Supply Strategies

1. Conduct appropriate level of due diligence on your suppliers focusing on:

Dealing with reputable suppliers that have a good track record
Requesting customer and trade references and validating them
Speaking with banks, trade associations and government officials
Performing on site inspections
Assessing the competencies of the management team
Using an evaluation system for compare against other potential supplier

2. Review key international quality certifications (ISO 9000, TS 16949) with supplier:

Perform on site inspections to ensure quality control measures are being followed
Use internal experts if available (i.e. QA engineers, Purchasing personnel, others)
For retail companies look into the Fair Factories Clearinghouse (FFC), a non-profit database that tracks audits & compliance monitoring data for China factories (11,000 factory records available over the web) - See www.fairfactories.org

3. Conduct frequent and unannounced inspections using internal or external personnel:

Independent international recognized firms include Intertek (www.interek.com) and Bureau Veritas (www.bureauveritas.com)
Utilize local people to conduct quality reviews that can speak the language, understand the industry and deal with the language and cultural barriers
Document significant areas for improvement in writing and face to face to ensure that issues identified are addressed

4. Conduct your own independent testing (destructive testing, product life cycle, heavy metals, other performance) in the US and document your results.

5. Develop key critical quality objectives for your product upfront and clearly communicate a zero tolerance for these areas.

6. Qualify alternative supply sources in the event of issues.

7. Allocate risk contractually and ensure the supplier knows they are accountable.

8. Visit key suppliers frequently and build strong relations. Strong and longstanding relations are still very fundamental to success in China.

9. Review coverage product liability insurance coverage for China related products frequently. Consider product recall insurance if you are in a high risk industry.

10. Stay on top of the process as dynamics can change quickly in China. Develop a consistent system and let the suppliers know you will be actively involved in the process.