling it out (auditor or factory) has signed it as being true, and that signature to us in the West translates as honesty, thoroughness, and accountability.

Do we need documented ‘paper’ audits? Absolutely yes and this approach in the West works well as suppliers are generally honest and won’t often risk making false claims on audit forms. In part because they know there can be a lot of repercussions to their reputation and existing business relationships if they lie. The risk is generally too high to outright lie during an audit. Instead when a Western supplier has a shortfall to your desired wants as stated on the audit form they will try to win your business by working with you to address those shortfalls.

But, when trying to qualify an offshore plastic mold maker in China, things are different. While there are a number of forward-thinking manufacturers in China who are looking to invest in their factories to meet customers’ needs (Just like the West does) they are far outnumbered by manufacturers overseen by an average China owner who believes in making money today, get the project, don’t worry about the details, tomorrow’s needs are a luxury…all short-term thinking. To that, there is a good chance that you will encounter a China plastic mold maker, or many, who are working your factory audit system to their advantage, to their short term goals of getting your order, your follow up business is a distant secondary thought to them. They are focused on ticking boxes on your audit form to win the order and not on true working manufacturing solutions needed to address your project goals or company requirements.

With that in mind here are 3 key areas often found on a spreadsheet audit which can be faked, manipulated or overlooked during a ‘paper’ or physical factory audit:

ISO 9000 Series Certifications – There are so many China factories that have ISO style accreditation’s. But do they really have it, did they really get properly audited or did they just pay for it? If accreditation’s are important to you don’t just tick the box as job done. Use your eyes during factory tours and factory meetings to judge for yourself. Do you get the feeling that the factory really has a quality management system that could i) achieve accreditation and ii) have quality personnel in place to execute it and iii) actually positively benefit your project because said ISO is in place? If not there is a good chance they just paid for it, got rubber stamped and are faking it.

Any plastic mold maker in China can buy their way into any ISO style certification. At the end of the day it is way cheaper for factories to buy the certification, so that the ISO box can be ticked on an audit form, rather than the factory actually going through the challenging steps of implementing robust Western style management and quality systems throughout their factory.

The spirit and execution of ISO 9000 series methodology is what is truly important. That being, a manufacturer who wants to improve themselves and commits to changing how they manage manufacturing operations and quality control measures in order to reach higher manufacturing efficiencies, management, and quality control standards. There are very good manufacturers in the West and China that don’t have ISO accreditation, but work to the spirit of what ISO represents. On the flip side, ISO in China has become a tick box issue that almost never lives up to real world expectations. This is a good example of a China supplier knowing how to work you and your audit system.

Imported Equipment – Imported high dollar value equipment is an example of a “tick box” item that many factory audit forms include. There are many China suppliers who have high dollar value imported equipment, but not all use it. For the suppliers who are working you it is there for show, specifically so a box can be ticked on an audit form.

Here is how that works. As a Plastic Mold Maker you know that you need X piece of equipment to pass audits. Go buy something older (cheap) that barely works or doesn’t work at all. Clean it up. Put it on the shop floor. Put it in your equipment inventory list. Bingo, you pass the factory audit on this really expensive point. But you don’t in fact use the piece of equipment and instead you outsource jobs to other factories as needed to make up for not truly having a working solution in your factory. When you visit a plastic mold maker that is not the nicest factory, but they have high value speciality equipment on the shop floor, look closely. Another good example of a China supplier knowing how to work your audit system.

Material Certs – This is another area that you need to look at closely. There is a massive secondary materials market in China full of fake materials. Fake resins, fake steel, fake whatever a factory wants, and all this fake material can come with correct looking (yet fake) certs, the factory just pays for it. What you want is a plastic mold maker who deals directly with authorized dealers in China for steel, resins, and other materials or components. If you don’t qualify materials and material sources properly you will 100% get played.

Why do China suppliers take this risk? i) they are often thinking about today and not tomorrow, and ii) many customers never truly verify beyond ticking a box so there is no great risk to the China supplier.

Take steel for example. There are many instances when an exact steel match is needed to meet any given injection molds exacting specification. But there are many instances when a substitute material may meet the project needs (as deemed by the factory). Your exact engineered steel is surplus to a bad faith suppliers goal of getting the injection mold over the finish line. A substitute steel with a fake cert from a supplier can often work for a period of time that gets the mold passed, shipped, and far enough removed from the China plastic mold maker before you start seeing problems with the mold in your injection mold press back home. By that time the China factory doesn’t care. The China boss knows you are not checking carefully so why not take a shot at making a little bit more off of you? Think of it this way, if they get away with it 2 out of 3 times, they’re doing pretty good. Yet another example of a China supplier knowing how to work your audit system.

When you find a plastic mold maker in China who ticks all the boxes and offers unrealistic pricing you need to ask why and you need to verify closely because they are often faking it. Even if their pricing is just competitive still ask the questions, because for many, if they feel they can play a game on you and work you or your audit system, they will. Don’t let your reliance on your spreadsheet style audit be a substitute for carefully vetting any supplier. Go beyond the audit.

Outside of the 3 examples above there are many ways a typical China supplier will game your audit system. Why? Because they know you are not checking that closely, because geography helps them to play the game, because they know that the West relies heavily on a spreadsheet world where a ticked box answer will often rule supreme.

If you are looking for a transparent Western approach to manufacturing in China then talk to our team today at [email protected]. Try the Jade way today.

Gary Moran

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About Jade:

Jade Group International (Jade Molds), focuses on manufacturing and delivering Western quality injection molds (tooling) at China level pricing so that Western injection molders can compete with and win injection mold production jobs over their China competitors. How? Western methodology and efficiencies which starts with Western engineers using first-in-class tools like DFMPro and Moldex3D to fully qualify each part and mold design before projects are passed over to Western engineers and mold builders living in China. Our hands-on approach in Jade’s Western owned China factory includes Westerners building molds, Westerners who QC molds, and Westerners who trial each mold. Our 100% goal is to deliver great molds that will run well and at speed in your factory back home, right out of the shipping crate. All at China level pricing. Plus, native English, Spanish, Portuguese, or Chinese communication with Jade at every stage of your project. Try the Jade way today – [email protected]