Outsourcing to China: Yet Another Horror Story

The problem here is quatily control...

Sure it's easy to blame China...but hang on, the guys who put the work out there are s'posed to be smart? Dealing with any supplier requires keeping an eye on quality...

Some guy back at the ranch has missed out on his QA trips to Cina with their lush golf courses and cute caddies...not to mention the massage afterwards.

Blame the sloppy guys who are happy to save a quick buck, dump their own work force...but not willing to do the ground work or QA.

Old saying up North

You don't get 'owt for n'owt.

We have a factory in China, never ending quality problems!

An Injection mold tool company we use has put work out there very successfully.

This has involved many trips, installing their own QA vetting procedures and empluying a UK educated Chinese guy on a retainer in a small office out there to monitor/progress the orders/work/vetting etc.

Yep, been there, done that, see above...

Anecdotally...

One of my buddies came back from a QA trip there and bought me back a Chinese Copy of a 'Ping' putter. (yes I know it's naughty...but it wasn't bought as a serious item)

The head fell off. The rubber grip stank the house out. the alighnment markings were out of true by a mile, the face wasn't flat.....

Now I've fitted a new grip, re-glued the head, trued the face (by hand with a file) and removed the alignment marks..... it's a great putter!

A product that needs outsourcing to ensure a market share is built on unstable soil. The opposition may just outsource as well and then the motivation falls flat.

In my opinion outsourcing to China must actually be seen as importing poverty.

Local people are deprived of an income. The additional cost and measures to ensure quality are too high.

Masu here is a link to a CR4 thread of a similar topic as yours, you may be interested in the comments there too. How to make Chinese auto parts products trusted

A lot of ideas look good at the start, and are then acted upon,
unfortunately by the few that immediately do not pay the price.

The coin has too sides though.
We imported a complete time piece (watch) from China for less
than half the price of a plastic backing piece, sourced in the uk.

The moral I think is we (uk) maintain our quality without pricing ourselves
out of the market. Tempting as it is to base a supply upon the...
"what the market will stand" an accountant/shareholder/business view.
Correct for making money - wrong for the community as a service.

In this time of automation, and shipping expense, there is no way
someone can produce the same item and ship it around the world for
less money; IF it is correctly priced at home, on a cost + margin basis.

Further, if the employees are not supported with work, at home,
who will buy our goods? Protectionism is not required; only fair
pricing. Unfortunately, individual greed is shown to be magnified
in corportate greed, causing the downfall of many, sooner or later.

Attempts to justify this are stated in many ways; but cheapness has
a cost; a price many have to pay in the end; all instigated from greed.

We all need to service the local community, not score off it. We are
here for a very short time; and what goes around, will come around.

jt.

http://www.fastfreeads.com

Good points jt.

For some reason though, as I read your post, I had the distinct feeling I was reading a poem...

JT, Wasn't it the British who founded the Chinese manufacturing industry? I think you should check your history. Surely, they didn't ship that garbage to the Isles, did they? Your statement about how your country carefully maintains it's home front manufacturing is fatally flawed. Your country is the source of the corporate business model destroying the US Labor Union and in favor of cheap international imports, via self protectionism, abroad. Unfortunately our government is easily "swayed" to the beat of the money, (who own and re-insure the ships which deliver both the junk and the replacement junk). Nice having it both ways. Protectionism is what we Americans would call flooding the USA with junk goods and then forcing the price of shipping to increase with oil. (Thanks BP for the rusty pipeline in Alaska. Great timing!) I can however agree with the statement "We shall all pay for our short sightedness, in the end." Eventually, obsolescence will become itself; as the quality exudes itself, accordingly.

Hi ietech & jt,

Thanks for the link and I agree whole heatedly with jt and I have pasted something along similar lines in the other thread.

I think Hendrik summed it up well when he said;

"In my opinion outsourcing to China must actually be seen as importing poverty."

I am glad that many folks are giving thought to this issue and I hope this type of message is received by the Chinese manufacturers and exporters. I especially wish that the major companies that have outsourced to China take heed and bring the jobs back home -- and just deal with the cost. I would rather pay more for quality products than deal with replacing inferior ones on a regular basis.

