Careers Business Ownership Quality Inspections in the Supply Chain Share PINTEREST Email Print John Wildgoose / Getty Images Business Ownership Operations & Success Supply Chain Management Sustainable Businesses Operations & Technology Marketing Market Research Business Law & Taxes Business Insurance Business Finance Accounting Industries Becoming an Owner By Martin Murray Martin Murray Twitter Martin Murray is a former writer for The Balance Small Business, and the author of eight books on supply chain management and enterprise resource planning. Learn about our Editorial Process Updated on 03/19/19 When a company purchases items from a vendor they will receive the items and, depending on the nature of those items, a quality inspection may be performed. The inspection of products is also appropriate in other areas of the supply chain such as inspections during the manufacturing process, inspection of the final finished product, and inspections while the items are stored in the warehouse. Quality Inspection of Purchased Items The quality inspection occurs so that a company can verify that the product is within certainly prescribed tolerances in order for the product to be useful. For example, a company may purchase a paint additive to be used in their manufacturing process, but before it can be used, it has to be inspected to see that the chemical and physical composition of the additive is within the tolerances to be used in the process. When a purchasing agreement is made with a vendor, it will define the characteristics of the product that are to be inspected and the tolerances that would be allowed. If the item is received and found to have characteristics outside those agreed upon in the purchasing contract, then the company can have the ability to return the item to the vendor. Inspections at the Vendor The quality inspection can also take place at the vendor’s facility. Some companies prefer to perform the inspection before the items are transported to their manufacturing plant. However, the inspections can incorporate more than inspections of the product, but also inspections of the production facility, equipment, documentation, manufacturing processes, and storage facilities. These quality inspections are important when purchasing agreements are being negotiated. Some vendors may have ISO 9001:2000 Quality Management Standards (QMS) certification which offers customers a greater sense of expected quality and may lessen the requirement of regular inspections. Inspections on the Line When a manufacturing company creates finished goods, it cannot afford to wait until the items are coming from the end of the production line before they are inspected. Production issues need to be addressed early in the process in order to correct problems. This can reduce the loss of raw material and reduce the overall time that the production process is shut down. In every type of industry, there is a process where quality inspections can be performed during production. For example, in the chemical industry, there should be inspections during the process to test the item at certain stages to ensure that the product is within the manufacturing tolerances. In the manufacturer of consumer products, many inspections are performed so that components are tested as the final product is being assembled to ensure that the finished product will be fault free. Finished Goods Inspection When the finished item comes off the production line it should be inspected to ensure that it conforms to the quality standards of which is to be sold. The final check could include not only the finished good itself but the packaging used to ship it to the customer. If the packaging is damaged or not correctly labeled, then this could require the item to be reworked or scrapped. Inspections in the Warehouse Finished goods can be sent directly to the customer or stored in the warehouse before it is sold. For some items, storage for a period of time can alter the characteristics of the product. For example, some products are susceptible to degradation by heat or cold. Finished goods that are produced to be within certain chemical tolerances can be affected by environmental conditions so that some characteristics are no longer within the stipulated tolerances. Inspections in the warehouse can ensure that the finished goods are still able to be shipped to customers. Summary Quality inspections are an important part of the manufacturing process and have a place in a number of areas of the supply chain from goods receipt, production, goods issue, and warehousing.