Chinese factories tend to focus on "making production", rather than working on improving their processes. In their vast majority, they try hard to get new customers and grow their business, even when a few improvements in their processes would decrease their overall costs by 10% or 20% (and potentially multiply their profit by 5 or by 10). The problem is, a process is either improving of degrading. If no one is working on its stability and its efficiency, it is sliding back. What I … [Read more...]

Every time I read an article about rising Chinese labor costs, it seems there are only two solutions: moving to inland provinces or automating production. I do not really buy into these proposals, and I want to focus on the myth of automation. Automating a process allows a reduction of headcount (lots of operators are replaced by a few technicians who set up the machines) and an acceleration of cycles. But there several drawbacks. First, it is a large upfront investment. Does it make sense … [Read more...]

The quality assurance programs of most importers, when it comes to their China purchases, are far from being fool-proof. As Richard Brubaker wrote (in "20 Things I Have Learned About China"): There is no “Poorly Made in China”. There is only poorly understood, badly planned, and horribly managed. And I found an excellent illustration of this principle: a newspaper article about tainted children jewelry that points out the holes in quality assurance programs: So far this year, 20 different … [Read more...]

Some really large factories appeared in the US and in Europe in the early 20th Century. The prime example is the Ford Motor Company and its huge factories. The basic idea was that the higher the number of pieces produced, the lower the unit cost. This is what 99%+ of Chinese factories still believe. They'd much rather make 100,000 widgets in one batch, rather than 100,000 widgets over three batches. Why is this a problem? Because this notion is misguided. Toyota started reducing the size … [Read more...]

Chinese factory workers are often seen as the obstacle to higher quality, fewer working hours, and better safety measures. Let's study each of these issues separately: 1. Chinese factory workers, not capable of good workmanship? As I wrote before, managers like to point to individual operators as the cause of quality problems. And I admit it is quite tempting in certain cases. For example, Chinese factory workers usually don't stop their work flow, even when they notice defects that … [Read more...]

The root cause is what must be addressed to eliminate any quality problem. Getting to the root of a quality problem is seldom the concern in Chinese factories. They prefer to point fingers, and find responsible people. The China method: the "5 whos" There is no concern about the root causes of problems. The short-term mentality focuses attention on quick fixes, and often on finding mistakes. Here are just a few real-life quotes: Workmanship is not good? The operator did not pay enough … [Read more...]

I often tell the factory employees they have too much work-in-process inventory. In general, they don't understand how lower inventory can go hand-in-hand with faster production and lower costs. Last week I was in a factory that really, really doesn't see anything wrong with WIP inventory: Another problem is that WIP can be lost, stolen, or damaged. This time I got a great illustration... I couldn't help taking a picture: They are sleeping on the fabric, before it's used by the … [Read more...]