I have always believed you get what you pay for. Companies that are more concerned over profits than over their employees well being will ultimately put themselves out of business whether outsourcing to China or Mexico or Brazil or Africa. If the stockholders of these corporations support the actions of their corporate officers, they will ultimately suffer. It is poetic justice.

Walmart?

At probably the worst place I ever had the misfortune to work at I remember having a really heated argument over quality and the selection of a supplier.

Basically we were selecting a supplier for Ethernet equipment and all of the quotes came in at around the same price with the exception of one which came in considerably lower. The problem was the lower priced one was garbage and prone to failure and massive problems. No matter how much I pointed this out to the powers to be they ignored me and insisted that if they had problems with the equipment they could just insist that the supplier fix the problems under warranty.

Well, you can guess what happened in the real world when the crap that was supplied didn't' work, failed prematurely, had intermittent problems and so on and so on. We were hit with no end of the supplier passing the buck, claiming there was nothing wrong, blaming it on the way we installed the equipment, blaming the mains power supply, blaming the cabling, anything but the total garbage that they supplied us with.

As usual, the powers to be then jumped on the people that had warned them not to purchase the total garbage they did and rather than listening to their staff used exactly the same crap being spewed out by the supplier to criticize their work and blaming them for the problems.

Just as an aside this organization had a really dopey attitude towards training. Part of my job was to look after the hardware maintenance and installation of a series of some 13 super mini computers. Now the way the training worked is that after 2 years when I had demonstrated I cold do the work required of me they rewarded me by sending me on a training course so I cold do the work I was required of me.

Good one eh what?

Hopefully the corporation you spoke of is out of business.

• Hopefully the corporation you spoke of is out of business.

Actually I have omitted the name because it is still in existence and it would be particularly difficult for them to go out of business as it is a government funded institute of learning. Actually, that probably explains much of the petty minded anti productive back stabbing that goes on there.

Yup, that figures!...that's a sort of microcosm of why the theoretically sound concept of communism doesn't work.... I think we all recognise the situation you described (or something similar)...

The two magic words..

Government Funded.

You'll love the chain of command I was subjected to and keep in mind this is the department that supplies and administers all the administrative computing and communications for the entire organization, there were only 2 people, myself being one, that had any sort of relevant qualifications.

Me immediate superior was a telephone technician, then you had an electrician, a psychologist, a Dr of Astronomy and finally somebody that had just been there since day one that nobody really knew where he came from. All of the above believed I was directly responsible to them and so would all say don't do what anybody else tells you do what I tell you. Talk about getting pulled from pillar to post, no matter what I did I always ended up in bottomless procrastinating bovine excrement. Another lovely fact of life you needed to be on guard against was, if you did you job efficiently somebody would feel threatened and start slinging formal complaints for stupid things like talking too loud on the phone, or using phraseology that wasn't absolutely politically correct.

Working there was a huge mistake and you would be surprised how quickly and to the extent you health suffers from being exposed to an environment like that. Especially for somebody like me that had worked in time critical situations where you needed to make decisions on the fly, like flying to the other side of the continent, and telling the chain of command only when the situation was under control and there was time.

Of all the things I have done in my life and the mistakes I have made the only thing I would change if I had over, was accepting a position with this bunch of lunatics.

You feel strongly about this don't you Masu? Thanks for amusing (and informative) posts.

Codey

Hi Codemaster

• You feel strongly about this don't you Masu? Thanks for amusing (and informative) posts.

One could say that. Actually what I do feel strongly about is the attitude of many in management and directorial positions that believe the everything can be measured by how it effects profitability.

While profit is an important part of the equation there are other important things that need to be taken into account.

The well being of the employees of a company is an important factor that many high level managers don't give a dam about and if people do not feel secure or find the work place stressful and unknowable they will not perform to the best of their abilities. If they do not feel they are being treated fairly, lied to or deliberately misinformed, treated as a commodity rather then fellow human beings, etcetera it is going to have a serious effect on the amount and quality of the work they do.

