Sourcing guide · Supplier qualification

Auditing an Aluminium Profile Supplier: Factory, Trader, or Something in Between

The factory-versus-trader question is the wrong question. What matters is which party actually controls the press, the die and the quality record. Here is how to find out, how to price the difference properly, and how to run the audit.

14 min readSupplier auditTotal cost of ownershipDie ownershipContract terms
Aluminium profiles formed from ingots through extrusion

Every sourcing guide frames this as a binary: buy from the factory, or buy from a trading company. The framing is tidy and it is wrong. In the aluminium extrusion trade, the great majority of suppliers sit somewhere between those two poles, and the position they occupy determines almost everything that matters commercially — who controls the die, who can change a specification, who carries the quality risk, and who is able to tell you the truth about a delivery date.

The reason the binary framing persists is that it suits the party asking the question. A factory wants you to believe that buying anywhere else is paying a middleman for nothing. A trading company wants you to believe that factories cannot communicate or manage a complex order. Both are describing a real advantage and both are omitting the corresponding cost. A procurement director’s job is to price both honestly.

This guide is written for the person who signs the supply agreement and owns the consequences: the procurement director or supply chain manager setting up an aluminium profile category. It sets out the supplier archetypes that actually exist, eight checks that establish what a supplier genuinely is, a total cost of ownership model with worked numbers, a weighted scorecard, a two-day audit itinerary, the red flags worth walking away over, and the contract terms that prevent the disputes this industry produces most often.

What you are actually buying

One principle is worth stating before any of the detail, because it resolves most of the arguments that follow. You are not buying aluminium profiles. You are buying a supply relationship that has to survive a specification change, a quality failure, a currency movement and a schedule slip. A supplier who is cheap and cannot absorb any of those events is not cheap. A supplier who is expensive and absorbs all of them may still be the better buy. Price the relationship, not the tonne.

Quick answer

Nine points that decide the sourcing decision

Items 2 and 3 are the analytical core. Item 5 is the one that generates the most disputes, and item 9 is the one that determines whether a bad year is an inconvenience or a crisis.

1

There are four archetypes, not two A pure extruder with no secondary processing, an integrated manufacturer with extrusion plus machining and finishing, a group with equity in several plants, and a pure agent. Each has a different cost structure and a different failure mode.

2

Establish what the supplier is before you price what they offer Eight checks do this, and every one is independently verifiable: business scope, emission permit, press tonnage and count, anodising tank length, die ownership, electricity consumption against claimed output, export records, and whether the quality certificate actually covers the site you are buying from.

3

A 5 to 15 percent unit price saving is not a saving until you have priced the rest Inventory carrying cost, quality failure cost and management cost frequently exceed the unit price difference. In the worked example below, an 8.8 percent unit saving becomes a small net loss once the other three lines are included.

4

Lead time is a cost, not a service level A longer lead time means more safety stock, and safety stock has a carrying cost of roughly 15 to 25 percent of its value per year. A supplier who is 20 days slower is asking you to fund that difference.

5

The die is the real question Who owns the die, who can move it, who pays for its maintenance, and what happens to it if the relationship ends. This is the single most common source of disputes in Chinese aluminium profile sourcing and it is settled entirely by paperwork you either have or do not.

6

Quality cost is PPM multiplied by consequence, not PPM alone A defect rate means nothing without the cost of a defect. A 3,000 PPM rate on a part that costs 40 dollars to rework is a different supplier from the same rate on a part whose failure stops a line.

7

Score the supplier, do not rank them by instinct A weighted scorecard with published weights forces the trade-offs into the open. Six dimensions, adjustable weights, a documented score. It also makes the decision defensible to your own organisation.

8

Audit in two days, with a written itinerary One day of documents and extrusion, one day of finishing, machining and quality. A visit without an itinerary is a tour, and a tour produces a brochure.

9

Single sourcing is the risk, not the strategy A primary supplier at 70 to 80 percent, a qualified second source, and a trader for small or multi-category orders is the configuration that survives a disruption. Concentration is a cost decision made in advance of the event that punishes it.

