Has a product inspection ever revealed an issue with a component or material of your product that is not made by your supplier? Is your supplier using sub-suppliers to make your goods?
When placing an order with a factory, we would all like to think that the factory is going to make the item in its entirety. We would like to think that the same factory is managing the quality of each process to ensure the item is made to our specifications.
The reality is most manufacturers only have the capability to do a few key manufacturing processes in-house. There may be components they do not have the necessary equipment to produce. And these parts will be outsourced to various sub-suppliers. This increases the chances that defects will occur with each additional supplier introduced. More processes among different factories mean more handling of your product and a greater chance that quality standards are not met.
How Can You Tell if Your Supplier Uses Sub-Suppliers?
The key to knowing if your product is made at one supplier is to work out what equipment your factory has. This will reveal which components they are able to make in-house, and what other components they need to outsource. This can be done by yourself on your next visit to China, or by enlisting a third party to visit the factory and audit their production capabilities.
When Are Sub-Supplier Cause for Concern?
If the factory has the capability to make most of the main or critical components in-house, and only relies on sub-suppliers for non-critical components, then there is not much need for concern.
Let’s take, for example, a furniture factory making upholstered lounge chairs. We would expect that the factory has the capability to make the main components like the wooden frame. We might also expect the same factory to be doing the cutting and sewing of the fabric, in addition to assembling and packaging the finished goods. We would not expect that factory is able to also manufacture plastic accessories such as handles.
However, if a factory does not have the capability to make key components in-house, this could be detrimental to your product quality. In this case, the responsibility of quality management processes falls on a sub-supplier of which you may have no knowledge.
Having once been sent to a bicycle “manufacturer” for an audit, we found a factory with only a very basic assembly line, and no metalworking capabilities whatsoever. In fact, this particular supplier was ordering ALL of the components from external suppliers and only assembling and packaging the completed item.
This type of situation can be very risky as your product quality is reliant upon the production capabilities of sub-suppliers with which you are not in contact. Should you have quality issues, it will be very difficult to have them improved in future orders as your supplier has no direct control over materials and components they receive from sub-suppliers.
Overall, the key point is to know what capabilities your supplier has and whether or not they are producing the key components for your items. You should not be concerned if they are sub-contracting some non-critical components or materials to sub-suppliers. Rather, there may be a problem if your supplier has key product components made at different factories.
What’s the solution? First, find out what your supplier is actually capable of manufacturing at their own facility by carrying out a factory audit.?Second, if your supplier is sub-contracting the making of key components, and inspection reveals issues, push your supplier to improve incoming quality or consider finding another supplier altogether.