S04 EP09: How Not To FAIL Product Inspection? TIPS You Don’t Want To Miss!

S04 EP09: How Not To FAIL Product Inspection? TIPS You Don’t Want To Miss!

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Struggling on getting quality parts? Guess what?! It all comes down to how you can control your inspection! Watch the video now to learn all the tricks about product inspection!

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Full Transcript:

Hello, everyone. Welcome back to the Goodlife Warrior Channel. I hope you’re doing well. Today’s topic is about inspection. Everyone wants the highest possible quality product, but not so many people love to deal with inspection, that’s including me because inspection is one of those things. It’s tedious, lots of communications involved and when the inspection failed, now you have to deal with a very stressful situation. Should I have the supplier replace the entire lot? What if they refuse to do the repairs or replacement?

So today’s video is about inspection. I’m going to draw from my experience in dealing with many inspections and share with you what needs to be inspected and how do you deal with a failed inspection? How much does it cost? Who should you trust? Can you trust your suppliers when they send you photos or videos, or do you always need to go with a third party? There’s a lot to cover. Let’s get started.

By the way, when does the product inspection start? Does it start when your products are finally finished and are staged in your supplier’s factory, the inspector comes to inspect your product? The answer is no. The inspection starts when you receive the supplier’s first sample. That’s when you start to pay attention to the supplier’s quality, start to develop this checklist and this checklist is going to continue to evolve later you will share it with the inspector when the products are finally ready. So inspection starts with the first sample.

Now, when does the inspection end then? Well, if you get a 100% pass inspection report from your inspector, does it mean this inspection is finished, it’s good? Not at all. This only means that you are going to authorize the supplier to ship this product because it’s 100% passed, the inspection according to your inspection criteria. The actual inspection ends with your customer. Their feedback is your final inspection score. Even if you get a 100% pass inspection, once the customer gets your product, there are still could be issued to be discovered. So always pay attention to customer reviews. That’s your final inspection report.

Next question. What exactly needs to be inspected in order for me to have a good quality product after the inspection? Well, this is a broad subject because there are billions of products, right? Each product requires a different specific inspection checklist. How do you prepare yourself? If you’re new to a product niche, it could be getting into a cell phone cover business, a rubber ducky, a toy business, or electronic products, right? How do you prepare yourself so you know how to prepare an inspection checklist so you can have a good quality product?

Well, let me give you a tip. Remember this three Fs, not three fails. The first F is fit. The second F form. Third F function. Fit, form, and function, are the three anchors for you to develop a good inspection checklist. Let’s use the rubber ducky as a quick example so we understand the three Fs. The first F is the fit, right? Does the rubber ducky need to be fit into something? Let’s just say you have a rubber ducky docking station. The docking station is two centimeters wide and your duck is 2.4 centimeters wide. Can your duck dock into your dock? The answer is no because your duck is too wide so that’s fit. Whether it’s a small component fits into another component or is this bigger product fits into another product, you have to think about how everything fits together.

The second is form. Form, mostly referred to the shape, the look, the tester, the touch, and how it looks. So if the rubber ducky is purple, you gave your supplier the RAL number or Pantone color number, but the color is off red or is too yellow, too blue, that is not meeting your specification for the form. The function finally, does the ducky actually float. If there’s a small leaking in the plug underneath the duck valley, this duck may eventually sink into the bottom water, right? So that’s a quick example of fit, form, and function.

Next question, how do you deal with the failed inspections. Well, nobody wants their inspection to fail, it’s the most distressful time of the year after you invest so much time researching the product, developing the product, and then producing the product and then finally you have the product, but the product inspection failed. What to do now?

Well, to deal with the failed inspection, you have to deal with it before the inspection failed. The first thing to remember is, never ever pay more than 30% down payment. If you ever pay 50% down payment or 100% down payment, when the inspection fails and the supplier refuses to work with you to solve the problems, then you will have no leverage. So to deal with the failed inspection, you have to first and foremost remember to create leverage before the inspection fails, that starts from your prepayment.

The second thing is to put everything you want when the inspection fails on your purchase order, say it upfront before you make your down payment. When the inspection fails, [inaudible 00:06:12] your shipment is going to be delayed. It could be for two weeks. It could be two months, right? If that happens, do you demand delayed shipment penalty? Who’s going to pay for the second inspection? Are you going to come up with another $500 to inspect the product again? The supplier is at fault. Who’s going to pay for the second inspection? Say everything you want upfront on your purchase order. That’s what you need to do before the inspection fails.

When the product actually fails the inspection, in your mind, you’ve got to understand what the supplier could do to make it right. The first thing they could do is to rework. That is to deal with the minor issues. It could be a surface scratch or the packaging is dirty. All they have to do is to put some labor on the product, rework, and repair the product. The other one is a replacement. Replacement is the more costly approach. The supplier needs to put out more raw material, but the product back to the production line and reproduce the product. This is a very costly remedy for the supplier. So when you deal with a failed inspection, think about what you want the supplier to do to fix the problem. Is that rework, repair or is a replacement? When is a complete replacement, to keep in mind, you’re going to get a lot more resistance.

Every failed inspection situation is different. What you should do? My recommendation is to stand form. You got to teach the supplier of your quality standard. By the way, I forgot to mention, if you want to have a complete, very thorough inspection checklist for a new product or you want good terms and conditions spelled out in purchase water, you can get both templates in Sourcing Warriors’ mastermind course.

Now, let’s quickly touch base on how much does an inspection cost. Well, I strongly recommend you shop around, get the referrals, join the Sourcing Warriors Facebook group, ask for the specific person who used the specific inspector or a specific inspection company to get recommendations, and see how much they paid for it. The average cost could range between $100 to $300 per Monday. Per Monday means per inspector. If you have one inspector going to this location, it costs $100 and you have two inspectors going to the same location so you can finish in one day, it costs $200, right? But if you only want one inspector to do the job the first day and the second day, it costs you the same, it’s $200. So understand how much per Monday, then you will be able to estimate how many days are needed, then you will be able to figure out how much cost is going to be.

The next question is a very good question. My supplier is a very good supplier. They sent me inspection photos. They even included the inspection video. We really appreciate that. I want to save some money on an inspection, should I trust suppliers’ photos and videos instead of hiring a third-party inspection company? Can you trust your supplier? The answer is yes. Should you trust your supplier? The answer is no. If you want to run your business like a business, remember this, it is inspection each and every time, whether it’s a 100% inspection or random inspection, that is up to you. However, inspections should be eaten every time by a third party. That’s my answer to you.

Now, let’s go back. When does the inspection start? From the first sample, first time when you receive the supplier’s product sample. Where does it end? The customer. Customer feedback is your final inspection. What needs to be inspected? Remember the three Fs, fit form and function. What happens if the inspection fails? Well, you need to prepare before the inspection fails, never pay more than 30%. There’s a reason for it but today we don’t have time to go into the details and you need to have a clear, very firm terms and conditions on your purchase order.

Finally, can you trust your suppliers’ inspection report? Yes, you can and you shouldn’t. So the answer is, each and every time, always use a third party to inspect your product. This will help you to get the highest quality product.

I hope you enjoyed today’s video. If you do get some value out of this video, please do give me two thumbs up and please do subscribe. Talk to you soon. See you in the next video.

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