Landscape

The four supplier archetypes that actually exist

Before scoring a supplier, establish which of these four they are. The distinction is not about honesty; all four are legitimate businesses. It is about which capabilities are inside the supplier’s control and which are subcontracted, because that is what determines who can fix a problem and how quickly.

ArchetypeWhat they controlCost structureWhere they fail
Pure extruderPresses, dies, heat treatment, cutting. Usually no machining and no finishing in-house.Lowest conversion cost. Sells by the tonne with a narrow service envelope.Cannot deliver a finished component. Any machining, anodising or assembly is subcontracted, so the supplier cannot control the quality of the operations that most often cause rejection.
Integrated manufacturerExtrusion plus in-house machining, anodising or coating, and often assembly and packaging.Higher conversion cost, but one organisation owns the whole process and the whole quality record.Capacity is finite and the finishing lines are the bottleneck. A busy anodising line becomes the lead-time constraint for every order in the plant.
Group with equity in multiple plantsA holding structure with part-ownership of several extrusion and finishing facilities, plus its own sales and engineering function.Between the two. Flexible capacity, and the ability to route an order to whichever plant has capacity.Quality consistency across the group’s plants is the risk. The sample you approved and the plant that runs your production order may not be the same site.
Agent or pure traderCommercial relationships, documentation, logistics and sometimes consolidation across categories. No plant of their own.Adds a margin, and in exchange absorbs coordination and risk.Cannot control quality or schedule directly. The failure mode is transparency: when something goes wrong, the root cause is one step further away than the person reporting it.

The practical consequence of this table is that the question to ask a supplier is not “are you a factory?” but “which operations are in your own buildings, and for the ones that are not, who does them and under what agreement?” A supplier who answers that precisely is more useful than one who answers the first question with a yes.

There is a second dimension that the archetype table does not capture and that matters at least as much: product focus. A plant running standard catalogue profiles from stock dies behaves completely differently from a plant running custom dies to order. The first can ship in days and will resist your customisation because it disrupts a stock business. The second can produce exactly what you designed and will make you wait six weeks and pay for a die. Both are viable; neither is a substitute for the other, and a supplier who claims to be excellent at both is usually excellent at one.

Verification

Eight checks that establish what a supplier really is

Every check below can be completed without the supplier’s cooperation beyond supplying documents, and several can be completed without their cooperation at all. That independence is the point: a verification step that depends entirely on the supplier’s own description of itself is not a verification step.

1

Business scope on the registration record

The registered scope of business tells you whether the entity is licensed to manufacture or only to trade. Look for manufacturing and processing activities in the scope, and check that the registered address matches the site you intend to audit. A supplier whose registration is a trading scope at an office address is a trader, whatever the website says.

2

Environmental permit, which in this industry is unusually informative

Extrusion, anodising and coating are regulated activities with environmental requirements attached, and those permits are tied to a specific site and a specific process list. An anodising line without a corresponding permit is either not running or not compliant, and both are reasons to look elsewhere. This check is more reliable than a factory photograph.

3

Press tonnage and press count

Tonnage determines the maximum cross-section the plant can produce and, combined with the number of presses, the realistic monthly output. Ask for the press list with tonnage and age, and look at the presses during the audit. A plant claiming heavy-section capability without a large press is describing someone else’s plant.

4

Anodising tank length, if finishing is claimed

The tank length sets the longest component the line can process, and it is visible on a walk-through. This single dimension often decides whether a supplier can actually handle your longest profiles, and it is a claim that cannot be fudged in a catalogue.

5

Die inventory and die ownership

Ask for the die list with ownership status and the number of dies held on behalf of customers. A plant with a large library of customer-owned dies is a plant that has a functioning custom-die business. A plant with no die list is either not doing custom work or not tracking it, and both matter.

6

Electricity consumption against claimed output

Extrusion is energy-intensive, and consumption per tonne is a narrow band for a given technology. A plant claiming an output that its metered consumption cannot support is either overstating capacity or outsourcing the work. This cross-check is rarely performed and rarely fails to be interesting.

