How to protect yourself from bad Chinese products
January 10, 2008 by SwizStick
Filed under China, Supply Chain Management
This advice could apply to just about any low-cost sourcing country, not just China. Just replace China’s name with your low-cost sourcing country of choice. Big hat tip to ChinaLawBlog for pointing out this very informative article from TheLawyer.com. ChinaLawBlog excerpted the important points that companies should follow to protect themselves:
1. “Carefully investigate and continually re-evaluate Chinese suppliers. Unannounced visits and independent product testing should be conducted at multiple points in the production process.”
2. “Require manufacturers to purchase product liability coverage from reputable insurance providers and insist that they be listed as additional insured parties. Distributors should be wary of fraudulent insurance certificates and manufacturers that cancel policies as soon as performance commences.”
3. “Because of the difficulties of litigating against Chinese companies, agreements should require arbitration of any and all disputes arising out of the relationship.”
4. “Conduct regular reviews of product instructions with their counsel and issue warnings to ensure that consumers are properly advised how to use, and are warned of any dangers associated with, products.”
5. Know the “regulatory and reporting obligations to the US Food and Drug Administration, Consumer Product Safety Commission and other government agencies.”
6. “Implement procedures and prepare a response plan to make sure that … regulatory obligations are handled timely and efficiently, and that, in the event of recalls or litigation … resources can be marshalled to retrieve products or respond to lawsuits in an organised and cost-effective way.”
The article concludes by stating that “as with most things, a modest amount of preparation can result in great savings in the long run.”
All good advice.
Too true. Thanks again to ChinaLawBlog for pointing out this article. A good read for anyone who sources from China.
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