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We all know that hiring a company to do pre-shipment inspects costs a lot of money. So it’s natural to think that you can come out ahead by choosing a factory that always does good work and ships quality products. That way you can avoid the cost of working with a third- party inspector. It’s important to note however that by not hiring that third-party inspection service providing company you are taking a big risk. If you are thinking about whether to invest in pre-shipment inspections it’s helpful to consider a concept called the cost of poor quality or COPQ. So What Is the Cost of Poor Quality COPQ The cost of poor quality refers to the costs associated with providing poor quality products or services. According to the American Society for Quality COPQ consists of four parts: 1. Internal Failure Costs: Costs associated with defects before the customer receives your product. For example if a product gets made incorrectly and it needs to be scrapped or reworked costs would be incurred. 2. External Failure Costs: Costs associated with defects after the customer receives your product. For example if a customer found a scratch across the front of the picture frame you sold them you could incur costs replacing the item or dealing with customer complaints. 3. Appraisal Costs: Costs to determine the degree of conformance to quality standards. Pre-shipment inspection costs fall into this category. 4. Prevention Costs: Costs to minimize numbers 1 through 3. For example paying for the time involved in developing quality standards implementing quality systems or doing quality planning all incur costs.

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What Does COPQ Have To Do With Pre-Shipment Inspections Pre-shipment inspections incur appraisal costs. At the same time they help you to limit failure costs. Let’s talk about why is that. How Do Pre-Shipment Inspections Prevent Failure Costs As you can see above there are two types of failure costs internal and external. Let’s talk about internal failure first Let’s choose the company making fire pits for this. Before they worked for pre-shipment inspection they had an episode where the fire pit cartons were not being stapled correctly at the factory. Because of this when they received the cartons they were falling apart and products were getting damaged. The company had to bring in terms of people in the United States to rework these units. This incurred tens of thousands of dollars’ worth of internal failure cost. If they had done a pre-shipment inspection they could have avoided this. They would have incurred appraisal costs but the amount would be minimal. Let’s Talk About External Failure Let’s say the company is making plastic cups You specify that the cups are supposed to be blue. On the packaging it says they’re blue but when customers open up the boxes they find the cups are actually red. Now you need to replace all the red cups and you incur external failure costs dealing with customers and getting replacement cups to make them happy. Incurring the appraisal cost of an inspection would have helped you avoid spending this money and having dissatisfied customers.

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It’s easy to look at the cost of pre-shipment inspection and view it only as an expense imagining that you’ll save money by not paying for it. You might have confidence in your factory and you might be betting on their ability to get things right. But when it comes down it you could be leaving yourself open to unforeseen failure costs. What Benefits the Pre-Shipment Inspection Bring to You • Reduction of import risks • Improvement of your sourcing efficiency • No need for you to be on-the-spot save your time and money Want to perform pre-shipment inspection before Get in touch with China Inspection Service Contact US China Inspection Service Limited Address: Room 4-1-3602 Heng Da Hu Fu Guan Cheng District Dong Guan Guan Dong – 523007 China Tel: +86 138 2875 6517 Email: infochina-inspection-service.com Website: www.chinainspectionservice.com