7

Export records

Ask for a sample of customs declarations or bills of lading from the past year, and check the shipper and consignee against what you have been told. Independent trade data can corroborate this. A supplier who claims to export to Europe and cannot produce a single shipping document for the region is telling you something.

8

Whether the quality certificate covers the site you are buying from

A quality management certificate is issued to a legal entity at a specific address, with a defined scope. Check the certificate against the site and the processes you are actually buying. A group certificate that covers a parent entity does not automatically cover the plant that will run your order, and the scope statement is where that is decided.

The address on the certificate

One check is worth repeating because it is the most frequently skipped and the most frequently consequential: the certificate address. Buyers routinely accept a scanned quality certificate as evidence that a supplier is certified, without reading which entity and which site it applies to. In a group structure this can mean that the audited and certified site is not the site that produces your order. If your own quality system or your customer’s requires a certified supplier, the certificate has to match the manufacturing location, and that is a five-minute check.

Aluminium profiles formed from ingots through extrusion
Aluminium profiles formed from ingots through the extrusion process. The physical sequence is easy to observe on site and hard to simulate, which is why a walk-through remains the most reliable verification step available.

Economics

Pricing the difference properly: a total cost of ownership model

The unit price is one line in a calculation with five. The reason the factory-versus-trader debate never resolves is that both sides argue about the first line and neither prices the other four. Here is the model, followed by a worked example using realistic numbers.

TCO = (Unit price × Annual volume)
  + Die and tooling amortisation
  + Freight, duty and clearance
  + Inventory carrying cost
  + Quality failure cost
  + Management and communication cost
  + Switching cost, annualised

Each line has a defensible way of being estimated, and all six should be estimated before a supplier is selected. The three that buyers most often leave at zero — inventory, quality failure and management — are the three that most often reverse the decision.

Inventory carrying cost
Average inventory value multiplied by a carrying rate. The rate should include the cost of capital, warehousing, insurance, obsolescence and shrinkage, and in most industrial businesses it lands between 15 and 25 percent per year. Average inventory value is derived from the lead time plus safety stock, so a slower supplier directly increases this line.
Quality failure cost
Defect rate in parts per million multiplied by annual volume, multiplied by the cost of one defect. The cost of one defect must include inspection, rework or scrap, the administrative cost of the claim, and — where the part reaches production — the cost of a line stoppage. This is why the same PPM figure can be tolerable in one application and unacceptable in another.
Management and communication cost
The internal hours a supplier consumes per year, multiplied by a fully loaded internal hourly rate. A supplier who requires chasing, who cannot answer a technical question without an intermediary, or who needs every issue escalated consumes real internal cost. Estimate it honestly; most organisations can name the suppliers who consume the most hours.
Switching cost
First-article approval, sample rounds, trial production, documentation and the residual risk of a new supplier failing during ramp-up. Annualise it over the expected life of the relationship, and treat it as a real cost of changing suppliers rather than as a one-off.
Die and tooling amortisation
The die cost divided by the volume over which it is amortised, plus the expected maintenance. Note that if the die is customer-owned, this is a capital item you control, not a cost the supplier carries — which is itself a negotiating position.

Worked example: the saving that disappears

The numbers below are illustrative but internally consistent, and the shape of the result is the point. A buyer compares two suppliers for an annual requirement of 120 tonnes of a machined profile at roughly 1.5 kg per piece, which is 80,000 pieces per year.

