Pre-shipment inspection, or PSI, is a part of the supply chain management function and an integral aspect of quality control procedures for ascertaining the value of goods purchased from overseas suppliers.
Before getting into the nitty-gritty of what is pre-shipment inspection, let’s go back to its history. This practice was introduced in 1994 in an effort to enhance international trade standards under the General Agreement on Tariff and Trade. This was later replaced by the World Trade Organization.
The aim of pre-shipment inspection is to ensure that the production of goods is in compliance with the principal specifications, contract, and/or purchase order. This is accomplished through an inspection wherein random samples of finished products are examined, typically when at least 80 percent of the order has been manufactured and packed for export.
PSI serves several purposes, including:
- Examining the quality and quantity of products.
- Scrutinizing products for defects.
- Ensuring that products adhere to the safety requirements of the destination market.
- Issuing necessary reports for importing and billing.
Certified shipment authorities perform pre-shipment inspections. The procedure presents manufacturers with the opportunity to rectify their products before they are shipped, thereby averting costly import risks. The inspection addresses areas such as functionality, performance, sturdiness, appearance, and dimensions of the products.
Read on to know about what the pre-shipment inspection procedure entails.
1. On-Site Inspection
The inspection of products is carried out at the manufacturing plant or the factory. Inspectors gauge products for defects and use of prohibited ingredients or chemicals. If they find discrepancies, they recommend that the product undergoes further investigation and lab testing. This typically happens when products are suspected of containing toxins and restricted chemicals, which are vigorously regulated by the respective destination market.
2. Authentication of Quantity
Counting of the shipping cartons ascertains that the right quantity of products is shipped. Doing so also ensures that the required number of products/cartons reaches the correct destination. After the counting, the findings of the inspection are accepted by the supplier, the buyer, and the bank, and the payment for a letter of credit is initiated.
The cartons or boxes are also examined to see if the packaging material used is safe for transportation, and whether or not the products have been labeled accurately.
3. Selection of Product Samples
Inspectors randomly select product samples for examination. All certified pre-shipment inspection services use the internationally recognized statistical sampling procedure ANSI/ASQC Z1.4 (ISO 2859-1).
The acceptable number of imperfections in a batch before it is rejected is defined with an Acceptance Quality Limit (AQL). This value depends on the type of product being assessed. The primary aim, however, is to provide an impartial assessment.
4. Verification of Workmanship
The quality control inspector examines the general workmanship of the finished products from the sample. Any visible defects are identified and categorized as minor, major, or critical.
This assessment is based on predetermined acceptable tolerance levels that have been agreed upon by the manufacturer and the supplier during the product development stage.
5. Check for Adherence to Governing Specifications
The inspector thoroughly scans the product’s dimensions, material, construction, color, weight, and markings and labeling.
If the product is a garment/textile, the inspector verifies whether or not the right sizes have been assigned to the shipment. They also verify that the sizes correspond with production dimensions and labels.
For other products, dimensions of the finished product may be measured and compared with the original specifications to certify their acceptability.
Product testing is a crucial component of PSI.
a. Function Testing
- Applies to garment and footwear inspections.
- Pull tests, fatigue tests, and stretch tests are performed to determine the quality of buttons, zippers, embellishments, and so on.
- Advanced tools are used to measure fabric density.
- The number of stitches per inch are counted.
- Thin fabric indicates a poor-quality product that is not resistant to daily wear and tear.
b. Mechanical Safety Testing
- Applies to products with moving parts, like cars and pushchairs that could cause injuries if they are damaged.
- Product’s shape and design are gauged for sharp edges or imperfections that could harm users.
- The safety level of components such as screws and hinges in the final product is verified.
c. Electrical Safety Testing
- Applies to electric products that are required to comply with several safety regulations before they can be certified for use.
- Inspection is typically performed in labs rather than on-site.
- The product undergoes voltage test, current test, insulation resistance test, and ground continuity test.
- The product is shipped only after clearing these tests.
7. Country-Specific Labeling And Marking
The inspector ensures that products carry the necessary country-specific labels and markings. These depend on the type of product, the safety testing required, and the destination market.
For instance, consider you’re exporting an electrical product from China to Germany. In this case, the pre-shipment inspection in China will involve ensuring that the product and packaging meet all the technical regulations laid down by the VDE e.V. Association for Electrical, Electronic & Information Technologies, a standard widely recognized in Europe.
8. Preparing the Report
Upon the completion of the PSI, a comprehensive report is prepared with the pass/fail result clearly mentioned along with the necessary details and key findings. Several reports also include images that display all inspection points that visibly explain the discoveries.
The pre-shipment inspection procedure involves the careful examination of contract goods before they are shipped in a bid to verify their quality, quantity, and price. This procedure provides suppliers/manufactures with the much-needed assurance that their final product is ready for the destination market. Hopefully, the above mentioned PSI steps will help you understand this crucial procedure better.
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