Why do we need to validate the authenticity and validity of the suppliers' testing reports and certification documents? How do I verify?

By the end of the last article, I asked you a question: After receiving the testing reports and certification documents (e.g., CE, RoHS, REACH, ISO9001, etc.) from the suppliers, do you feel relieved and secretly grateful that you have finally found a qualified supplier, and you are eager to start establishing a formal cooperation relationship with them and put your product into production ASAP?

The answer is definitely no! Now let me tell you why.

• Because if you do this now, you are likely to face no fewer losses and risks in the future than the risks brought by not considering the Product Regulation Compliance Requirement from the beginning. Why?
• The reason is that the authenticity and validity of the testing report and certification documents you received have not been verified. Why do we need to verify the authenticity and validity of these files??

As I have repeatedly emphasized, after all these years of development in the manufacturing industry, China's supply chain foundation is indeed very strong, with a large number of manufacturers in most categories of supply markets. However, due to the influence of objective factors such as the diversification of international market demand on the supply market, these manufacturers in every industry have significant differences in such things as factory size, production capacity, and quality management. Some suppliers may even engage in bad business practices, including providing false testing reports and enterprise certifications to customers, in order to compete for the market. Although the Chinese government has attached great importance to the regulation of commercial fraud for many years, sometimes these behaviors are so secretive that regulatory agencies cannot cover all aspects.

Therefore, until today, these deceptive behaviors towards customers still exist among some suppliers who are unwilling to abide by commercial integrity. It is believed that similar problems occur in the supply market of any country, especially in developing countries. Although this situation is constantly improving, there is still a long way to go before it is completely eliminated. As for Regulation Compliance Requirement Documents, based on my actual experience, some suppliers may engage in the following negative business behaviors that pose significant risks to your future:

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Firstly, the product testing report issued by the supplier lacks professionalism and authority, resulting in the inability of your product to truly pass the Product Safety Standard and Regulation Compliance of regulatory agencies in your country and market.

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The main reason for this situation is that for some very professional and precise testing and certification, there are high requirements for the professional literacy of testing personnel, instruments, environment, etc., which leads to high testing costs. Moreover, the time interval from testing to receiving the report is usually long. Due to the high cost in terms of time and expenses, some suppliers may choose to cooperate with local small testing institutions with insufficient professional capabilities or even no relevant project testing qualifications in order to save costs (and there is even a possibility that some manufacturers' products themselves cannot meet the relevant testing or certification standards).

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Although their testing costs are much lower than those of large international testing institutions such as SGS and Intertek, the problem is that many small and medium-sized institutions, due to limitations such as a lack of experience in the international market, insufficient professional capabilities of testing personnel, and a lack of precision but expensive testing instruments, cannot issue your testing reports or certifications that meet the corresponding international standards. Sometimes there are even cases of private bribery to offer false data and reports. So, even if these testing agencies promise that you or your manufacturer can conduct relevant testing and issue reports, the authenticity and authority of these testing reports and certifications ultimately pose a great risk to you, especially when your countries and markets have high regulation compliance requirements (such as EU countries, the United States, etc.), because once you receive such reports and certifications and the product is imported into your country, it is highly likely that you will be returned or detained by customs due to non-compliance. Even if you can smoothly enter the market, you will inevitably be seized and confiscated by market regulatory authorities. You will also face fines or even administrative penalties for illegal commercial activities, and ultimately, your business and brand reputation will suffer huge losses.

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Secondly, the product model or raw material name on the testing report or certificates does not match the one you require the manufacturer to produce.

NOTICE, many customers in my experience?have overlooked this point, especially for some ODM products.

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Suppliers usually tell customers that their series of products have passed a certain type of testing and certification (such as CE certification), but during the verification process of those reports and certification documents, we have found that many product models or raw material names customers purchase do not match the names on the testing reports issued by the suppliers.

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One of the reasons for this issue is that the supplier later changed the product model or raw material name but did not contact the testing agency to make changes to the testing report.

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If this is the reason, then these testing reports and certificates are no longer valid for the new model and material, and the manufacturer needs to retest and obtain new reports and certificates, but it's obvious that they didn't do that. Another situation is that I have experienced some commercial fraud cases where suppliers changed the product models on the original report without authorization in order to save on retesting costs and issued a false report, which posed a big risk to their customers' orders.

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Of course, for most OEM products, the test reports or certificates provided by the supplier belong to other customers’ orders, so they only serve as a reference to confirm that the supplier has the production capacity to meet the Regulation Compliance Requirements in your country and market or provide you with relevant testing reports for raw materials, such as CE EN71-1 EN71-2 EN71-3, etc. for PE toy products. And for the products you produce in China, especially before they are sold to markets such as the United States, European Union, Canada, or Australia, you need to conduct testing with some large international testing institutions (such as SGS and Intertek) on your products and obtain testing reports or certificates to ensure that all of your products pass the Regulation Compliance Requirements (as for the specific operational steps and risk prevention measures, I will provide you with more details in future articles).

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Thirdly, the testing report or certificate documents provided by the supplier have expired or are outdated for the current product specifications.

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For most testing reports or certificate documents, they have a validity period, usually between 1-3 years or 1–5 years. Except for some raw material testing reports or certificates that may be valid for a long time, there are not many valid long-term testing reports and certifications. Therefore, when you receive the supplier's testing report and certificate documents, it is important to carefully check the validity period indicated on the documents.

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Additionally, it should be noted that I have encountered a supplier who privately changed the expiration date of expired documents on testing reports and certificates.

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Also, it should be noted that I have encountered some suppliers who privately changed the expiration date of expired documents on testing reports and certificates and then thought with a sense of luck that the customers would not go for verification. Fortunately, our colleagues in the document verification department found out and successfully helped our clients avoid the subsequent risks caused by this (as for how to verify the authenticity of these reports and authentication files, I will introduce them to you later).

