Quality takes over from cheapness in China
UK companies had their products made in China because it was cheaper, but now most companies have a much higher priority - quality - as Christopher Devereux explains
Low labour costs, and the Chinese ability to learn quickly and copy Western products, brought buyers from all over the West and other parts of the world. Products made in China started to fill every market in North America, Europe, Australia, Africa and almost every continent. But as imports from China mushroomed so did horror stories of poor quality products being consigned to the scrap heap shortly after arrival.
Times have changed.
Today, every buyer outsourcing products or manufacturing in China expects to buy at probably the most competitive prices on earth; that is their starting point. In the 21st century, quality has become outsourcers' number one goal. A container load of faulty or out-of-spec products costs a company many times more than the savings from low Chinese prices.
This may seem obvious but stories of bad quality goods arriving at their destination with little resemblance to the samples approved by the buyer, or satisfactory first three shipments arriving followed by the next two shipments completely out of specification, still abound at a regular frequency.
So how do buyers ensure that they receive consistently good quality products at competitive prices?
The fact is that there are thousands of companies capable of producing high quality, competitively priced products in China and, in particular, in the PRD.
The main problems facing buyers are how to find the right suppliers, how to control them, and how to ensure the right quality products are delivered.
Following the rules - experience has shown that these requirements are not readily solved unless basic rules are followed.
However, many buyers simply do not adhere to some simple but reasonably obvious rules.
Outsourcing buyers new to China will probably find suppliers through any of the channels shown below.
Each approach has its advantages but many have disadvantages too.
With buyers now requiring Western quality specifications, the emphasis on outsourcing in the 21st century has been to find quality suppliers rather than just the cheapest.
Buyers are finding that they can no longer compete by manufacturing in Europe or the US but are concerned about being able to outsource to the same quality standard as their home production.
At the same time, Western manufacturing companies who outsource several specialist manufacturing processes are faced with a nightmare of trying to co-ordinate multiple outsourcing facilities and processes in China without establishing a fully staffed operation in the country.
Another problem is the reluctance of manufacturers' own quality engineering staff to make frequent visits to China.After two or three trips, Western engineering staff are notorious for finding excuses to avoid further visits.After all, who can blame them?Factory life in China is very different from that in their 'home' country.
So how do Western outsourcing buyers achieve the quality they require without setting up a fully staffed office in China? Here are a few tips, as follows.
- Make sure you have detailed drawings and meticulous specifications of the products you want manufactured.
- Don't try to buy products or outsource manufacturing unless you work through an impartial outsourcing company or you plan to visit your outsource supplier on regular monthly schedules.
- Explain at the outset your quality goals and provide acceptable quality levels for every component.
- Don't leave any detail to the discretion of your supplier.
- Specify everything.
- Have a clear quality plan including independent quality control inspections during production and prior to shipping.
- Don't assume anything except that whatever you assume will end up as a disaster.
- Build up a good working relationship with your supplier or outsourcing company.
- Don't rely on being friends with your suppliers.
- While Guanxi is very important in China, nothing beats a professional and detailed manner.
- Accept that if it can go wrong it will go wrong.
- Don't cut corners.
Don't allow your suppliers to cut corners either.
- Accept that your suppliers may work differently to the way you work in the West.
- Don't force your supplier into your method of manufacture until you are convinced that his way will not produce the product and quality you have specified.
A quality oriented outsourcing company will have these principles embedded into their ethos.Their experience will save a lot of problems, time and money.
To conclude, there is no doubt that Chinese suppliers are getting more quality conscious month by month, year by year, so there are more ISO 9001 qualified suppliers than ever before.There are many more foreign manufacturing companies than five years ago and these are influencing the national companies into higher quality levels.These companies are realizing that quality frequently commands premium prices.Certainly quality overall is improving.
Eventually, China will follow the Japanese quality blueprint, although - admittedly - it will be some time before we reach this level.