The Manufacturers’ Quality Standards in Different Asian Countries

Chris Devonshire Ellis and his associates at Asia Briefing just published the Asia Sourcing Guide 2015, as described below:

In this issue of Asia Briefing, we explain how and why the Asian sourcing market is changing, compare wage overheads, and look at where certain types of products are being manufactured and exported. We discuss the impact of ASEAN’s Free Trade Agreements with China and India, and highlight the options available for establishing a sourcing model in three locations: Vietnam, China, and India. Finally, our Expert Commentary examines the differences in quality control in each of these markets.

It is a free download. As always it is well written and displays key numbers and comparisons in an easy-to-grasp manner.

Chris was nice enough to invite me to contribute an article that compares manufacturing & quality standards in China, ASEAN, and India. It can be downloaded here. I think it’s a good read!

What to Do after Defective Products are Delivered from China?

What to do if you didn’t inspect production and you receive a shipment of unsellable products?

First, check if 100% of the goods are unsellable. If not, it might be worth the cost to sort the bad pieces out.

Second, check if some of the defective products can be reworked, or if they have to be thrown away.

If they can be reworked, you have several options:

  • Sending the products back to China for repair (very difficult, since Chinese Customs don’t allow for defective products to be imported into China).
  • Decide that the value of the goods doesn’t make it worthwhile to rework the shipment, and throw them away or sell them in a parallel channel.
  • Do the repair job in your own company.
  • Find a repair center in your country.

Many importers are not aware of that last option. Some companies, such as Berry Services in the center of France or QCI in the US (West coast and East coast), respond to this need.

They can do 100% inspection and sorting, but they can also work on the products themselves. Here are a few examples:

  • Removing mold stains from shoes
  • Washing garments to remove dirt/oil stains
  • Ironing garments to make them presentable in a store
  • Making alterations to correct a faulty workmanship
  • Relabelling (correcting mix-ups in labelling, placing barcodes that can be read, etc.)
  • Repacking

Sometimes it is necessary to find creative solutions — see this example from the QCI website:

Creative_solution

 

Oh, and also… Ask yourself if you should keep working with the same supplier or end the relationship.

Chinese Suppliers’ Poor Understanding of Statistics

In China, in many product lines, a factory that makes 95% good products is considered a good factory. And its managers will not feel ashamed.

Now, let’s look at it another way. A factory that ships 5 million pieces a month, at a 95% quality rate, ships nearly 3 million bad pieces a year to its customers. Not quite the same story. There is no reason to feel satisfied. They should work hard at raising the bar.

And, from a customer’s point of view, it is not pretty either. Let’s say you purchase 20% of that factory’s output. You will receive more than half a million bad pieces a year. You should keep a close eye on their production.

Statistical tools can help change people’s perspectives in many ways. I listed a few examples below.

Having the production and the quality departments work together

Production and QC people tend to fight instead of working together. For example, an inspector finds a problem and asks to stop a process. But the production people (who have targets about their workshop’s output) will say “show me a defect now” and “we just checked it together and we couldn’t see any problem”.

In certain factories, statistical process control can be an excellent solution. It gives simple rules for stopping a process and having a close look at it. And ideally it involves production operators rather than quality control technicians.

Expecting some level of variation

Nearly all Chinese factories have very poor process control. It means luck plays a large role in the result of their production efforts. (Put nicely, “random elements” affect the quality level, the amount of scrap, as well as timelines in a significant manner).

If a quality auditor estimates that the quality level is 95%, and if a few shipments in a row are at a 99% quality level, one bad shipment will come up soon. You can count on it. The concept behind this is called “regression to the mean” and can be considered a law of statistics.

A statistician joked that, if the topic of regression comes up in a court of justice, the side that must explain regression to the jury will lose the case. So I won’t try to explain it in depth, but Wikipedia can help.

Distrusting cause-and-effect explanations

Let’s say a particularly bad shipment triggers long meetings with the factory’s management and hefty penalties. And this shipment is followed by a markedly better production run. It means the buyer’s response was appropriate and the supplier paid much more attention to production quality, right? I would not bet on it.

