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Quality Control
Good Product Design, Good Quality, Product testing and Quality Control (QC) of products can set a company apart in the competition.
Nobody likes the idea of having to call-back products just because the testing process was not thorough and by that losing not only millions of dollars but also market share of lost customers.
Competitive Advantage
What provides the most competitive/comparative advantage (Smith, 1776 and Ricardo, 1817) for retailers and brands alike, doing the Product testing and QC in-house or outsource it (In layman terms: make it or buy it) to a professional testing company like Intertek, SGS, TÜV, etc.?
LEAN Approach
With more and more companies taking a LEAN approach on their operations: achieving more with less, the question is, if it is still the best option doing the QC at each of the manufacturer (decentralized) before dispatching the products or possibly at one hub for all manufacturers (centralized).
Centralized Quality Control
For goods not being shipped in full containers (and requiring consolidation), a centralized approach could be a suitable, lowering cost for retailers (see benefits), setting up a QC room in a centralized consolidation hub/center with either retailer’s own QC and testing staff or outsourced staff.
This provides opportunity for testing companies, either building their own transport and logistics teams (around their key competence) or cooperating with logistics service providers for joint offering to retailers.
What are the benefits?
QC staff travel expenses can be reduced in addition to a possibly increased quality of manufactured goods sent to the centralized consolidation center (due manufacturers not wanting transport not passed items back and forth). A similar handling procedure could be applied for airfreight.
For goods shipped in full containers, a decentralized approach may be most suitable (avoiding additional transport cost and additional carbon footprint) testing goods at the manufacturers premises with announced and unannounced visits keeping manufacturers at their toes and keeping up good quality and not only moving good products to the front when the inspectors are coming to inspect the goods.
Your thoughts?
What are your thoughts? Which testing company is your preferred service provider and why? Do you make use of in-house Product testing and QC or do you outsource all or partially only?
In an upcoming article I will talk more about shipping full containers and the benefit of consolidation.
References:
Ricardo, D, 1817, On the Principles of Political Economy and Taxation
Smith, A., 1776, An Inquiry into the Nature and Causes of the Wealth of Nations, Volume 2, Book IV, p. 244