When I started work as a cadet engineer everybody that had any sort of decision making power was an engineer that had come up through the ranks. Not long after the first so called graduate or professional manager that had not studied engineering but rather things like accounting appeared in the upper level of management. Unfortunately the didn't have the first clue about what was required of them or the people they were in charge of and ended up trying to measure everything form an accounting viewpoint. Over time more and more of these "graduate managers" appeared and today many companies have nothing but this type of person in the upper levels of management.

The results have been disastrous and have put engineering back decades with their attitude towards employees, customers and the work being done. I think you will find that I am not alone on this and many here at CR4 will agree that this is an extremely serious world wide problem that is not unique to engineering and is responsible for many of the problems we are currently facing.

Just ask yourself how many times you have heard really dumb statement come from management along the lines of:

• Don't give me problems give me answers.
• That's not the answer I wanted.
• You're not paid to think.

What about the major engine supplier and the Indian con rods. They lost track of which engines they were fitted to, no problem just look on the road that's where they ended up.

Should we be that surprised? They outlawed lead based paint here in 1978, Maybe lead poisoning is very common and acceptable in China. They cut corners just like we do just for the almighty dollar opps sorry yin. I just can't believe we buy food products there, even for our pets!

Jim C

Unfortunately, it is easier to lower our standard, here in the USA, than to raise it. The weak will be shook out.

Masu,

I had previously posted this story on another thread, but because it directly addresses your thread, I thought it would bear repeating. Please forgive me if it is too repetitious:

Yes, many American and other Western (and Japanese) companies are exploiting this greed by China's rulers, to the detriment of workers in their own countries. Yes, I have first hand experience with Chinese manufacturing. My former company decided to order decorative parts for our ready-to-assemble furniture from a Chinese factory, as a "cost savings", since it would have cost a few pennies more to have it produced domestically. We sent engineering drawings of the parts to China, expecting to receive sample parts back in time to approve them and begin manufacturing of the production quantity needed to meet our scheduled delivery of the assemblies to our customer, Wal-Mart.

What we received, late, and with a confirmation that production had already begun without our approval, was a bag of sample parts missing their mounting holes! When we inquired why that happened, we were told that the CHINESE factory manager had decided, on his own, that the holes were unnecessary, since he figured that we would be using "wood screws" which can make their own hole. What he did not know is that we did NOT use "wood screws" because they cause thin wood to split or go off course easily without a pre-drilled hole.

Now we had a problem, because we would have to use the parts which were already produced and "on the water", shipping to the US, without the mounting holes, to meet our schedule. Doing some quick scrambling, we found a good double-sided adhesive tape (more cost) which would be strong enough to mount the parts, as long as the consumer who purchased the furniture did this step last and did not attempt to move the piece after assembly!

I also had to rework our assembly manual, so that this step was last, and scrap the thousands of manuals which had already been printed! We have a saying, "Save a nickel ($.05), spend a dime ($.10)" which describes this type of situation!

And then, because of "high operating costs", corporate management decided our plant had to reduce its staff, eliminating many jobs (including my own), with the entire plant closing down just one year later. How did the company make up for the lost production capacity? By importing more complete models directly from China, made under contract by Chinese furniture makers, NOT company-owned plants.

Hi STL,

Your experience is important and I am glad you included it in this thread because it points to the moronic attitude of upper level management and how they have absolutely no regard for the people actually doing the work.

The seem to overlook the important fact that if everybody outsourced production to third world countries there would be no market left for the products they are producing.

Something else that really gets up my nose is how they justify the dismantling of a companies expertise and experience in the name of short term profits. Anybody can produce massive increases in short term profit by outsourcing labor, retrenching staff and selling off infrastructure, but it normally results in the destruction of the company due to the loss of reputation and falling standards. They then link this massive increase in profits to a bonus and shoot through before the damage they have done comes to fruition often causing the company to fold. In circumstances like this, I see no justification for the massive bonuses these directors and managers draw.

I have a very mild form of dyslexia and I soon learnt that it could be very useful in my job as a field engineer. For some time I specialized in fixing cock ups at the last minute after numerous other engineers had tried and failed. Because I brought a slightly different way of thinking to the problem I was not prone to making the same mistakes or overlooking that one critical piece of information everybody else had made or missed and so was able to see where the problem was relatively quickly. It's a bit more complex than just thinking differently as you need to know the engineering part first, but none the less it was a skill I had that was in demand.

