Manufacturing Quality debate in China

The rash of recent recalls, articles and mortalities stemming from China’s quality woes deserves a day in the spotlight. Having pumped out over $7M in products over the past couple years, this battle is close to home. I personally introduced 5 new products made at 5 new manufactures to the market in one year. These products where not sourced commodities that I slapped a logo on but custom engineered innovations that required everything from the ground up. From tooling to final inspection, it all had to be created, confirmed, and controlled to deliver a consistent, safe, affordable and desirable product to the customer.

The thing that troubles me about the articles I am reading is the statement of the absolute obvious. Let me give you an example. You should test the products you are having made. No kidding, well thanks for the pearl of wisdom. Anyone that read that article and had an ah-ha moment either works at Mattel or has never produced a product in their life. The world or at least my trusting friends in the US are shocked that the Chinese suppliers would actual cheat the customer and provide inferior products. We are so far removed from reality in our safe little bubble, protected by two oceans that we forget what business is like. These kinds of things have been litigated from our memory in the states. We have moved on long ago to damages caused by hot coffee. We are a nation that is detached from reality.

The practical implications of this are simple. We try to manage a situation in a factory in Changshu from an office in Shanghai or worse Los Angeles. Why? It is comfortable and easy to stay in our office and let the supplier or the trading company handle it. After all, they have your company’s best interests in mind. Well, maybe they do but I say, “Trust but verify”. The only way to do that is to be on the shop floor in Changshu armed with enough knowledge to know if you are getting what you have ordered.

There has been a ping pong match of articles in the media. If you watch US news outlets, then read the Chinese outlets, there is an interesting point, counter point debate going back and forth.

Some articles of interest

http://www.forbes.com/2007/07/26/china-manufacturing-quality-ent-manage-cx_kw_0726whartonchina.html
http://www.businessweek.com/smallbiz/content/aug2007/sb2007089_716295.htm?link_position=link1
http://english.people.com.cn/90001/90776/6246923.html
http://english.people.com.cn/90001/90780/91344/6250684.html
http://english.people.com.cn/90001/90778/6251031.html

For me, I like to stay out of the political wrangling for the most part, save this one statement. I believe completely that protectionism is foolish and ineffective.

Regardless of the politics there are real battles being fought to ensure quality products are being produce but that war has been going one for longer then the recent media blitz. It is really a simple matter in my opinion. Understand the environment you are doing business in and act accordingly. It is incumbent upon US companies to understand were they are manufacturing and to plan according. Stop crying foul after you take advantage of a low cost labor provided but don’t think that you need to be responsible at the onset to put systems in place to monitor quality. That strategy seems adolescent to the point of ridiculousness.

Wake up. Smell the lead in the paint and put systems in place to keep that crap out of your supply chain.

What complex system did I put in place to foil the crafty suppliers from duping me with inferior products?

  • Understand the product and the process better then the supplier. Write the assembly instructions, know the machines involved and even what settings they should be running at. Require written approval for any deviation and spot check.
  • Make QC/Inspection plan. Incoming materials, in process and final inspection points with detailed measurable parameters.
  • Test the pre-production product as a baseline. Follow that up with random in process testing and testing after the product has been boxed up.
  • Hire a QC technician to go where you want, when you want everyday. It cost about $300 a month for one. Probably to much for large corporations like that ones getting pepper in the media right now.

I got a little crazy at the start and had the supplier do 100% final inspection, and then I had my own quality guy do 100% inspection. This seems extreme the surface but it puts the supplier on notice and lets them know how serious you take quality.

There are other things that can be done as well. The most obvious is picking the right supplier. That is probably an entire series of articles that is best left for another time. Another great strategy is randomly showing up at the factory. The look on their face usually tells me how the rest of the visit will go and I will all but guaranty they will not want to get caught twice with the hand in the cookie jar. What not to do is hire a trading company or broker and think they will do the job for you while you’re in Hong Kong or even the US. Showing up is half the battle. The rest is common sense.

The final thought I will leave you with is don’t be too eager to assume that a third party inspection company can solve your problems completely either. On top of what I read in a recent article about submitting multiple samples and only showing the customer the one in ten passing report, I have seen first hand inspections being more a transfer of cash than anything else. More on that another day.

Son of Suzhou