Random sampling inspections are not suitable for every type of product, and in this presentation, you'll learn why this is. Manufacturers of luxury goods, premium electronics, jewellery, medical devices, and other types of high-value products probably can't accept a defect rate of 3%. Random inspections actually don't provide very precise results about the number of defects found - in the ISO 2859-1 standard it even warns users that an AQL limit set at 1% may still return up to 4.95% due to a number of reasons we will look into. Most of the time this won't happen, but in the case of high-value products if this were to happen even occasionally there is no way this wouldn't lead to cost or safety issues. There are better options for importers in this situation, and we'll also explore them as an alternative to random sampling inspections. _________________________________________________________________________________ Get assistance to assess your products' quality from our experienced Quality Assurance team on the ground in China and SE Asia here with our collection of solutions which are perfect for importers: https://www.sofeast.com/quality-assurance/ Watch the video of this presentation here: https://youtu.be/W-Q2bnKgzDo

1. High Quality Standard?
Don't Do AQL Inspections.

2. When random sampling inspections
are NOT the right choice
If having 3% of defects in a batch can incur very high costs (likely to wipe your
margin out and cause a loss in customer confidence), typical random inspections
are NOT appropriate.
This would be the case for products where the quality standard is very high, such
as luxury goods, premium electronics, aerospace parts, and medical devices.

3. Don’t assume that AQL provides exact results
An AQL does not guarantee precise results in terms of defects found, this is
exactly why it isn’t the best choice for importers with a high quality standard.
Some buyers assume the following:
I followed what the ISO 2859-1 standard advises by default: normal severity, level II.
I placed an upper limit (AQL) of 1% on major defects.
The inspector picked a number of cartons that is considered sufficient in the QC industry
(at least the square root of the total number of cartons), and then picked some samples
randomly inside these cartons.
100% of cartons were packed and were nicely lined up, so the cartons were picked in good
conditions and it was possible to check that the whole quantity was presented.
Therefore, I can be confident that neither I, nor my customers, will ever find more
than 1% of defects in that batch.
But this is not the case, as we will see…

4. The findings of a random inspection are not 100% accurate
Page 38 of the ISO 2859-1 standard shows the consumer’s risk for normal
inspections.
If you set the AQL limit at 1%, and if the sample size is 200 pieces, you might
still receive up to 4.59% of defective goods!
Why does the standard allow for such a difference between the objective and
reality’s worst case?
Because there is a risk that the sample be worse than the average of the batch.
The producer’s risk of getting a batch rejected even though it should be
accepted is capped at 5%. Obviously the standard is more favorable to the
supplier than it is to the buyer.

5. Statistics give a rosy picture… that doesn’t correspond to
reality
The consumer risk is based on the assumption that defects are somewhat
randomly spread in the batch being checked.
In reality, there are often clusters of defective pieces. For example, the battery
cover is good for the first 95% of a batch. But, for the last 5%, the manufacturer
notices they are missing the right cover. So they use old covers that were put
aside a few months before (because the color was off).
What is the probability that some of these cartons (containing faulty covers) will
be randomly picked for inspection? Not very high.
[By the way, make sure the factory writes numbers on cartons before the inspection, and ask the
inspector to write what cartons he picked in his report. Making every party accountable is always a
good idea.]

6. You, or your customers, will probably not follow the same
sampling plan as the inspector in the factory
Let’s say you deliver 20,000 pieces to your customer’s DC (Distribution Center).
Then they send 3,000 pcs to a regional DC. The regional DC opens a couple of
cartons, for a quick inspection. And you are out of luck: one of these two cartons
is full of defective pieces. Ouch!
This example is not extreme.
The problem is, the customer will tell you “the quality is unacceptable on all
your products; we are sending this batch back to you.” And it’s hard to change
their mind even with a rational explanation.

7. Human errors happen
Inspectors are not machines. Inattention and laziness, poor training, pressure (or
more) from the manufacturer, all come into play and can significantly alter the
reliability of findings.

8. The factory might play games after the inspector is gone
When off-the-shelf products are checked, the factory can easily replace the
(good) products that were presented by a substandard batch. Or they might want
to slightly decrease the quantity of pieces in each carton.
Who knows what they might do if they are fundamentally dishonest and short-
term thinkers?
A container loading supervision might help in this case, as it provides more
scrutiny over what happens to the finished goods.

9. What if I set my AQL limits to be tighter than standard?
It makes sense that having a stricter AQL will equal fewer defective goods
reaching you.
However, Chinese suppliers will usually raise prices if you insist on a lower
proportion of defects, as they tend to think there is only one ways of increasing
the quality standard:
 More manpower spent on inspection activities
This is an old-school approach which merely reacts to the presence of defects.
How about reducing the occurrence of defects in the first place?

10. So what are the better inspection options if you import
products with very high quality standards?
 As a buyer, I would feel much more confident having a team of inspectors
working together on 100%, piece-by-piece, inspections, sorting defects out,
and sealing cartons before they go.
 If checking every piece is a bit too expensive, a dynamic sampling plan might
make sense: start with a random sample, and then go up to 100% if a high
proportion of defects is found (but look only for those types of defects).
 Some buyers even require a 200% inspection when they MUST have a very low
proportion of defects. It all depends on what you can afford to pay, and how
much a few defects might cost your business.

11. Weeding out defective products is one thing, but, especially in the case of high-
cost and quality products, working to reduce the defect rate with your
manufacturer is a better use of time and funds in the long run.

12. A high defect rate is expensive
A high defect rate is actually quite expensive. Here are a few examples of such
costs of poor quality:
 Scrap or rework
 Re-inspection / re-testing after a failure
 Disruption of production planning to address an urgency
 Expediting and/or discount given to customer
 Loss of customer confidence in the long run

13. When does reducing the cost of poor quality become
impractical?
 Reducing the defect rate pushes the “costs of poor quality” down and benefits the
bottom line…
 … But after a certain point the cost of preventing and catching defects becomes so
high, it offsets the costs of poor quality.

14. But you CAN reduce defects without increasing costs
If your supplier immediately suggests a cost-increase to reduce defects, you may
perhaps work with them on design and production processes.
Here are some suggested actions that improve quality without increasing the
average unit cost:
 Simplify the material and information flow
 Design products so that they are less complex to make and less likely to be defective
 Try to improve each process step, document the new procedures, and train the operators
 Accelerate the flow of production, to get finished products earlier and detect problems as
quickly as possible
 As soon as a problem is detected, look for its root cause and implement corrective actions
 Set up fool-proof devices (poka-yoke) to prevent defects at the source, when possible
 Make operators feel a certain “ownership” of their process (JKK), and have them do a “self
quality check”

15. High Quality Standard?
Don't Do AQL Inspections.