When you bring a new supplier on board, it’s not unreasonable to expect some hiccups.
During this adjustment period, your quality assurance department keeps a close eye on the product, making sure everything is up to spec, from materials and workmanship to fit and packaging. Then, as shipment after shipment come in problem-free, you turn your attention elsewhere. You reduce the frequency of your QC procedures, trusting the supplier to reliably deliver product at the optimal quality level—or even to improve further in the long run thanks to the manufacturing learning curve.
Then it happens. A string of poor reviews, customer complaints, product returns, maybe even a recall. You take it upon yourself to investigate why your product ended up on this month’s list of 30 most embarrassing quality fails, and find yourself unpleasantly surprised by the latest shipment of shirts (sneakers, blenders, phone cases). Despite being manufactured by the same supplier and, allegedly, to the same specification, the quality of your product is a far cry from what it used to be a year or two years ago. Welcome to your first brush with the dreaded “quality fade.”
Quality fade: how it happens
Quality fade, also sometimes referred to as “quality creep,” is a phenomenon that many experts dub the single biggest issue in low-cost sourcing countries. Particularly prevalent in China, quality fade is a subtle but progressive deterioration in product quality, usually resulting from deliberate and secretive actions by the manufacturer. After performing a number of production runs to specifications, suppliers may begin to cut corners. The difference in quality is difficult to spot from one shipment to another (especially when one isn’t looking for it), but a “before and after” comparison over a year or more will reveal glaring gaps.
In the world of quality fade, defects happen when suppliers use lower-quality or non-standard materials, parts or components, skip production steps, or simply use less of a certain input than required by the specification. The resulting defects are most likely to be present in aspects or parts of the product that are expected to get less attention during a quality check, including internal components and accessories. As a result, your consumers may receive cosmetics in a cardboard packaging that isn’t sturdy enough to contain the product, a coffee maker with a faulty sealing ring, or shoes with buckles that grow rusty after a light drizzle.
A large body of data from the ground readily corroborates the anecdotal evidence of quality fade found in online publications. During tens of thousands of in-factory quality checks, AsiaInspection (AI) found that made-in-China product quality has stagnated in the long term, with over 26 percent of products found outside of quality specifications in Q3 2018, and overall inspection failure rates on a slow but steady climb during the past year.
The multi-faceted reasons behind quality fade
The question you may be asking is now: why do suppliers resort to quality fade? After all, as a buyer, you’re almost certain to leave a supplier forever once you discover they’ve been chipping away at your product quality for months, if not years. So why risk an established business relationship for what surely must be short-term gain? While it’s easy to blame short-sightedness and greed, the truth is a little more complicated.
Western buyers come to Asian manufacturing hubs looking to lower their costs. The struggling state of retail, the cut-price purchasing culture, and the tariff fallout of the 2018 trade wars only serve to intensify the race to the bottom. Thus, when shopping around for an outsourced manufacturer, brands and retailers are more likely to give their business to the lowest bidder. What they don’t know is that the lowest bidder may have quoted a price below their own costs.
In China, where competition among manufacturers is fierce, the above is a very real scenario. Just to win the customer’s business, the factory will set a price that doesn’t cover the costs of production, counting on secretive cost-saving measures to recoup the losses incurred on the first few production runs. Not every situation is this drastic, of course, but even when the original price quoted is enough to cover the costs, manufacturers struggle to survive on the razor-thin margins in industries where absurdly low prices are now considered par for the course.
It’s not all about money, however: time is also of the essence. When a production run is late, even a well-meaning manufacturer may decide to cut a corner or two, knowing that the resulting quality issue may remain undiscovered for a while or forever, while a late shipment will be immediately noticed and penalized.
Add to this the supplier’s low reputation costs (as many importers don’t share their supplier lists), the incredible difficulty of taking legal action in case of a recall, the time crunch of global supply chains, and quality fade starts looking less like a surprise, more like an inevitability.
Preventing quality fade: before, during, after production
Quality fade is a real problem, but there are clear strategies that help you minimize that risk. The most important principle is constant vigilance at every stage of your relationship with the supplier. Remember that quality fade can happen even after years of trouble-free cooperation, so keep a close eye on your quality figures to determine the optimal frequency for QA/QC checks and interventions.
- Do your homework. Before giving the supplier your business, make sure to carefully vet all key information about them, including their real location and production capacities. A manufacturing audit will provide valuable information on the real state of your chosen supplier and factory. If at all possible, have a few backup suppliers to diversify your risks.
- Reality check. Benchmark your supplier’s price offer against the competition. If it sounds too good to be true, it probably is. And don’t forget, if a factory with the capacity to turn out 2,000 shirts a week promises to deliver 20,000 in a month, they’re almost certainly outsourcing your order. Don’t let this happen without your knowledge.
- Leave no room for doubt. Your engineering and design specifications must be as specific as possible, covering every part and material, as well as production details. Do not leave any part of your specs open to interpretation, and make it very clear to the supplier that you will not pay for products that don’t conform to your requirements.
- Follow up on your promises. Tell your supplier that you will be monitoring product quality regularly—and then actually do it, or your requirements will not be taken seriously. Implement a quality assurance and quality control program that covers all production stages, from raw materials to container loading. Make sure that the actual product checks are carried out by inspectors who are independent of the supplier, ideally ones fluent in the local language and culture.
Sebastien Breteau is the founder and CEO of AsiaInspection, a global leading quality control and compliance service that partners with brands, retailers and importers from over 120 countries to secure, manage and optimize their supply chains using innovative sourcing solutions and real-time supply chain intelligence.