The thing that really annoyed me was that often the problems I was called into fix, no matter what, when, where, were often caused by upper level management taking short cuts. When you are talking about having things like rolling mills, coal mines etcetera the cost of having them down often runs in the millions of dollars a day. By getting these plants back up and running in days rather than weeks the savings were often in the tens to hundreds of millions of dollars. Now, by the nature of the unanticipated expenditure associated with unplanned down time, the savings I was realizing often translated directly to the bottom line profit. As a result of the reduced down time the people that were often the cause of the problem received their profit linked bonuses. Of course none of them would ever admit they were the cause of the problem and never offered to share the bonus they received, because I managed to fix the mess they had gotten themselves into.

I am not the sort of person that is mercenary enough to stand there and hold them to ransom before I fixed the problem and I did not feel the work that I did was actually worth that sort of money. I never asked for it and I suspect that if I even joked about receiving my cut of the bonuses would get me into serious trouble. None the less, people were profiting greatly from the work I was doing and my point is, is anybody worth the sort of mind blowing bonuses that we see in the news, for what often turns out to be the routing of a company. Oh, I nearly forgot, these parasites often organize to get paid in some obscure way so they not only receive grotesque amounts of money but avoid paying tax on it as well.

Ok, my daily rant is over and everybody can come back out from behind the furniture now!

Hi folks,

I have just heard that hot on the trail of the problems Mattel had with the paint that contained lead they are recalling a further 18,000,000 toys worldwide because the magnets in them are not glued in properly and are prone to coming off and being swallowed by children.

Guess what, yes you guessed it, the toys were manufactured in China and the problem, like the lead containing paint, was caused by the Chinese manufacturer trying to cut costs.

Now I don't know how much Mattel saved by moving their production facilities to China but I would hazard to say that having to do two worldwide product recalls in the space of two weeks would have pretty much wiped out any savings and that's before taking into account the damage to the brand name.

"Now I don't know how much Mattel saved by moving their production facilities to China but I would hazard to say that having to do two worldwide product recalls in the space of two weeks would have pretty much wiped out any savings and that's before taking into account the damage to the brand name."

Alas and alack! Will they never learn? Or more importantly, will our corporate management gurus learn their lesson before they do permanent damage to their companies, to our manufacturing capabilities and capacity, and to our economy as a whole, before it is too late and we have no choice but to outsource because we have destroyed the insourcing option? What happens when you have replaced all of your manufacturing plants and nuts-and-bolts Tooling and Manufacturing Engineers with distribution centers and Six Sigma Black Belt "Industrial Engineers" and Logistics Managers? By then, all of our REAL manufacturing engineers will have retired or passed on , and the SME, IIE, ASQ, and the AMA (American Management Association) will have merged. Perhaps it will be known as the Society of Management Arts and Re-engineering Technologies / Association of Sourcing Specialists, or SMART/ASS for short!

Society of Management Arts and Re-engineering Technologies / Association of Sourcing Specialists, or SMART/ASS for short!

Now that's FUNNY, but sadly might happen.

Here is a link with some interesting information, including some of the voting history related to this topic for US representatives , http://home.ioa.com/~vampire/

The latest on the pathetic quality control coming out of China is clothing that is contaminated with formaldehyde which is being sold by several of the large department store chains in Australia and New Zealand.

Formaldehyde is a preserving and embalming agent that can cause serious allergic reactions like eczema and asthma and is also a carcinogenic agent. While there is no published safe limit for exposure to formaldehyde in Australia anything above 200 PPM (Parts Per Million) is likely to cause some form of reaction. The NIOSH pocket guide gives a Time Weighted Average exposure of 0.016 PPM for a 40 hour week and a carcinogenic exposure of 1 PPM for 15 minutes.