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Another common situation is that the specifications or technical data of the product used for testing are now outdated.

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That is to say, with the continuous development of technology and industrial design, the model of the product may not have changed, but now the product specifications, technical data, and even raw materials have changed, especially for categories such as smart products, for instance, mobile phones and tablets, etc., that update and change very fast with the rapid development of technology. If that's the case, according to regulations, once your product specifications, technical parameters, or raw materials for components change, the functionality and attributes of the product may also change. Therefore, the previous testing reports have lost their effectiveness for this new product, and the testing reports previously sent by the supplier can only serve as a reference; they indicate that the supplier had the ability to meet the relevant standards of regulation compliance, but they need to retest and obtain reports and certifications for the modified new products. But in my experience, many suppliers do not redo testing due to cost savings and other considerations. Therefore, this also poses a risk for customers that the new products, after changing specifications, technical parameters, and even raw materials for components, cannot be obtained and pass the relevant safety standards and regulatory compliance requirements smoothly.

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Until here, perhaps you can't help but ask: How should I ensure that the manufacturers you have chosen have the ability to pass the Regulation Compliance Requirements of your country and market before investing in the production of mass orders, in order to avoid the risks and losses that may arise from product non-compliance in the future?

I suggest first taking risk prevention measures based on the following aspects:

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Firstly, verify the authenticity of the testing report or certificate documents provided by the manufacturers.

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The specific method is that you need to contact the institutions that provided testing and certification for your suppliers to verify. Of course, many of those institutions are branches of international testing institutions such as SGS Shanghai, and many are local testing institutions on the mainland of China. Therefore, for many customers who are not in China or do not understand Chinese, it is very difficult to contact them and verify the documents because their verification procedures are usually very complex. So, if you have difficulties in the document verification process, you can also email me (my email is [email protected] ), and we will assist you in contacting those testing institutions for the authenticity of testing reports and certificates from your alternative suppliers. We are also very familiar with their verification process procedures, which can save you a lot of time and avoid potential communication issues.

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Next, you need to verify the production process of the sample.

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This is particularly important when your production order belongs to OEM products. Because the testing report previously provided by the supplier to you was for products from other customers rather than your own OEM products, it only has a certain reference value. Because of that, your product may vary in terms of specifications and even raw materials from others. Therefore, in order to ensure that your product meets the product safety standards and regulatory compliance requirements of your country and market, it is very important to conduct specialized testing and obtain reports for your own product samples. At the same time, it is strongly recommended that your product be handed over to well-known international testing companies (such as SGS China, etc.) for testing and the issuance of reports. As I mentioned earlier, the reports issued by these international testing institutions are usually recognized by the customs and market supervision departments of most countries. (I will provide you with more detailed information on the risk issues and avoidance measures that need to be taken during the sample production process in the following articles.)

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Also, after completing the verification during the sample production process, you will need to sign a procurement contract with the manufacturer and officially start the production of mass orders.

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Here, I suggest that there should be a specific description clause for the Regulation Compliance Requirement in the procurement contract and ensure that the manufacturer strictly follows its standards for your mass production. (Note: The establishment and negotiation of procurement contracts is a very complex and systematic professional work, and I will also give a special introduction on the risk points and avoidance methods about it in the future.)

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In addition, for many products with complex production processes or high manufacturing technology requirements, even if the manufacturer passes the testing and certification during the sample production process, you may need to conduct additional testing and verification during the production process of mass orders.

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Especially when your mass order value or product unit price is high, or in those countries and markets with very strict regulatory compliance requirements (such as the European Union) to ensure foolproof Perhaps you find it strange that the products have already passed the testing and certification in the sample production process; why do I still need another test during mass production? Please believe me; perhaps you feel that this is a waste of time and money, but many real-life experiences tell me that it is not. I will provide you with a more detailed explanation of the specific reasons in future articles on risk disclosure and avoidance during the production process of mass orders.

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Alright, the above are some risks that you need to pay attention to when purchasing and establishing a supply chain in China in terms of product regulation compliance, as well as some suggestions on how to avoid those risks. Here I would like to emphasize again that, based on the impact of the international market environment and local objective factors, it is a very complex process to carry out cross-border procurement and establish a supply chain for your business and brand in China. In addition to a series of follow-up impacts brought by the COVID-19 epidemic, these factors also increase the difficulty and complexity of risk management in China.

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However, despite this, the strong capabilities of China's supply chain system are also evident throughout the world and are constantly being optimized and developed with the progress of technology as well as the continuous improvement of market regulatory mechanisms. Therefore, establishing a supply chain in China that is in line with your business and brand development strategy and has long-term development prospects is an absolutely correct choice. And we will always act as the risk manager of your procurement and supply chain in China, helping you to create a safer and more efficient supply-chain ecosystem to support your business growth and help you quickly adapt to the rapidly developing and changing business environment in the digital economy era while enhancing your social and economic value.

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If you have any questions or suggestions or need any help, please leave a valuable comment or send me a message. Thank you for your time.

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I believe you also know that confirming the samples before paying the deposit for the production of your bulk order is one of the necessary key steps to ensure that the supplier will produce and deliver the bulk according to your product specifications.

Also, the production and confirmation process of samples is one of the key steps in the entire supplier screening process, but there are also some risk factors worth your attention. Therefore, in the following article, I will provide you with a detailed disclosure of those hidden risk points in your sample production and confirmation process, as well as effective avoidance methods. See you in my next article!

Thank you for reading.

?(This article is original and all copyright belongs to the author.)

Author: Wesley Liu

Founder & Project Leader of INTEGRITY SOLUTION

The risk manager of your procurement & supply chain in China.