Tricks of the ECE trade. Part 2

Today, we talk about the entry exam into a huge worldwide market: The initial assessment. Reading this can make and save you lots of money.

Two things happened last week that should make us all sit up and take note:

1.) US President Barack Obama approved a 35 percent punitive tariff on Chinese car and light truck tires exported to the USA. A lot has been written and will be written about this. My hunch: This is the prelude to a protectionist USA that wants to seal itself from imports.

2.) The US dollar pushed the “down” button. Late last week, one Euro bought 1.46 US dollars. The Yuan/Dollar rate is pretty much frozen in the 6.83 area (which is a bad rate for export). The Dollar’s fall makes the Euro strong against the Yuan, making Chinese goods cheaper for Europeans. If the Dollar falls further (and all indications are it will,) the Euro will gain even more strength, buy even more Yuan, make Chinese products even more attractive for Europe.

That’s two of the many reasons why you should continue to focus on the European market. In order to get into the European market, many products need ECE approvals, or E-Marks for short. Which brings us back to the topic we started last week: How to make the E-Mark approval process smooth and painless.

Last week, we said that the first step in receiving ECE certification is called “initial assessment.” An inspector of the technical service will visit your factory and will check whether your factory is able to produce the product in the consistent quality required by the ECE. If you do not pass that initial assessment, you will not receive an E-Mark. The initial assessment is your entry exam into a huge worldwide market. As with any exam, you should prepare for it.

Don’t worry, there will not be a written test. The auditor will not test any products. The auditor’s job is to determine whether your company is able to produce product in consistent, repeatable quality.

A lot of people confuse “quality” with how good a product is. In our world, “quality” is a metric for consistent, repeatable output. Undoubtedly, an S-Class Benz is “better” than a QQ. Assuming for a second that the QQs are being built with zero defects, while the S-Class cars spend more time at the shop than with the owner, then the quality of the QQ would be much higher than that of the S-Class. Just for example.

The first thing the auditor will do is to check whether there is a quality management system in place. If you are ISO 9000 certified, have the certifications ready for presentation, and make sure that they are current. If you have a higher certification, such as ISO/TS 16949, have those certifications ready for presentation, and make sure that they are current.

In theory, you can survive the initial assessment without these certifications. However, you would have to present to the auditor the quality management system in your company (usually a quality manual.) This is pretty much the same as getting ISO 9000 certified, and the auditor will be more at ease when you are at least ISO 9000 certified.

Then comes an essential step: The auditor will check whether you actually implement your quality management system. The auditor will usually follow the flow of the product, from raw material to finished, packed product.

Here is how you can make the auditor happy:

First impressions count: Make sure your factory is clean and tidy.

Show them signs of quality: Auditors love signs. No, banners at the wall that proclaim ”Quality is our eminent goal” don’t impress the auditor. He is looking for signs at stations where quality is checked. The operator who does the checking should have a sign that says within which tolerances the part passes and where it fails. Why a sign? You and I know that the operator knows his job. The auditor wants a sign. Give it to him. Black on yellow would look nice.

Properly calibrated? The auditor will have a peek at the calibration placards on the testing equipment. He will give you a big fat “bu hao” if the calibration is not current. If testing equipment needs on-going calibration against a reference, make sure that the operator can demonstrate how to calibrate the machine.

More signs of quality: Did I mention that auditors love signs? They get very happy when every parts bin is properly marked with the pertinent documentation of the part. The documentation should follow the part throughout the manufacturing process.

“Show me your quality control plan.” If the answer is “which quality control plan?” then the audit is most likely failed. If you can show it, and if it looks that the plan is being used and the data are continuously updated, the auditor will be pleased.

Watch that rubbish: Separate good parts and bad parts as far apart as possible. Failed parts or scrap must be clearly marked. Preferably in different color bins, stored in different rooms. Bad parts in close proximity to good parts result in bad marks in the auditor’s notebook.

Now for the lab-test: If you have a testing lab, the auditor will want to see it. The first thing a seasoned auditor usually does is head for the book in which the tests are logged. He usually can’t read Chinese. What he looks for are the dates, and the frequency of tests logged in the book. If the last log entry was 3 weeks ago, your chances of passing the audit are slim. If he sees signs of continuous testing, he is happy. He is rarely interested in the testing results. What he wants to see is that testing is done on a regular basis in a methodical way. Again, he will look at the calibration placards on the testing equipment. Keep them current.

The results: After the audit is over (it shouldn’t take longer than a few hours, depending on the complexity of your product,) the auditor usually sits down with Management and members of the Quality Assurance group and will discuss his findings. If the auditor is good, he will recommend areas where you can improve further and how. If you have passed the audit, the auditor will tell you. If certain areas need to be corrected, the auditor will tell you the non-conforming areas and what corrective measures you will have to take. The corrective action must be complete; completion must be verified by the technical service. How, is up to the auditor. In mild cases, written documentation may suffice. In more serious cases, the auditor will have to come back for a re-assessment. His time and the ticket from Europe aren’t cheap. Better make sure that you pass the assessment the first time. With the tips above, you should be well on your way. Note that the auditor will in most cases not test or measure any product. He is there to make sure that your company is able to live up to the high standards set by the ECE.

Once you have passed the audit, there will be some paperwork: Your company has to agree to the terms set by the ECE, including surprise visits that may be sprung on you. Then finally, you will get your certification. The certification usually lasts for three years, after that, it needs to be renewed.

Then it’s time for the most important step: Submit your products to the technical service for certification. You can do that when the auditor gives you the verbal ok that you have passed the assessment. Or you may wait until next week, when we talk about the tricks of successful product certification.
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About the author: Bertel Schmitt, Gasgoo's columnist, is CEO of Hong Kong based parts sourcing company Sinamotive. Before founding Sinamotive, with the assistance of U.S. venture capital, Mr. Schmitt was a marketing consultant to Volkswagen AG.