So, what sort of levels have been detected in the clothing? How does 1,000 PPM sound. Pretty frightening eh, well it gets even worse because the maximum level detected in clothing was 18 PPT (Parts Per Thousand) which is 1,125,000 time the TWA level in the NIOSH pocket guide and so high it has the potential to cause cancer with exposures as short as a few seconds.

But it gets much worse because levels between 200 PPM and even some above 1,000 PPM have been found in children's and baby clothing and have caused hospitalization with respiratory problems and severe rashes. It is also likely to have induced life long asthma in some of the children that have worn clothes contaminated with formaldehyde.

But it gets dramatically worse, because formaldehyde has been detected in several foodstuffs produced in China and marketed in Australia and New Zealand.

Now, I do realize that it is a good idea to wash clothing before it is worn for the first time, but levels like this are more than likely to still be at a dangerous level after washing and would more than likely contaminate anything washed with them. It could even contaminate the washing machine and thus contaminate several subsequent loads of washing with dangerously high levels.

Personally I am getting close to the level of the straw that broke the camels back with this sort of crap. The problem doesn't lie with the Chinese workers but rather the short sighted management that are looking to make massive increases in short term profits and thus earn huge bonuses. Anybody can do this by selling of your business, getting rid of your work force and employing third world labor, however, the profits can't be maintained and it is not long before the standards drop dramatically, the customers go elsewhere and the profits disappear. The problem is, by the time the damage show up the short sighted managers and directors that have shot through with their multi million dollar bonuses leaving the handful of dedicated employees to try and clean up the mess. A mess that is often to great to be fixed and is often fatal to the company in question. They then go on to do the same thing to some other unsuspecting company. The part that really hurts is they see what they did is not only justified but good and that the problems that surfaced shortly after they left were not caused by there actions while directing the company but rather as a response to them leaving.

From what I have seen it all stems from greed and impatience. It takes years to decades and dedicated employees to develop a reputation for quality and value. However, decades of work can be destroyed in a couple of years by the greed and impatience of a handful of directors and managers.

It's time we said enough is enough and ran these corporate raiders and rapists off to live in one of the third world countries they are so keen to shift all the production to. If we do nothing and just accept what a handful of self promoting short sighted individuals are doing then we have nobody to blame but ourselves.

I believe Hendrik summed it up quiet well with the statement,

"In my opinion outsourcing to China must actually be seen as importing poverty."

Hi Masu,

I believe the only way we can "fight" the corporate raiders and rapists is by boycotting their products (I mean, how, as a single employee/consumer, can you stop a big corporation from taking their production to the 3rd world countries?). Unfortunately, too many people are looking out for their wallets more than the quality of the products they buy. I know in my family, Walm*rt and the likes have been banned for some years after learning how they treat their employees and especially their suppliers. They (the big chains) will claimed themselves as being good for the community, selling local items and therefore creating/encouraging work in the region.

Only part of this is true, of course. They will approach local craftsmen and demand enough of the items that the worker will soon drop every other client he has to manage the quantities asked by the store(s). He (the craftsman) thinks he struck a gold mine. That's when they attack. Now that all his eggs are in one basket, they demand lower and lower price until the guy is barely making a living. He won't be able to re-gain his former clients because W*****t (and the likes) are now selling at such a low price that everybody will buy there thinking that they are helping their community by buying local when in fact, they're driving a local out of business.

Of course, all the other cr*p is coming from 3rd world countries with the problems you've already mentioned. I met a local craftsman that opened my eyes (story above) to their scheme a few years back and I have been very "active" in telling everybody that will listen how they can achieve such low prices. Some listen to me, some only to their wallets. Hopefully, people will wake up and realize that you can't get nothing for nothing, and do so before it's too late.

A couple of years back a friend of my wife and myself, who owned several hair dressing salons, ended up in a fight with a retail chain that owned the shopping center that one of the salons was in.

The retail chain decided that they were going to expand and as a result the salon would need to relocate to a larger premises in the shopping center. The cost of doing this came to over $70,000.⁰⁰ and the rent for the new premises was almost 300% that of the original premises.

