Laboratory testing in China: ideas for optimization

A few weeks ago, Jean-Etienne Alain, deputy director of Canal Toys Asia, was a speaker in an EU Chamber of Commerce in China seminar. He explained the way his company managed to optimize the laboratory testing process.

I found it very interesting, so I took some notes that I am reproducing below. His company sell toys, mainly into the European Union, that are made in China.

Here are the challenges they are facing:

• Many laboratory tests are necessary to make sure the EN71 directive is respected. It amounts to a lot of money.
• They need to respect very strict color requirements from the licensors (Disney and such).
• They work with many factories in several areas of China, so controlling colors is very hard.

Here is the solution they found:

• They decide what colors will be used before all the designs of a new season are confirmed. They reduce the number of colors as much as possible.
• They buy all the components themselves, to maximize control over the supply chain.
• They launch “testing campaigns” for all the components to be used. Even if a component is to be used in several production across several factories, it is tested only once.

It allows Canal Toys to enjoy the following benefits:

• More control over the supply chain.
• Lower testing costs through consolidation.
• They buy the components earlier and they start the injection molding process before the peak season of May and June (the toy business is very seasonal because of Christmas sales). It means prices are markedly lower.
• Some testing is still necessary in production, but only on the components that could not be tested prior to production.

Obviously they need a substantial team on the ground to coordinate all this, but it allows them to have more control and (probably) lower costs than many competitors.

Anybody has other tips for optimizing lab testing? What do you think?