Pre-shipment Inspection is considered essential for Industrial Services – when the business organization buys Goods/ products from overseas. As per the World Trade Organization (WTO), the practice of employing a private Inspection Agency (For Example- a Third-Party Inspection Agency- OSS Certification) for Pre-shipment Inspection to inspect /check the goods’ international shipment ordered details such as price, quantity, and quality of items. The PSI (Pre-shipment Inspection) Agreement acknowledges that these actions fall under the GATT Agreement’s general principles.
The Pre-Shipment Inspection Is Considered Essential for Industrial Services to protect national financial interests (preventing, for example, capital flight, commercial fraud, and customs duty evasion) and ensure that the products /Goods supplied by the supplier are meeting the requirements of the Agreement -such as Quality, Quantity, Price, etc, so on.
Importance of Pre-shipment Inspection or Inspection of Goods for the Industry and business organization
As per ISO 17020, “Inspection” is defined as an examination of a product, process, service, installation, or its design to determine compliance with standards or, based on professional judgment, compliance with general requirements. That means the Inspection has a very wider type depending on the compliance requirements of clients. In general, the common Inspection type is – Incoming Inspection (i.e Inspection of Raw material, BOP, or finished / semi-finished product received from supplier) In-process Inspection and Final Inspection. When we consider product inspection performed by the in-house Inspection Team in the manufacturing Industry. Similarly, the Inspection applies to other conditions also – such as Service, Installation, and Design Inspection at various stages of the design of products.
Pre-shipment Inspection is one of the Inspection Types -where the scope of the inspection is specific to the inspection of products before shipments. During the Pre-shipment Inspection product Quality, Quantity, Packing, marking & Price verification are performed (unless specified). The Pre-shipment Inspection is performed by an Accredited /Competent Third-Party Inspection Agency (i.e OSS Certification). Sometimes the pre-shipment Inspection is termed a Third-Party Inspection also, an inspection performed by an independent Agency.
Pre-shipment Inspection or Pre-dispatch Inspection is important for Industry and Business Organizations. Because before shipment or dispatch of material (Goods) to the client, the manufacturer/supplier organization, must check the Quality, Quantity, and other relevant paraments of products. Ensure that the products are shipped to clients as per the pre-shipment inspection agreement. This Pre-shipment Inspection will help the organization prevent the rejections of Goods at the client or end-user place. So, an inspection of products before shipment is most important for the supplier organization. The Pre-shipment Inspecting can be performed supplier organization itself or can appoint a competent domain expert Third-Party Inspection Agency (i.e OSS Certification) to perform the Third-Party Inspection. This all depends on the Pre-shipment Agreement Between the supplier and Buyer organization.
Also, when the organization wanted to get overseas orders, then appointing the Third-Party Inspection Agency for Pre-shipment Inspection is required for the organization. Ensure that products are in order and per agreement.
In some case, in domestic supply also the buyer organization appoint a competent Third-Party Inspection agency to perform the Third-Party Inspection at the supplier end. As Accredited Third-Party Inspection agencies (i.e OSS Certification) are independent organizations and inspect as per Client approved QAP / pre-shipment inspection checklist. So the reliability of the Inspection report (pre-shipment verification of conformity (pvoc)) provided additional confidence to the client organization. During the Inspection, all the Quality Control parameters are verified and the pre-shipment inspection certificate/ Inspection report is released.
Pre-Shipment Inspection Is Considered Essential for Industrial Services
The Pre-shipment Inspection is considered essential for Industrial services, because of its several advantages. The benefits for Pre-shipment inspection are unlimited, but the most prominent benefits are as given below.
- The reliability of the Product improved
- Quality consistency of products as per requirements
- The quantity of Products matches with order quantity
- Reduced the chance of product rejections as user end
- Packing and product marking as per the Agreement
- The cost of Inspection reduced
What is Pre-shipment Inspection and Its Process?