Again, regression to the mean is at work here. A particularly bad shipment (way below average) is usually followed by a shipment that is better (and closer to the average.)

No such thing as an auditor’s “golden fingers”

QC inspectors usually work on the basis of statistical tables. But most auditors don’t. For example a quality auditor will pick three samples of warehouse incoming records and will then ask for the corresponding incoming QC records. If the factory is unable to provide two of the three requested documents, they will probably say “you took just the wrong ones, but if you check more you will see it is a very isolated problem”.

What is the chance that the auditor picked those two documents out of hundreds of files, and that those two are the only ones missing? People well versed in statistics will say it is close to impossible.

Now, if you have read this article until the end, try to explain this to your Chinese suppliers… The challenge is often to translate these concepts in a very down-to-earth manner.

Do you agree?

A Great Guide to Electrical Safety Tests

We just found a very nice guide published by Slaughter, a manufacturer of testing equipment.

This Guide to Electrical Safety Testing is free to access on the internet.

Here is what it explains:

  • What is class I and what is class II
  • The two lines fo defense to protect the user from electrical shock (insulation, and safety grounds)
  • What tests are to be performed on samples, and what tests are to be done on 100% of products
  • Types of injuries that can be induced by electrical shocks
  • How to set up a safe workstation (with nice graphics)
  • Checklist for setting up a safe test station
  • Clear explanation of the hipot test
  • Clear explanation of the ground continuity and the ground bond tests (and which one to apply)
  • Clear explanation of the insulation resistance test
  • Chart with settings for most common tests and standards

If you work with electrical products, especially for sale in the US, I strongly suggest you get that document!

Comparison of Asian Countries for Production of Garments & Shoes

A few weeks ago, an executive with a long experience in the footwear and garment industries shared some insights about different Asian and African countries, as far as production capabilities go.

Here are my notes:

Myanmar

  • Right now it is not a major manufacturing center, but it should gain momentum in a few years.
  • 80% of the population works in farms. Don’t expect a very fast migration to cities.

Ethiopia

  • Large potential workforce (the second most populated African country).
  • Workers there expect to learn new skills. They don’t just come for a job. It is possible to set up a very good factory there.

Philippines

  • Culturally it can be considered a latinoamerican country.
  • Non-monetary rewards go a long way for motivating the workforce. It is closer to Mexico than it is to China in that regard.
  • Very poor government — it was Asia’s second richest country after Japan after World War II, and they used to have Chinese as maids — now the opposite is true.

India

  • Factories there can’t seem to ship anything on time, whether it’s garments, furniture, or apparel. That’s the major problem.
  • In the North (and in neighbouring Pakistan), factories employ men (more than 90% of the workforce).
  • In the South, factory workers in apparel are mostly women.

Bangladesh

  • It is possible to find some good factories (from a quality and efficiency standpoint) with a good workforce.
  • Those good factories are more likely to be close to Chittagong (local village employees).

China

  • Labor productivity is still very low. In the shoe industry, for example, the average is 0.5 pair per labor hour, compared with more than 2 pairs in North America. This difference is NOT primarily due to automation, but to smart industrial engineering.
  • Very hard to engage in deep training with migrant workers who are planning to return in their home town in a couple of years. Changing the mindset is difficult.
  • Migrant workers are very focused on short term monetary gains.
  • Because of rising costs, China will keep losing garment and shoes business in the coming years.
  • Many Chinese and Taiwanese manufacturers are still chasing cheap labor instead of focusing on increasing labor productivity. They are relocating, or setting up new factories mainly in Indochina (Vietnam, Cambodia, and Myanmar mainly) and in Indonesia.
  • In those countries, they can hire, and communicate with, a few local managers.
  • Chinese manufacturers generally don’t relocate their facilities to South Asia (India, Bangladesh, Pakistan). Similarly, African countries will probably not be a good option for them.