A procurement lesson! The CPSC issues Guidance on Repairing Homes with Problem Drywall from China.

April 5th, 2010

What procurement professionals do or don’t do today can come back to haunt your company in the future. Company’s should ensure required steps listed below are a minimum part of all onshore and offshore new supplier selection.

Last year I posted on offshore sourcing and the related problem of homes built with drywall from China. Now the CPSC has issued guidance as to what consumers should do. You can bet that this is not the end of this story. The first question I would be asking is who my contractor bought the drywall from in this country.

Inez Tenenbaum of the Consumer Product Safety Commission told the Associated Press, “We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again.”

Below are some procurement recommendations:

1. Verify the name and address of the supplier or suppliers and their manufacturing addresses, phone numbers, email addresses and fax number. Conduct a cross-reference search of this information and the company name against other supply chain sites

2. Only deal with a company that has a specific company address and other professionally listed contact information.

3. Place multiple calls to the supplier at their provided contact numbers over a period of time and inquire about their company and the primary contacts. Ask for a management breakdown and to speak with at least two members of senior management.

4. Ask for references in the USA or another developed country that you will be doing business with.

5. Inform the supplier that you will be visiting their location for an office/factory tour. There are a number of third parties that can conduct a background checks on your behalf. These companies also have reference reports available. They are well worth the small associated cost.

6. Never agree to any up front payment without a sample or test of the products to be procured. These pre-shipment inspections are a must for any new supplier. You want to ensure that the goods are of adequate quality before placing or accepting any new products.

We look forward to and appreciate your comments.

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