Needless to say she was not keen on the idea of moving as the business did not need the larger premises and would struggle to pay the increased rent let alone the cost of outfitting the new store. She did however have a ten year lease that had two years to run and therefore if the owners of the shopping center were liable for the cost of the move and in theory could not increase the rent until the lease expired. However they held a gun to her head saying if you don't accept our terms and move to the new premises at your own expense and pay the increased rent we will not renew your lease when it expires in two years. Further more they also said that if she tried to move to another center they would insist that she pay the remaining two years of rent that was due on the original lease.

There was absolutely no option but to accept their terms and pay all the costs of the move as well as the tripling of the rent..

But it doesn't end there and guess what happened. After two years when the original lease expired the owners of the shopping center stalled the negotiations for a new lease and as soon as the lease expired they moved in, changed the locks and kicked her and all the staff out of the salon. They then rented it out to a rival business for another +200% hike in the rent using all the equipment she had paid for in the relocation.

Now all this is highly unethical and technically illegal but if you try and fight it the shopping center owners just drag proceedings out until you end up going bankrupt and can't continue with the action against them.

Unfortunately this is not the only time I have heard of this happening and a similar thing was done to another acquaintance that owned a Petrol and Service station by the oil company he was a dealer for. There is bugger all the small business owners can do to fight this and if you ever see it happening the best thing you can do as a consumer is take your business elsewhere and support the local businesses if they manage to set up in a different location after being screwed by such unscrupulous corporate behavior.

Money rules. Unfortunately, I ain't got that much. We do, whenever possible, go for the local businesses even if it costs a little more (most times only a 5% higher but MUCH BETTER quality) and we also encourage all that will listen to do the same. But in the hectic world that we live today, most people don't even know their own neighbors !! Living in their own "bubbles" and going for the most (but definitely not the best) material they can impress the community with....there's a real need to go back to a more basic lifestyle, and quickly. I just hope the world (so-called civilized) will wake up in time.

Thanks for posting this thread. If enough people talk about it (here and to whoever they -we- know), there might be a chance for a small change...

I think we are all missing one very important point here. The basic priniciples of a capitalistic society are of supply and demand. If there was not a demand for cheaper, inexpensive products then these companies would not be producing them. We as North Americans are certainly demanding cheaper products!!!!

As JohnJohn said "Walmart" is a classic example and now that they have been in the marketplace for over 20 years, the lack of quality is something that we all now come to expect AND PUT UP WITH.

If North Americans are serious about bring jobs and prosperity back to North America, then North Americans should start supporting North American businesses and DEMAND the quality that we should be getting.

Question is: Are we willing to pay for that quality??????

Discuss.

Last night on the radio, Mark Levin was discussing this very same topic. Regarding all the recent stories about lead-tainted toys, clothing containing other hazardous chemicals, and now, the latest health hazard from China, re-packaged, unsterilized, unwashed, used chopsticks! Although these tainted chopsticks may not have been exported, it still speaks to the poor quality, and even outright danger, of Chinese produced goods.

Mr. Levin calls this importing poverty, because the mark of a poor nation is the substandard products that are available for sale. The more we import inferior goods, and export our wealth, the poorer we are as a nation. And you would have thought we had learned our lesson previously when Japan did the same thing to us in the years following World War II.

Remember the 1950's, when US industry had survived WWII relatively intact, and in some sectors even invigorated by war work after surviving the Great Depression, while European and Japanese industry lay in shambles? As they recovered, the Japanese started sending inferior goods to the US, which were purchased solely on low price. "Made in Japan" meant poor quality and inferior products. People complained about the poor Japanese quality, but purchased anyway. US homes, and eventually garages, attics, basements, eventually landfills become full of cheap, shoddy, Japanese imports, which were forever failing or falling apart, and could not even be repaired effectively, unlike their domestic competition. The US become a "throw away" society, and we began suffering cyclical recession and inflation, even a new condition where both happened, which was labelled "stagflation" (inflation with stagnation in the economy).

Eventually, as their economy recovered and Japanese companies prospered, their equality improved as well, and the standard of living of the average Japanese rose, until they were once again considered a wealthy nation, and rising labor costs lead Japanese manufacturers to begin looking to outsource their own production, to Korea, Taiwan, SE Asia, and eventually China as well. Now "Made in Japan" is a hallmark of a quality product. "Made in USA" may sometimes be of questionable quality, but at least we are not exporting our wealth when we buy US-made products. Unfortunately you can no longer even buy, for example, a consumer-grade television "Made in USA".

