Are you frustrated because a Chinese manufacturer has proven unable to meet your quality standard? Do they keep making promises of imminent improvement? And are you seeing no improvement?
I have had several discussions about this topic in the past week, so I thought I’d write about it.
It reminded me of an ‘oldie but goodie’ article — The Focused Factory by Wickham Skinner.
Skinner wrote this about US factories in the 1970s, and it is quite applicable to what we see in China today.
He described what he calls the ‘complex factory’ which is a ‘hodgepodge of compromises’.
The conventional factory produces many products for numerous customers in a variety of markets, thereby demanding the performance of a multiplicity of manufacturing tasks all at once from one set of assets and people. Its rationale is “economy of scale” and lower capital investment.
Here is the way it unfolds with the average Zhou who runs a factory in China:
- He wants more business in order to grow up and make more money.
- Every time he is contact with a potential customer that seems to have significant volume, he does whatever he can to get the business.
- He finds some success on a certain market, making products in a certain volume, at a certain price point, and under certain quality requirements.
- He still wants new business, and he gets a few customers who are on a totally different market, with a higher price point but more stringent quality needs. Mei wenti! (No problem!)
- These new customers keep complaining they don’t get their products made right. Zhou adds inspectors, puts pressure on his staff. It leads nowhere, until the frustrated new customers leave him.
Why is this?
In Skinner’s words:
A factory cannot perform well on every yardstick. There are a number of common standards for measuring manufacturing performance. Among these are short delivery cycles, superior product quality and reliability, dependable delivery promises, ability to produce new products quickly, flexibility in adjusting to volume changes, low investment and hence higher return on investment, and low costs.
This is quite true of the average Chinese plant. If they are optimized for high-volume, low-mix production at a low price point and a relatively low quality level, they will NOT do a good job under a higher quality standard.
Here is why:
[The conventional factory has adopted] a common attitude and set of approaches so as to neither overspecify nor overcontrol quality and specifications. One frame of mind and set of mental assumptions suffice for equipment, tooling, inspection, training, supervision, job content, materials handling.
Now, does it mean there is no way a manufacturer can be led to make at the required standard? No.
Look at Foxconn assembly plants. Many of their workshops are terrible. And yet, by sending many engineers there, Apple got them to do a best-in-class job… but only on the lines dedicated to their products.
There are three lessons in this example.
- The supplier will let you do nearly anything you want if you are a big customer, if you let them make some money (e.g. Foxconn’s components business), and if you bang on the table from time to time.
- Having dedicated lines that include staff trained to your standard is a must.
- Helping the supplier improve is a must in 99% of cases. And no, it is not a 1-month job. Many of our projects span over 6 months, and the job is never really finished.
What do you think?