Pre-shipment Inspection is an inspection of products before shipment of products. Considering the current economic conditions and the demand of customers. Hiring accredited Third-Party Inspection companies (i.e OSS Certification) is the most cost-effective and economical for buyer organizations, rather than having their resources for Inspection at the supplier end. As Accredited Third-Party Inspection Agency has a diversified domain expert inspection team. So, hiring the Pre-shipment Inspection Agency is most economical for Buyers. Where there is an opportunity for the Inspection of multiple diversified products by a single organization.
The methods of Pre-shipment Inspection are as given below
- Receipt of Inspection Query
- Receipt of Product Descriptions, Technical Specifications, Inspection Date, and Place of Inspection.
- Review of Feasibility of Inspection requirement
- Sending offers for Inspection (i.e Pre-Shipment Inspection Fee)
- Contract Review and Inspection Agreement Sign-up
- Development of Pre-shipment Inspection Checklist and taking consent on reporting of Pre-shipment Inspector Report / Pre-shipment Inspection Certificate.
- Conduct Pre-shipment Inspection at the Supplier end.
- Pre-shipment Inspection Report Preparation and submission to Buyer
This is all about the general methods of Pre-shipment Inspection unless specified.
Pre-shipment Inspection as explained above, the pre-shipment Inspection is one type of inspection. Where the scope of Inspection is limited, as it terms pre-shipment i.e before shipment of products (unless specified by the buyers). Generally, the Following points are covered in during pre-shipment inspection.
- Quality of Products
This is to be noted that these are the general requirement. If the Buyer has some other specific requirements for Inspection. Which can be also covered in Pre-shipment Inspection. such as
- Witnessing of Test
- Endurance Testing
- Raw material testing report verification
- Functional Test of Products
- Safety check
These are all about Methods of Pre-shipment Inspection. which are generally performed by the Pre-shipment Inspection (PSI) Agency in India.
What is the Difference Between Inspection and Audit?
Sometimes terms “Inspection” and “Audit “refer to routine business practices, also it is considered the same. But from the user’s point of view, we are explaining both terms in detail. So that in the future have a better understanding of both terms.
Inspection – A product, process, service, installation, or aspect of its design is examined to see whether it complies with certain requirements or, based on professional judgment, whether it complies with all requirements related to Products/Processes/Services/ Installation/ Design of the Product. That means the Inspection teams are used when it is a specific product requirement.
- Dimensional Inspection
- Functional Inspection
- Factory Inspection to verify the capability of the organization /supplier to manufacture the required products as per Requirements.
- Service Inspection – Related to product Quality, Performance, etc.
- Installation Inspection – when there is Assemble of Product or Large Infrastructure Installation, etc.
- Design Review, Inspection of product at various stages of Design, etc.
So, generally, the terms Inspection used, is more specific to Product only.
Audit – A systematic, independent, and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which the audit criteria are fulfilled. The Term Audit is generally applied, when there is verification of the Management System Standard. The Certification Body performed an Audit by verifying the implemented Management System Standard known as ISO Certification Audit. The audit is performed as per Audit Criteria (i.e ISO 9001, ISO 14001, ISO 45001, ISO 22000, ISO 27001, ISO 13485, ISO 22301, etc).
When the Audit Criteria for ISO Certification is ISO 9001 Standard. Then During the Audit, the Auditor will Verify the Audit evidence against Audit Criteria ISO 9001 and after the Audit, the ISO 9001 Certification will be awarded to the Client. If Audit evidence is complying with the requirement. But in the case of Inspection, the only out Come of Inspection is Inspection Report or Inspection Certificate related to the Product. So, when talking for ISO 9001 Certification, then is a Management System Audit performed by ISO Certification Body. Certifying the implemented ISO 9001 Standard not the product of the organization.
With the above examples, it is well clarified the basic difference between Inspection and Audit, could help the user to understand both terminologies better.