Defining PSI Inspection
Pre-Shipment Inspection or PSI inspection is when the manufactured products are selected randomly from batches and are inspected systematically. This pre-shipment testing is usually done when the production is 100% complete and 80% packed.
PSI Inspection is a mandatory and effective tool to ensure that acceptable quality level standards and specific customer requirements are adhered to. Such product inspections are often done by a pre-shipment inspector who tests the products and makes a final report based on the pre-shipment inspection checklist.
Key Objectives of Pre-Shipment Inspection Procedure
- To determine product defect types and get an idea of the percentage of products that may have these issues.
- To ensure that the product meets the set quality requirements.
- To check if the working of the product is up to the mark.
- As a means of final check of the shipping labels, the packing and other product information.
This inspection process was introduced in 1994 as part of an official agreement to improve international trade standards under the General Agreement on Tariffs and Trade (GATT). It was later replaced by the World Trade Organisation (WTO).
The “Agreement on Pre-Shipment Inspection,” details the principles that should always be applied to the inspections–non-discrimination, price verification and protection of confidentiality to name a few.
7 Steps of the Inspection Process
Step 1 – Onsite Inspection
Onsite inspections, as the name suggests, are inspections that are carried out ‘onsite or at the factory premises. But, when restricted or regulated toxic chemicals or dyes are involved, the pre-shipment inspectors can request that lab testing be done for these products offsite in other facilities equipped for handling the chemicals.
Global businesses are always at risk of quality issues that could arise from manufacturing defects. Such errors can be detected before the shipment during a comprehensive onsite inspection where the inspector is required to visit the manufacturer onsite at the warehouse or production house. During this step, the inspector will use statistical sampling methods to select a sample for checking, and this particular number will also be noted in the quality report.
Step 2 – Verification of Quantity
The second step of the pre-shipment testing is the verification of quantity to make sure that the number of boxes or items ready for shipment is correct. In this step, the inspectors count the cartons so that only the correct number of products and boxes are sent to the shipping destination. The inspectors will also ensure that correct packing materials are being used in all cartons to ensure safe transportation.
PSI inspections are a cost-effective method to reduce risks that could occur from compliance or delays. Checking and verifying the quantity in the pre-shipment stage can help save money, effort and resources that can happen if the right number of boxes or products agreed upon are not shipped. As this can be problematic for both the company as well as the customers.
Step 3 – Choose product samples
A detailed step by step inspection process is integral in several industries including manufacturing and retail to steer clear of expensive import risks, low-quality products reaching the customers, or even huge wastages from product recalls. The third step in the pre-shipment inspection procedure is the selection of product samples.
Internationally recognized statistical sampling methods are used to select the samples from the batches for quality inspection. The defects of any of the selected samples are then compared to an Acceptance Quality Limit before being rejected.
Step 4 – Workmanship verification
A product’s workmanship is like a stamp of quality or like a unique promise from the manufacturer as to how it is different from competitor products. The fourth step of the pre-shipment procedure is the verification of workmanship. The inspector in charge of the quality testing checks the product visually for any defects or issues in the overall workmanship.
The immediately visible defects seen in the randomly selected sample are then classified as minor, major, or critical when compared to predetermined acceptable tolerance levels. These predefined levels are decided by the manufacturer and supplier in the product development stage. Overlooking workmanship issues can be damaging to the company or manufacturer’s reputation in the long run.
Step 5 – Function, Mechanical & Electrical Safety Testing
The fifth step of the PSI inspection involves the conformity verification of the products. The product’s functionality is tested to ensure that there aren’t any functional defects. Physical tests can be performed on the products to determine their strength. Some products may require detailed electrical and mechanical safety testing as well.
Mechanical safety tests are necessary for products with moving parts as these can cause potential harm to the users if not tested properly. The critical parts of the products like screws or hinges are checked in this step. Electrical safety tests are done on electronic products to ensure that the widely accepted safety regulations are adhered to. High voltage tests, leakage current tests, insulation resistance tests, or ground continuity tests are some such tests.
Step 6 – Labelling Phase
In the sixth step of the pre-shipment inspection procedure, the quality control inspector does a quality check of the product labels. This is done to ensure that the sizes specified correspond with the product dimensions and the labels. In the case of electrical or electronic products, there are some country-specific labeling and markings that need to be strictly followed.
UL Certification Mark, CE Marking (USA), VDE (Germany), CSA (Canada), BSI (UK), or the CCC Mark (China) are some such country-specific markings used. Thorough verification of the labels make sure that duplicate or fraudulent products don’t get to the hands or the customers.
