Industrial Machinery · Germany / EU · 6 min read
Hidden Subcontracting: 40% of Production Was Leaving the Factory at Night
A German auto-parts brand thought their tier-1 supplier was producing in-house. Our audit found that nearly half of every batch was being trucked to an unvetted workshop after hours.
The problem
What the importer was facing.
A German Tier-1 automotive components brand had been buying injection-molded housings from a Dongguan supplier for 14 months. Quality was drifting — sporadic warpage, inconsistent surface finish, and a CAPA response that never quite landed.
The investigation
How we verified what was actually happening.
We ran a 3-day on-site audit including a power-consumption reconciliation. Claimed output was 38,000 units/week. Actual measured machine uptime and kWh draw could only support roughly 22,000 units/week. The math did not work. We placed an unannounced second visit at 21:00 on day two and observed three trucks loading semi-finished housings bound for an address 14 km away.
The findings
What the on-the-ground evidence showed.
The unvetted sub-tier workshop had no fire-safety permit, used a different polymer grade, and employed workers off the books. Worker interviews on site confirmed the practice had been running for 9 months. The Tier-1 was passing 100% of QC because they only inspected their own production — the subcontracted batches were shipped untested.
The outcome
What we recovered, prevented, or proved.
Client switched 70% of volume to one of our pre-audited alternates within 8 weeks. Remaining 30% kept at the original supplier under a no-subcontracting clause backed by quarterly forensic re-audits. Defect rate dropped from 4.1% to 0.6% within one quarter.
