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I just found an article on supplychain.com entitled Buyers find pitfalls of China sourcing (h/t to @MaxHenry). It is based on a survey of importers by a consultancy (Gartner). I listed below the main frustrations that were mentioned:
Vendors using fake certificates
Sometimes Chinese suppliers bought fake certificates attesting to ISO quality standards, Six Sigma and social compliance, which prove hard to detect.
This is a classic. Don’t trust any paper here–everything can be faked. Buyers who need to know have to pay for it (e.g. paying for third-party lab testing, or conducting a factory audit).
Price increases
Some manufacturers accept orders, receive deposits, and then ask for a price increase. Sometimes they simply want to make more margin. Sometimes they notice the products are more complex to make that they thought. And sometimes they are very busy and they don’t want the order.
How to react in this situation, if you really need the factory to produce that order for you? See the last post on the SRI blog to see how some real professionals do.
Reducing production quality over time
Many Chinese suppliers reduce product quality over time in order to increase their margins and profits. Typically this happens after the first few orders, whereby a product’s ingredients or subcomponents are altered without changing the outward appearance, making it difficult to detect.
That’s exactly what Paul Midler calls quality fade. Sometimes it is deliberate, other times it is a natural degradation in the quality standard.
In any case, experienced purchasers keep inspecting and testing their products over time, not only for the first order.
Ignoring delivery times and patents
Gartner also found little or no respect for sticking to delivery times and the violation of patents which can result in lawsuits for infringements.
These are two separate issues, calling for different solutions. Penalties for late shipment can help reduce delays. And a good “NNN” contract can reduce intellectual property violation risks.
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I would add one more frustration that I hear all the time: the unwillingness of Chinese suppliers to be responsible for quality issues in their past shipments.
Any other problem that keeps bothering you?
