I would like share a content about industrial inspection that is used in procurement project and is useful for all engineers that are involved in industrial equipment manufacturing process.

This content discusses about second party and third party inspections activities. These inspections are done to confirm purchased goods have the same qualities and quantities that have been stated in their related purchase orders. The commodity inspection and Pre-shipment inspection are the same in many cases.

In pre-shipment inspection, the vendor must make all arrangement that a good to be inspected before loading. But commodity inspection is different, the buyer and manufacturer might decide to do the inspection in the other places. The buyer decides how to handle the inspection on its commodity, in some cases will do the inspection by dispatching its own supervisor or in the other case sends an order to the TPI agency to do it.

The commodity inspector needs to review precisely the proforma invoice, goods quality specification and purchase order in advance. When he/she completed the review, and then can physically inspect the related commodity. Commodity inspector supplies purchaser with an inspection report. The inspector then will issue the inspection release note if it is satisfied from the result of inspection. With inspection release note, the seller will contact with its forwarder company for shipment of the commodity. The seller might notify the third party inspector or buyer inspector to attend to its premises to witness the loading.

An inspection certificate must be submitted by a third party inspection company if there is a letter of credit in place and has been opened in the buyer's bank and mandates the inspection. The certificate must be delivered to the seller's bank. The certificate of inspection must not be issued prior of the specified date in bill of lading. It means the certificate must be issued when the commodity shipped, and seller has no more access to the commodity.

In T/T (Telegraphic) payment method, there is no need for inspection certificate. The buyer and seller might decide to have no inspection or if there is an inspection this is just for buyer assurance, not for bank requirement. This is not routine practice and may happen only in the small transactions. The buyer and seller may have worked for years together and then prefer not spend lots of time to follow procedures for LC opening. In the telegraphic payment system, the inspection visit report and release note might be enough to the purchaser. Normally the purchaser will not ask for the inspection certificate.

The purchaser decides how to define inspection scope. Some purchasers order just 1 man-day for pre-shipment inspection and ask the inspector to check the overall quality, quantity, packing and marking. Some others order to the inspection agencies for more detail inspections i.e. to witness some critical tests. These are needed to be done in the manufacturing processes.

The cost of inspection will be depending to the buyer decision. If the buyer order a stringent inspection and want to supervise some tests that are done in the manufacturing process, then the cost will be a little higher. However in the same time there would be less risk for having the equipment with the defects.

The customers can do vendor inspection and commodity inspection together. In this case they must provide their inspection and test plan to their vendors. The inspection and test plan must be submitted with purchase order. This document identifies all hold, witness and review points in the manufacturing process. The hold points are the points that a manufacturer cannot do the listed tests without attendance of the purchaser inspector. The inspector must be in the vendor shop and supervise the tests. The witness points are the points that a vendor can carry out the tests without attendance of the inspector, but they must notify the purchaser inspector for inspection date. The purchaser might decide to waive witnessing of the test. The review point means review quality control records. Normally these reviews are done when an inspector is in the vendor shop for a hold or witness point.

I hope this article to be useful. I will be so happy to answer to your questions. 


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