Cost lineIntegrated manufacturerTraderDifference
Unit price3,200 per tonne3,480 per tonneTrader is 280 per tonne higher
Annual material cost (120 t)384,000417,60033,600 in favour of the manufacturer
Lead time and safety stock45 days lead time; 60 days of safety stock required25 days lead time; 30 days of safety stock required30 days of additional stock at the manufacturer
Inventory carrying cost at 20 percentAbout 6,300 per year on the additional stockBaseline6,300 in favour of the trader
Quality failure cost8,000 PPM → 640 defects × 45 per defect = 28,8003,000 PPM → 240 defects × 45 per defect = 10,80018,000 in favour of the trader
Management and communicationApproximately 200 hours per year = 12,000Approximately 60 hours per year = 3,6008,400 in favour of the trader
Net position384,000 + 6,300 + 28,800 + 12,000 = 431,100417,600 + 0 + 10,800 + 3,600 = 432,000Trader ahead by about 900

The manufacturer is 8.8 percent cheaper per tonne and slightly more expensive in total. The unit price advantage of 33,600 is more than consumed by 6,300 of extra inventory, 18,000 of extra quality failure and 8,400 of extra internal management time. Nothing in this calculation is exotic and every line is estimable before the order is placed — which is exactly why leaving them out is a choice rather than an oversight.

The model is a negotiating instrument

Two things follow from the example, and both are more useful than the conclusion. First, the answer is sensitive to the inputs: change the defect cost from 45 to 90 and the manufacturer becomes clearly worse; change the carrying rate from 20 percent to 8 percent and the manufacturer wins. The model does not produce a universal answer, it produces your answer — which is the reason to build it rather than borrow someone else’s opinion. Second, and more important commercially, the model shows you what to negotiate. The 8,000 PPM figure and the 45-day lead time are the manufacturer’s weaknesses, and both are negotiable in a way that the unit price is not.

Extrusion production efficiency and press output
Extrusion output and press efficiency. Claimed capacity can be cross-checked against metered energy consumption, which is a more reliable indicator of actual production than a catalogue figure.

Selection

A weighted scorecard, with weights you set

A scorecard is useful for two reasons that have nothing to do with arithmetic. It forces the trade-offs into the open before the preference forms, and it produces a decision that can be explained to the rest of the organisation. The weights below are a reasonable starting point for an industrial aluminium profile category; change them to reflect your business, and publish the change.

DimensionWeightWhat it measuresEvidence to score against
Manufacturing capability25Press tonnage and count, finishing line capability and length, machining capacity, inspection equipment, and whether the operations you need are in-houseEquipment list, on-site observation, tank length, machine count
Quality system20Certification that covers the site, process control, traceability, first-article and PPAP capability, calibration records, non-conforming material controlCertificate and scope, calibration log, sample quality record, traceability exercise during the audit
Delivery and flexibility15Lead time, minimum order quantity, ability to handle expedited orders, stock policy for standard items, response to a schedule changeQuoted lead time, MOQ, observed finished-goods stock, a test request for an expedited order
Commercial transparency15Clarity of quotation, alloy and temper stated, die ownership terms, price adjustment mechanism, willingness to disclose who performs subcontracted operationsWritten quotation, die agreement, price adjustment clause
Engineering support15Drawing review and design-for-manufacture feedback, tolerance advice, sample turnaround, technical response time without an intermediaryA live test: send a drawing with a deliberate question and time the response
Compliance and stability10Environmental permits, restricted substances declarations, financial health, length of trading history, export recordPermit, declaration, registration and trade records, financial statements if available

Score each dimension out of its weight, sum to 100, and record the evidence beside each score. The rule that makes the exercise work is that a score without evidence is not permitted. If you cannot point at a document or an observation that supports the number, the number is a preference and should be left blank until it is not.

Two practical notes on using it. First, run the scorecard before the price negotiation, not after. A scorecard completed with the price already known tends to produce scores that justify the price. Second, keep the scorecard current rather than re-running it from scratch at each review; the useful signal is the direction of travel, and a supplier who has slipped from 78 to 64 over eighteen months is telling you something that a single snapshot cannot.

On site

The two-day audit itinerary

A factory visit without an itinerary is a tour, and a tour produces a brochure. The itinerary below is organised so that each session has a specific question to answer, a specific thing to look at, and a specific red flag to watch for. The order matters: documents first, so that what you see on the floor can be compared against what you were told.

