10 Tips on avoiding “Quality Fade”
The China manufacturing machine is a force that can not be ignored. They have it as far as rapid and low cost tooling, volume production and quality output. But like any tool, used incorrectly the results can be disastrous.
For product developers and importers alike using a good Chinese manufacturer can give you great results at great prices, but be warned “Quality Fade” is built into the Chinese manufacturing ethos.
Chinese manufacturers will continually find new ways to lower their costs, they do not appear to do so with malicious intent – rather than, “that is the way it is”. My advice is that you should just treat this as a sport, albeit a extreme sport, you need to master the game to avoid major consequences of losing eg – excessive warranty claims and recalls etc wasting your time, money and eroding your company and product brand value.
10 Tips on Chinese Manufacturing:
- Get your own Chinese speaking staff: Everything is lost in translation, particularly in times of crisis. You need both Chinese speaking staff on the ground in china and in your local office. Its amazing what ground you can cover quickly when you hear “the real conversation”.
- Have your own people in China: One thing never changes – personal relationships are king. Video conferences, skype calls and email will not replace being there. By all means start with regular visits, but as soon as you can, get your own person resident in market or close by eg Hong Kong.
- Proactively monitor for systemic product failure. With out fail every product issue will be meet by your supplier with a comment “you are the only customer with that fault’. If you are getting quality failures, then act. Anything over 1% of product failure from customer returns needs to be treated as urgent, and greater than 3% is a crisis and definitely systemic product fauilure.
- QC every shipment: No matter what track record the factory has, QC both in market and at receipt in your market.
- Contract with factories not brokers: In market brokers are great at helping you source product, manage relationships and get things done. However, when the shit hits the fan, they typically do not have the reserves to bank roll failure. Yes, include them in the commercial deal, but also have a contract with the factory direct.
- Don’t stray from manufacturers specialty: When asked most manufacturers say “yes” we can build that. In reality, most if not all, Chinese manufacturers all specialise in one thing and they seem to congregate in a region. Eg all vacuum cleaner manufactures appear to be within a 100km radius, like wise all blender manufacturers.
Once you go high volume with any product line the impact of failure increases. At that stage you should step up your QA processes:
- Make Notification of ECN’s and factory change mandatory: Make sure you are getting copies of all ECN’s (engineering changes notices) for your supplier. Particularly look for changes in quality of components that may effect EMC compliance or reliability of the product.
- Do regular full break down tests: Continually randomly check all aspects of your product build.Check that the manufacturer has not swapped our a key ingredient or component, particularly ones that you mention in your marketing or affect safety and compliance
- Get Compliance Approvals retested in AUS/NZ : By all means use Chinese test lab reports to get you going in market with compliance certification, but if you want to eliminate risk of running foul of in market regulators, retest with Australian or NZ test labs
- Do full technical due diligence on all high volume product – be aware in many cases Chinese manufacturers cut corners in product development avoiding some important steps of new product introduction including HALT (Highly accelerated life time testing) and tight supply chain management of critical high risk components eg lithium Ion battery assemblies.
Whether you are a product development company using China for contract manufacturing or just an importer distributing goods made in China, do not skimp on investing in appropriate Product Quality systems to protect yourself and mitigate against product failure risk.
A must read for any one contemplating or using China as a tool is “Poorly Made in China” by Paul Midler – the horror stories in this book are all true.
This is the part of a new series of blog posts on “Product Recalls” and “Managing Chinese Suppliers” and other key topics aimed at medium to larger organisations. The content of this new series is based on experiences learned managing: multiple major home appliance recalls inside 12 months, involving hundreds of thousands of consumer products manufactured in China and sold in Australia and NZ.
PS: Mark is currently (Dec 2015) looking for his next full time role or a consulting assignment in NZ or Australia. You can contact him at: Mark@growthmanagement.co.nz