Capitalism encourages international trade because it can increase wealth for a country to import. But this is only if the exporting nation is able to make a product at a lower cost that is equal or better in quality and sells at a lower price, and therefore has more value to the importing country than its own domestic products, forcing domestic producers to try to match the quality of the imports. Economists call this the Principle of Comparative Advantage. This certainly happened with Japanese automobiles and the result has been more Americans affording to drive quality automobiles than ever before. Even our domestic manufacturers have been forced to improve their quality.

But in the current state of affairs with China, this is not working. Instead of a race to improve quality, it seems that we are diving into an evermore shallow quality pool, and now we start smacking our heads on the bottom! Will we learn in time? Will we stop diving into a pool of cheap imported products before we break our heads open, only too late, to find that we no longer have the means to mass produce some of those products ourselves?

I think it was Mark Twain (but possibly not as much is attributed to him that he never spoke) who said that Americans don't always get the Government they want, but they always get the Government they deserve. Today he might rephrase that and substitute Goods instead of Government!

Outsourcing is an integral part of the manufacturing process even it the outsourcing is for raw materials only.

The problem is when the company outsourcing tries to delegate responsibility as well as supply.

Outsourcing from one North American company to another can be as disastrous as "third world" outsourcing.

One particular transaction that I've had to deal with was an outsource arrangement between GE and British Aerospace / Lockheed Martin of Johnson New York. The resulting product was fit to be considered Chinese in all aspects from design through manufacture to implementation and back up service.

On the other hand the Japanese Steel mills "outsource" the supply of Iron Ore and Coal to companies such as BHP, Rio Tinto and CRVD (Brazil). If one of these companies supplies product outside the strict contract conditions it costs them dearly. Iron Ore for instance is priced on Fe points with deductions for impurities above agreed limits and I've seen where the JSM have refused shipments or parts of shipments leaving the cost of unloading and "disposal" with the supplier.

Outsourcing successfully requires clear quality specifications and a contract to suit.

If Chinese stuff is bad, just wait for the Indian influx.

Hi Emjay4119,

You are absolutely correct and outsourcing has always been a critical factor since time immemorial. As technologies have become steadily more complex being able to manufacture items has become more specialized and we can never have the capacity to manufacture everything in house. As a result outsourcing is has become steadily more essential.

The problem doesn't lie with the outsourcing itself but rather the way it is carried out, monitored and administered. Much of the outsourcing it China is done to improve short term profitability rather than requiring skill that are not available in house. This is often done by directorial and managerial staff that are only concerned with reducing costs, maximizing short term increases in profitability and collecting their obscenely large bonuses.

If we as consumers, do not reject the drop in quality and selfish attitudes of the people that see such practices as acceptably and part of operating a business in the 21^st century, then we have nobody to blame but ourselves. If, on the other hand, we reject the drop in quality and reliability and express our disgust at the actions of the people making the decisions then there is a good chance we can force them to either change their attitude, way of thinking and low value they place on their employees or alternating have them removed from their position of power.

The Offshore Group (www.offshoregroup.com) provides a solution that allows companies to reap the benefits of manufacturing in a low-cost, low-risk environment, while retaining 100% control of their core functions. The company has enabled firms to startup and maintain production facilities in Mexico since 1986.

2007-08-30

Make no mistake. This is a passing phase. Remember just after WW2 when Japanese goods were thought of as cheap imitations of western products? By 1980 the Japs taught USA how to build cars; America invented the VCR but it was the Japs who mwde it into a commercial product; so with color TV, many others. They represent the world's best standards of quality and price.

So it will be with the Chinese. They are on the learning curve, and they learn fast. While it may be necessary to go slow on outsourcing to China temporarily, dont write them off.

They will return. Sooner than later.

Right on.

And remember they are producing a host of "good enough" products eg. power tools. It is now cheaper and easier to buy a tool to do the job than hire something. We of course have the advantage of 240 v power, so I don't know if it is as true Stateside.

