TXM Managing Director, Tim Mclean, talks about the simple rules to achieving quality in China in our latest article for Australia-China Connections Magazine.
Question: What does an Apple iPhone, a Mercedes E200, a Coach handbag and an Airbus A320 have in common?
Answer: They are all made in China
I find it common for people to tell me that “Chinese quality” is bad. If I were to ask the same people about their perception of the products listed in my question above, they would tell me that they are all high quality products. Yet they are all made in “poor quality” China. So what is going on here?
The reality is that quality has nothing to do with country of origin or the ethnicity of the production workers. The quality of products is solely a function of the quality of management at the manufacturer and how well the manufacturer understands their customer’s needs.
You Get What You Pay for
Imagine in your own country that you had to source a product. So you found a supplier who operated an old factory in a remote village with a dirt floor, 50 year old machines and a workforce of illiterate peasant farmers. Would you expect to receive quality products? Of course not. However many buyers seem to think that they can select the cheapest possible supplier and also expect western standards of quality (and corporate governance). This does not happen in Australia, nor will it happen in China (or India, or Thailand). You get what you pay for, so if your only selection criteria is price, then you are likely to end up with a supplier who is unable (and probably unwilling) to meet your quality requirements. Sometimes the cheapest supplier may also be a well run operation with good business systems and capable of delivering what you want. However if you fail to properly consider these other factors in your supplier selection and just choose on price, then you are looking for trouble. You need to properly assess your potential suppliers and, ideally, visit their factory and review their systems to make sure they can deliver what you want to the quality you want.
You Get What you Ask For
Even if you choose the right supplier you can still get the wrong result. If you have been producing your product internally or using a local supplier, there will be years of experience within those businesses in making your products. Much of this experience may not be documented, including corporate memory of past quality problems and key tips and tricks on how to get the product right. So you send a drawing and a purchase order off to China and what comes back is useless, because your drawing lacked all those undocumented requirements. If you want good quality you have to invest a lot of time in communicating to your Chinese supplier exactly what you want, why you want it and how to achieve this quality. This usually means locating key technical staff from your business in the Chinese suppliers’ factory during the startup phase until quality is assured. Remember also that you are working with a supplier in a different country, with a different language and culture so this knowledge transfer is likely to be more difficult, more detailed and longer than it would be with a supplier who was located on your street.
Building In Quality Rather than Inspecting It Out
There is no doubt that it is getting much easier to get good quality products from China than it was five years ago (particularly if you follow the two rules above). However much of this improvement has been achieved at a cost. In almost every factory you visit you will see a small army of people inspecting products. In Lean Manufacturing terms we call this inspection “non-value added time” because if the product was always made right first time the inspection would be unnecessary. It also means that the business will end up having to scrap or rework a significant amount of product, because the inspectors will find defects. Finally, because humans are fallible, inspection will reduce defects, but it will never eliminate them and some defective products will still make it through to the end customer.
Around 30 years ago, lead by the Japanese, manufacturers in developed economies discovered that it was much better to try and locate and prevent defects on the production line rather than trying to inspect defects out of the completed products. The next big quality improvement wave in China is therefore working to assure “quality at the source”, so that each worker is accountable for his or her own quality. Quality problems are then identified and and prevented at each workstation on the production line, rather than after hundreds of faulty products have been made. This is one of the pillars of “Lean Manufacturing”, a set of Japanese-developed management techniques that TXM is helping manufacturers across China to implement. Once quality is assured this way then 100% inspection can be slowly eliminated, reducing cost, reducing waste and finally assuring a quality product to the end customer every time.
To summarise, there is nothing inherently bad about the quality of Chinese products. Many premium “high quality” products are already made in China. Buyers need to be careful to select suppliers based on their ability to deliver a quality product, not just on price. Time and effort then needs to be put in to ensure that the Chinese supplier understands exactly what the buyer wants and how to make it. Finally, Lean Manufacturing specialists such as TXM are helping Chinese Manufacturers move their quality mindset in the 21st Century by assuring quality and preventing defects at every step of the production process rather than relying on a costly and unreliable army of inspectors at the end of the process.