Doing Business in China

China sourcing China outsourcing supplier audits necessary for established suppliers own on site monitors at supplier locations

Are supplier audits necessary for established suppliers, or are they only useful for qualifying new suppliers?

You are right that audits are a critical element in selecting a new supplier. However, due to the rapid changes in company ownership, management, customer bases and product focuses in China, I would recommend performing periodic audits on all suppliers to ensure consistency in the supply chain. Such supplier audits are usually not expensive in China, and there are many inspection companies like China Quality Focus that can offer specialized supplier/sub-supplier audit, production monitoring and defect sorting service at a reasonable price (mostly involving hundreds and not thousands of USD). So audits are an affordable tool.

Some companies may prefer to have their own on site monitors at supplier locations. Is this an effective way to ensure supplier performance?

The degree of monitoring that you need depends on the complexity of your requirements and the volume of your business. If your requirements are fairly straight-forward and you only need periodic audits and inspections at the supplier, then it is more cost-effective to hire a third party service provider. If your orders are very large and/or your requirements exceedingly technical, then it may make more sense to have your own auditing team on the ground. But keep in mind that the costs of setting up and managing your own sourcing office in China can be substantial. Therefore, in most cases outsourcing audits and inspections to specialists or using a third-party service provider for vendor coordination will save money while still ensuring reliable production.
China sourcing China outsourcing supplier audits necessary for established suppliers own on site monitors at supplier locations