Step 7 – Final Inspection Reporting
The last and 7th step of the inspection process is the final inspection reporting. Once the quality testing is done a report is drawn up with an overview of the findings, the inspection details along with the quality pass or fail result. Certain pre-shipment reports will include images of the inspection points, so the defects seen are recorded. The inspection report is then sent to the clients so further steps can be taken to rectify the errors or initiate product recalls in serious cases.
All members involved in the supply chain from the suppliers and importers to sellers are responsible for maintaining product quality and ensuring customer satisfaction. PSI Inspections are an important tool especially for importers or manufacturers to protect their investments. Some well-established third-party inspection companies like Global Inspection Managing can also handle this important pre-shipment function for you before your products leave the factory.
Frequently Asked Questions
Why is pre-shipment inspection important in international trade?
Pre-shipment inspection (PSI) is a critical process in international trade for several reasons:
- Quality Assurance
- Compliance with Regulations
- Risk Mitigation
- Cost Savings
- Building Trust
- Facilitating Customs Clearance
- Market Access
- Documentation and Record Keeping
- Supply Chain Transparency
- Consumer Protection
In summary, pre-shipment inspection is vital in international trade as it ensures quality, compliance, and risk management, ultimately leading to smoother transactions and better business relationships.
What are the key steps involved in a pre-shipment inspection?
Pre-shipment inspection (PSI) involves several key steps to ensure that goods meet the required quality and compliance standards before they are shipped. Here’s an overview of the typical steps involved in a PSI process:
- Contractual Agreement
- Notification of Inspection
- Preparation for Inspection
- Inspection Planning
- Conducting the Inspection
- Reporting
- Decision Making
- Issuance of Certificate
- Final Documentation
- Shipping
- Post-Shipment Follow-Up
By following these steps, pre-shipment inspections help ensure that products meet quality and compliance standards, reducing the risk of disputes and enhancing buyer confidence in the transaction.
When should a pre-shipment inspection be conducted?
A pre-shipment inspection (PSI) should be conducted at specific points in the production and shipping process to ensure that goods meet the required quality and compliance standards.
A pre-shipment inspection should be conducted at strategic points in the production and shipping process, particularly just before shipment, to ensure that goods meet quality and compliance standards. The timing may vary based on contractual obligations, regulatory requirements, and specific circumstances related to the shipment.
What documents are typically reviewed during the inspection process?
During a pre-shipment inspection (PSI), various documents are typically reviewed to ensure compliance with contractual agreements, quality standards, and regulatory requirements. The specific documents may vary depending on the type of goods, the industry, and the destination country.
- Commercial Invoice
- Packing List
- Bill of Lading (BOL)
- Certificate of Origin
- Quality Control Certificates
- Test Reports
- Compliance Certificates
- Import Permits or Licenses
- Insurance Documents
- Proforma Invoice
- Purchase Order
- Shipping Instructions
- Previous Inspection Reports
- Supplier Documentation
- Product Specifications
Can a shipment be rejected after a pre-shipment inspection?
Yes, a shipment can be rejected after a pre-shipment inspection (PSI) if the goods do not meet the agreed-upon quality standards, specifications, or regulatory requirements. Here are some common reasons why a shipment might be rejected following a PSI:
- Quality Issues
- Non-Compliance with Specifications
- Regulatory Non-Compliance
- Incomplete Documentation
- Sampling Failures
- Inconsistencies in Quantity
- Failure to Address Previous Issues
- Buyer’s Discretion
Is pre-shipment inspection mandatory for all exports?
Pre-shipment inspection (PSI) is not universally mandatory for all exports; its necessity depends on various factors, including the type of goods being exported, the regulations of the importing country, the terms of the sales contract, and the specific requirements of the buyer. Here are some key points to consider regarding the mandatory nature of PSI:
- Country-Specific Regulations
- Type of Goods
- Importing Country Requirements
- Contractual Obligations
- Industry Standards
- Risk Management
- Voluntary Inspections
Who conducts a pre-shipment inspection?
A pre-shipment inspection (PSI) can be conducted by various entities, depending on the specific requirements of the buyer, the nature of the goods, and the regulations of the importing country. Here are the primary parties involved in conducting a PSI:
- Independent Inspection Agencies
- Quality Control Inspectors
- Government Agencies
- Buyers or Their Representatives
- Certification Bodies