SessionAsk forLook atRed flag
Day 1 morning: opening meeting and documentsRegistration record and business scope, environmental permit, quality certificate and its scope, press and equipment list, die list with ownership, calibration scheduleWhether the certificate address matches the site, whether the permit covers anodising or coating, whether the die list names customer-owned diesA certificate for a different address; a finishing process claimed with no permit for it; a die list that does not exist
Day 1 afternoon: extrusion and heat treatmentPress log for the current week, output figures, scrap rate, billet supplier and alloy certificatesPress tonnage against the equipment list, die storage and identification, ageing ovens and their temperature records, billet stock with alloy markings, scrap segregationPress tonnage lower than claimed; dies stored loose and unlabelled; temperature records not kept; unidentified billet stock
Day 2 morning: finishing and machiningAnodising or coating process parameters, film thickness records, sealing test results, pre-treatment chemistry records, machining first-article recordsAnodising tank length against your longest profile, film thickness gauge and its calibration, coating line and oven, CNC machines and their condition, work instructions at the machinesFilm thickness reported as an average only; gauge out of calibration; no sealing test; work instructions absent or outdated
Day 2 afternoon: quality, warehouse and close-outCalibration records for measuring equipment, non-conforming material register, customer complaint log, traceability record for a recent orderThe laboratory and its equipment, the non-conforming material cage, finished goods and their identification, packaging against your requirement, a live traceability exerciseNon-conforming material mixed with good stock; traceability that cannot be demonstrated on demand; packaging that will not survive the journey

The traceability exercise on the second afternoon is the single most informative hour of the visit. Take the identification number from a finished component in the warehouse and ask the supplier to show you the production record, the material certificate, the heat treatment record and the inspection result for that specific item. A supplier who can do this in ten minutes runs a system. A supplier who cannot is relying on you not asking.

Long material processing capability at an extrusion plant
Long-material processing capability. Handling, cutting and finishing capacity for long profiles is visible on site and is a capability that cannot be inferred from a catalogue.

Screening

Twenty red flags worth walking away over

These are observable signals rather than conclusions. Any one of them can have an innocent explanation; three or four together describe a supplier whose problems you will inherit. They are ordered roughly by how much they cost to discover late.

The quality certificate is issued to a different entity or address than the site that will run your order.
Anodising or coating is offered but no environmental permit covers that process at that site.
The registered business scope is trading only, with no manufacturing activity.
Press tonnage or count is lower than the capability claimed in writing.
No die list exists, or dies are stored unlabelled and unsegregated.
Film thickness is reported only as an average, never as a minimum with raw readings.
The film thickness gauge cannot produce a current calibration record.
No sealing test is performed or reported for anodised product.
Non-conforming material is stored in the same area as saleable stock.
Traceability cannot be demonstrated on a specific finished item within a reasonable time.
Billet or log stock is unmarked, or alloy certificates cannot be produced for a specific heat.
The supplier will not disclose which operations are subcontracted.
Die ownership is not documented, or the supplier claims ownership of dies the customer paid for.
Quotations name a price and a cross-section but not the alloy and temper.
Lead times quoted verbally differ from lead times quoted in writing.
Expedited orders are accepted by the sales team without any visible process for rescheduling production.
The quotation price is not linked to any aluminium price index, in a category where the metal is most of the cost.
Customer references exist but none are contactable, or none are in your application or your region.
Sample turnaround is fast and production quality is materially different from the sample.
The supplier is unwilling to accept a third-party inspection clause in the contract.

Two of these deserve a comment because they are commonly dismissed as commercial rather than technical. The first is the absence of a metal price index link. Aluminium is the dominant input cost in this category, and a supplier quoting a fixed price for twelve months is either pricing in a large risk premium or planning to renegotiate the moment the market moves. A published index with an agreed formula is better for both parties. The second is the refusal of a third-party inspection clause, which is not a technical capability question at all: it is a question about whether the supplier believes its own output will pass.

Agreement

The contract terms that prevent the usual disputes

In this category, a small number of clauses prevent a large proportion of the disagreements that arise. None of them is unusual and all of them are cheaper to negotiate before the first order than after the first failure.

