Mitigating Sourcing Risk

Stephen B.: What are the risks you face when sourcing from China and what can you do to mitiate the risk?
Clyde A. Lettsome, PhD, PE, MEM Answer: As you may know, some Chinese manufacturing facilities have made it to the headlines in the last few years for a number of negative reasons. Most often, they have made the news for inserting toxic materials in the consumer goods they manufactured. What I think we can learn from this is that the Chinese manufacturing code and standards may not be at the level that we are use to in the US. For this reason, I think it is very important, when sourcing from China, not only find a manufacture that develop the goods you are importing but also find manufacturing facilities that meet the standards comparable to those in the US. As for mitigation, a few years ago I got a request to accompany an entrepreneur/executive to China to inspect a few manufacturing facilities. I was asked because I am a licensed professional engineer (P.E.). P.E.s promise to protect the public from harm among other things. I suggest you hire the appropriate P. E. to inspect and help you decide which facility to purchase your items from as well as periodically test products for continued high quality. Good luck!

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