As the pressure on costs is getting more intense, many importers wish their suppliers focused on optimizing their production. In most cases, there are no optimization efforts going on.
Why is that?
1. A focus on the golden eggs, not on the goose
Most factory owners don’t intend their kids to take the relay once they retire. They see their business as a risky endeavour that might fail, or might be shut down by the local government, in the not-so-distant future.
So they focus on the cash they can out of their business. This year, not in 10 years.
In other words, they focus on getting the golden eggs. Not on improving the ability of the goose to produce more golden eggs in the future.
2. Optimizations only come from the top. If at all.
Why from the top? Not because line workers have no idea… but because in China nobody listens to them.
Unfortunately, most factory managers sit down in their office, “move paper”, and enjoy air conditioning. They are good at keeping busy. The last thing they want is to spend more time on the shop floor, looking at equipment and workers.
Sometimes a big customer can push hard and get a manufacturer to implement changes in their operations. If you are a small customer in the eyes of your suppliers, you can most probably forget about this.
3. There are a lot of initiatives to cut costs…
… But that’s not necessarily what you want.
I am thinking of the deliberate cheapening of the product. What Paul Midler calls “quality fade”:
One of the most disturbing examples I have encountered while working in China involved the manufacture and importation of aluminum systems used to construct high-rise commercial buildings. These are the systems that support tons of concrete as it is being poured, and their general stability is critical. The American company that designed and patented the system engineered all key components. It knew exactly how much each part was supposed to weigh, and yet the level of engineering sophistication did not stop the supplier from making a unilateral decision to reduce the specifications. When the “production error” was caught, one aluminum part was found to be weighing less than 90% of its intended weight.
Buying cheaper materials or using less of them is a natural tendency for many Chinese manufacturers. And they are smart enough to know what not to tell their customers.
That’s not what I call “optimization”. That’s just an attempt to get more golden eggs, even though the goose might pass out.
4. Very few ideas, if any, are tested
I was discussing with a European who used to manage a factory here in China. He often suggested to try this or that, and the production people would always say “it won’t work”… even though they never tried it before!
For example, they tried using recycled PP plastic instead of new material, with success. They tested to which point it was still acceptable for customers, and then standardized the new method.
It is similar to a “quality fade” approach, but without trying to screw the customer. Why don’t the Chinese do more of this?
Where does it come from? A lack of scientific method, for sure. But there is something else. It seems to be an ingrained belief that the current way is the best way, and that there is nothing left to discover.
Or maybe is it just an aversion to running an experiment and taking the risk to fail? I am not sure.
I would be curious to read what our readers think about this… Please comment!