China is the world’s factory, with tens of millions of people employed in making almost every conceivable product and tens of thousands of manufacturers in the Pearl River Delta region alone.
That’s true but there’s another revolution waiting to happen in China, and it has nothing to do with politics. Much of the Chinese dragon’s success can be drawn as a parallel to the rise of Japan’s manufacturing heyday.
In the 1970’s Japan was the producer that the West turned to for cheap production, and over the next 30 years the Japanese economy achieved a remarkable transition. From delivering cheap, throwaway goods which the discerning consumer would ignore in favour of better made domestic goods to leading the world as a producer of high quality, high tech products from cars to stereos to computing everywhere you look Japanese goods are associated with quality.
China has already achieved the status that Japan achieved 30 years ago, for low cost low importance goods wherever you go in the West you can find Chinese made toys, clothes, electronics, and more. But Western consumers still treat these products with a certain amount of disdain because they are considered to be “cheap and cheerful”.
Quality has not been a key part of this latest industrial revolution, local consumers are price fixated there is no demand for longevity in consumption only “new”. There’s no expectation that clothes should last for a long time, or that a television could be good for 20 years, and so on. Which means that business in the country has been conducted in a very similar vein to the local taste.
Western companies can be blamed for this too, in the rush to secure massively increased margins many contracts have been signed only on a “price per article” basis. A good prototype is produced, and the assumption is that all future items will be of the same grade.
This needs to change. If you consider the Japanese rise to global dominance the key factor in their success was the implementation of strict quality controls and brand new theories of management, both Kaizen and Total Quality Management owe their existence to the endless drive to increase the saleability and worth of Japanese products.
It’s very likely that over the next few years Chinese manufacturing will have its own quality revolution, the country is already losing the lowest end of production to other more cost effective markets. It’s been a good thing for the local people that the economic success of the country has driven up local wages, but also means increasing competition from less developed countries like Bangladesh.
Until that revolution takes place though, if you’re going to work with a company in China to outsource your production you’ll need to take care of your own quality control, either by employing your own QC workforce in China or working with a company specialising in monitoring production.
Otherwise you’ll end up being one of the many companies who’ve been on the embarrassing end of product recalls (this includes many multi-nationals who are not exempt from making mistakes; Hasbro for example have had to recall lead contaminated children’s toys in both Europe and the United States).
When setting up your outsourcing relationship it’s worth examining in detail what kind of quality control (if any) your supplier has in place. It’s common for factories to declare in depth QC processes and dedicated staff when closer examination reveals that there are no documented processes, no such staff and worse no records kept of any procedures that are actually conducted.
If this is the case it doesn’t mean you should refuse to work with that business, but it does mean you will need to spend some time educating them on the value of higher quality production and working with them to achieve that, and auditing their compliance over a period of time.
It’s vital to ensure that your outsourcing relationship is based on an understanding of mutual benefit, working together in harmony or through an intermediary well versed in local culture and language to achieve better production is a great way of demonstrating this commitment. Your supplier will find themselves better able to win and retain business, and your customers will continue to receive the grade of products they have come to expect from you.
There will be a revolution in quality in China, the government is now trying to encourage a more internally focused economy and while the prevailing focus of the Chinese consumer may still be cost focused (thanks to appreciably lower earnings than their Western counterparts), there are growing signs that when Chinese consumers purchase goods they are choosing foreign made over domestically produced goods in no small part because they consider them to be better made.
However until that time, it makes sense for any company outsourcing their manufacturing to the country to take control of the quality process and lead their efforts.