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  • Writer's pictureJonathan Lee

Buying heavy industry assets from China?

What are the risks of relying solely on ISO9001 certificates?

Does your Chinese manufacturing partner have a ISO9001 Quality Management System (QMS) implemented? Yes? Great! Keep reading because this applies to you.

Most of our clients put a lot of faith in the ISO9001 system and rightly so. It’s proven to be very effective when implemented and managed correctly. More often than not, manufacturers we visit have a certified ISO9001 QMS but it is not effective.

"Whoa whoa, hold on!? I was provided with a current certificate from an accredited third party saying the QMS is all good? Are you telling me it’s not?"

Many companies have isolated issues (know as non-conformances) in their business operations and services to clients and the main purpose of ISO9001 is to certify that the company your dealing with has a QMS that is effective in identifying, rectifying and preventing future issues from occurring.

First let me give you some background on ISO9001 certification before we continue. There are three (3) parties involved:

  1. The Standards Institute (who created the standard);

  2. The Certification Body (approved to audit and certify others to a published standard); and,

  3. The Company applying for certification.

Certification Bodies that are authorised to certify a company are plentiful. Due to this business model (where a multitude of businesses are able to certify a company as long as they pay a fee) it is in their interest for you to pass the audit. Some lesser known bodies exploit this competitive business model further by adding their own competitive advantage of providing ISO9001 certification for an above average fee or even as far as auditors falsifying their surveillance audit reports.

Now let’s back up a minute. I’m not saying that the manufacturer you’re planning on using doesn’t have the ability to manage its own product quality or services to you, the client, but you do need to be diligent and review their system (in relation to your products) prior to placing an order.

"Why do we need to do that?"

Well because I guarantee there will be non-conformances in the ISO9001 system, which if you identify pre-contract you can raise them with the manufacturer, agree to corrective actions and implement change and while you still have leverage. This will save significant headaches, time and money during manufacturing (or when you receive the product). Once you are post contract signing, trust me when I say, your leverage is gone.

Now you’re wondering, "Well, how do I check this. What should I do?"

The answer is simple, organise a trip to the factory, meet with the senior leaders and technical staff and carry out your own audit review. This can cover:

  • A previous project’s documentation from beginning to end;

  • Sub-supplier management process;

  • Incoming goods management process;

  • In-process manufacturing;

  • Quality management; and,

  • Shipping and packing process.

Again Chinese manufacturers are very accommodating and open to you visiting if there is a real chance of them winning a contract. These audits can (in most cases) be completed in less than two (2) days, however most onsite technical employees aren’t proficient in English and documentation will be in Chinese so you do need some assistance to provide you with China manufacturing industry “best practice”, language and cultural expertise, product manufacturing expertise, and successful change management strategies.

Don’t cross your fingers and rely solely on a certificate. Be proactive, identify the issues and put a plan in place to ensure you don’t have to deal with production delays, cost overruns and potentially non-compliant products.

Where to from here?

If your company is looking to begin manufacturing in China, purchasing heavy industry assets or sourcing fabricated steel and building products across the mining, rail and construction industries, give the team at a call or drop us an email to discuss your requirements.


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