Die ownership and transfer
State who owns the die, in writing, and what happens to it if the relationship ends. If the customer pays for the die, the customer owns it and has the right to have it transferred to another press. Include the condition it must be returned in, the maintenance responsibility while it is in the supplier’s possession, and the process for transfer. This clause resolves the most common and most expensive dispute in the category.
Price adjustment mechanism
Link the price to a published aluminium index with a stated formula, a stated reference period and a stated frequency of review. A conversion fee that is fixed and a metal component that floats is the arrangement that survives a volatile market without a renegotiation.
Specification and change control
Name the alloy, temper, standard, tolerances and finish class, and require written notification before any change to a die, a bore, a slot geometry or a process route. A change-notification clause is what prevents a compatible part becoming an incompatible one without anyone deciding to make it so.
Quality terms and claim procedure
Define the acceptable defect rate, the measurement method, the notification period, the evidence required, and the remedy. Include the cost categories that a claim may cover, and say explicitly whether consequential costs are recoverable, because that is where the argument will otherwise happen.
Inspection rights
The right to inspect during production and before shipment, either directly or through a third party, with a defined notice period. A supplier who accepts this clause is signalling something about its process control.
Second-source and tooling access
If continuity matters, agree in advance that a qualified second source may be established and that tooling, drawings and process parameters are available for that purpose. This is a difficult clause to introduce later and an easy one to introduce at the outset.
Technical data ownership
Drawings, models and specifications you supply remain yours, are used only for your orders, and are returned or destroyed on termination. State that the supplier may not offer a product derived from your design to another customer.
Termination and transition
A notice period long enough to qualify a replacement, an obligation to complete open orders, and a defined handover of tooling and documentation. Termination clauses are written for the relationship you hope never to use.

The clause that pays for itself

One clause deserves emphasis beyond its position in the list. If your design depends on a customer-owned die, and the die ownership is not documented, then in practical terms you do not own the die. The supplier has possession, possibly the original drawings, and the working relationship with the press that runs it. Recovering a die from an unwilling supplier is slow, expensive and sometimes impossible, and it happens to buyers who assumed that paying the die invoice was sufficient. Get the ownership in the agreement, get a die identification number, and photograph the die the first time you visit.

Portfolio

The configuration that actually works

Procurement organisations that handle this category well do not choose between a factory and a trader. They run a small portfolio, with each position assigned a role. The configuration below is the one that most often survives contact with a real year.

Primary supplier: 70 to 80 percent of volume

An integrated or group manufacturer with the capability to cover your main products, a documented die arrangement and a quality system that covers the site. This is where you invest in relationship, in engineering exchange and in joint improvement, because the leverage is largest here and the switching cost is highest.

Qualified second source: 20 to 30 percent

A second manufacturer, deliberately kept qualified with a modest but continuous volume. The purpose is not price competition alone; it is that a second source which has not run your part for two years is not a second source, it is a new supplier you will have to qualify under pressure. Keep the volume flowing.

A trader for small, mixed or urgent orders

A trading partner is genuinely the better answer for a small order spanning several categories, for an urgent requirement that a plant cannot schedule, or for a component you do not want to open a die for. Paying the margin here is rational, provided you are paying it knowingly rather than being surprised by it.

A documented interface standard

Whatever the portfolio, the technical interface has to be frozen. One drawing, one set of tolerances, one finish class, applied to every supplier in the portfolio. A multi-supplier strategy without a frozen interface produces parts that fit individually and not together.

An annual review against the scorecard

Score every supplier on the same dimensions each year, with the same evidence rules, and review the direction of travel rather than the absolute number. A supplier slipping in two dimensions is a conversation; a supplier slipping in four is a sourcing project.

A costed continuity plan

Know in advance what happens if the primary supplier stops shipping: which products the second source can already make, what the lead time to ramp is, and what the inventory position would need to be. A plan written after the event is a negotiation conducted from a weak position.