It's not just the poor quality control coming out of China, a good portion of the problems are caused by modifications being made to the items being produced by people that have no idea what they are doing.

A classic example was a recent piece of scientific equipment I purchased. The first unit was not repairable and needed to be replace with a second new unit. The fault could never bee isolated and no matter what sub-assembly was replaced the problem persisted. While the fault could never be isolated there is a good chance that all the replacement spares also had the same fault, so, no amount of replacing sub-assemblies would ever repair the problem.

Unfortunately the replacement unit also had a fault, but at least it was a different fault and could be isolated. When the replacement unit was opened up the problem was found to be damage to part of the internal cable loom.

It turned out that somebody in China had decided to change the design and routing of the internal cabling loom and as a result, after a short period of operation, the device failed due to damage to the cable loom. The problem was then compounded as all the spare parts had been manufactured with the same alterations, so installing a replacement cable loom would only temporarily fix the problem and a repeat of the failure was inevitable. The only solution was to locally hand make a replacement cable loom to the original specifications.

To compound the problem the manufacturer in China had not kept proper records of the date the modification was made and which units had the faulty cable loom so there was no way to figure out which units would need repair or how many faulty units were out there. This meant that all the units that were in store needed to be inspected and repaired where necessary. It also meant there was no way of determining which units that had already been sold contained leaving the dealer with either a total recall of all sold units or accepting the loss of reputation with the failure of units already sold and in use.

If you have ISO-9000 or equivalent certification a problem like this, due to unapproved alterations by a Chinese manufacturer that did not keep sufficient records, would instant loss of your certification. That could be catastrophic for may companies as it would mean the instant cancellation of any government, military, aerospace, etcetera contracts, where ISO-9000 certification is mandatory.

"We of course have the advantage of 240 v power, so I don't know if it is as true Stateside."

Don't kid yourself. 240V and 120V are just different taps on the transformer coil if the equipment runs on DC or just an alternate motor option if it runs an AC motor direct.

I am not a motor expert, but there may even be switchable 120/240 volt motors now. Most manufactures now make their product designs to run on any common AC world power, 120V or 240V, 50 Hz or 60Hz.

Use of 240V will not protect you from the onslaught of shoddy Chinese made products.

The problem is that not ALL Chinese products are shoddy. It is very much "hit or miss" and, unlike familiar Brand Names, which we sometimes use as a guide to picking a "quality" product, the Chinese have yet to establish any such brand names that I know of, preferring to sell goods unbranded (hence a proliferation of identical products using various brand names given by various importers), or as a supplier to a Western manufacturer, presumably manufacturing to their specifications, but now we know that we cannot count on that as a guarantee of quality. Mattel is the perfect example!

Does anyone know of any Chinese brands which have become known for good quality?

PJM,

See my post #34 where I covered this same idea.

But history may not repeat itself. One reason is that Japan is a now a healthy, Western-style democracy, with well-defined personal values of honor and integrity, as well as, and this is crucial, personal accountability. In the modern Japanese way, mistakes may be made, but also forgiven, especially if a lesson is learned.

I do not see that developing in China. Although giving lip service to "free enterprise", these new Chinese "entrepreneurs" are actually tightly controlled by the state, which has its own agenda, which does not include failure and where accountability, when finally exercised by the state, can be fatal.

Unfortunately, while using tight control on the top side, Chinese "Capitalism" does not include much experience or control beneath the upper echelon, and so we see a lot of "high flyers" crash and burn. Are they really drawing any lessons from this, other than "don't get caught" and "find someone else to blame"?

China is at a cross-roads today in more ways than one. Just as it can decide to go it alone, remaining a bastion of Marxism-Leninism and totalitarian rule, or join the growing community of industrialized nations which have implemented various versions of democracy or begun true democratic reforms. Likewise, it can join the worldwide community of nations seeking to standardize quality, and implement it even at the lowest levels, as the Japanese did (with guidance by Americans like W. Edwards Deming), or they can continue on the path they seem to be on, which may never rise above Third World status in terms of poor manufacturing quality.