The failure mode of over-diversification

There is a version of this that goes wrong and is worth naming. Some organisations respond to supplier risk by spreading volume thinly across many suppliers, on the reasoning that no single failure can hurt them. The result is usually the opposite: no supplier sees enough volume to invest in the relationship, every supplier is at the bottom of its priority list, quality varies because nobody is running the same process, and the administrative burden grows with every supplier added. Concentration and dispersion are both risks; the workable position is a small number of suppliers with clearly assigned roles and enough volume each to matter.

FAQ

Frequently asked questions

Should I buy aluminium profiles factory-direct or through a trading company?

It depends on which party controls the operations you actually need and what the total cost of ownership looks like, not on the unit price alone. A factory is usually cheaper per tonne but often carries a longer lead time, a higher minimum order quantity and less flexibility on mixed orders. A trader costs more per unit and absorbs coordination and risk. Price all six cost lines before deciding, because the unit price difference is frequently cancelled by inventory, quality and management costs.

How do I verify that a supplier is really a manufacturer?

Check the registered business scope for manufacturing activity, confirm the environmental permit covers the processes claimed at that site, ask for the press list with tonnage, ask for the anodising tank length if finishing is offered, request the die list with ownership status, cross-check claimed output against metered electricity consumption, ask for export records, and confirm that the quality certificate is issued to the site you are buying from. Every one of these is independently verifiable.

What is the most common dispute in aluminium profile sourcing?

Die ownership. Buyers frequently pay for a die without documenting who owns it or under what conditions it can be transferred, and discover the problem when they try to move the part to another press. Put the ownership, the transfer right and the maintenance responsibility in the agreement, keep a die identification number, and photograph the die on your first visit.

How should I compare a cheaper supplier with a more expensive one?

Build a total cost of ownership model covering unit price, tooling amortisation, freight and duty, inventory carrying cost, quality failure cost, management cost and switching cost. Inventory carrying cost is typically 15 to 25 percent of inventory value per year, and quality failure cost is defect rate multiplied by volume multiplied by the cost of one defect, including any line stoppage. These three lines most often reverse a decision based on unit price.

What defect rate should I accept from an aluminium profile supplier?

There is no universal figure; it depends on the cost of a defect in your application. What matters is that the rate is defined, that the measurement method is agreed, and that the cost consequence is priced. A defect rate that is acceptable on a component that costs forty dollars to rework may be unacceptable on a component whose failure stops a production line.

How long should a factory audit take?

Two days is enough for a mid-sized extrusion and finishing plant, and the structure matters more than the duration. One day for documents and extrusion, one day for finishing, machining and quality. The most informative single exercise is a traceability test: take a finished component from the warehouse and ask the supplier to produce its full production and inspection record.

Should I use a single supplier or multiple suppliers?

A small portfolio works better than either extreme. A primary supplier carrying most of the volume, a qualified second source kept active with a modest continuous volume, and a trading partner for small, mixed or urgent orders. Spreading volume thinly across many suppliers usually reduces service rather than risk, because no supplier sees enough volume to prioritise the relationship.

What should be in an aluminium profile supply agreement?

Die ownership and transfer rights, a price adjustment formula linked to a published aluminium index, a specification and change-notification clause, defined quality terms and a claim procedure, inspection rights including third-party inspection, technical data ownership, and a termination and transition clause covering tooling handover. The die clause prevents the most common and most expensive dispute.

Why should the price be linked to an aluminium index?

Because aluminium is the dominant input cost in the category. A supplier quoting a fixed price for a long period is either pricing in a substantial risk premium or will need to renegotiate when the market moves. A formula that fixes the conversion fee and floats the metal component against a published index is the arrangement that survives a volatile market without reopening the commercial terms.

Audit the product record, not the brochure

What a factory’s own data looks like when you open it

A supplier audit is easier when the supplier publishes the same numbers you would ask for on site: material, tolerance, inspection routine, packing and lead time. That is what the entries below contain.

Building a supplier shortlist for profiles?

We will answer the eight verification questions in writing — press list, tank length, die register, permits, certificate scope — before you travel. If you would rather audit us first, send the itinerary and we will book the two days.

Request the verification pack

Related reading

Twelve more engineering notes from this blog, picked for this article — plus every category below.