When Paul Midler wrote ‘Quality Fade’: China’s Great Business Challenge in 2007, I remember it struck a nerve and that article was widely quoted. And, nearly 14 years later, the term ‘quality fade’ is rather well known among importers.
As Midler described it:
One of the problems facing China is that manufacturers continue to engage in a practice I call “quality fade.” This is the deliberate and secret habit of widening profit margins through a reduction in the quality of materials. Importers usually never notice what’s happening; downward changes are subtle but progressive. The initial production sample is fine, but with each successive production run, a bit more of the necessary inputs are missing.
How to detect cases where quality is on a downward trend?
Recently, on Linkedin, someone asked how to detect and how to prevent such cases. Case Engelen from Titoma gave a solid response:
Some friends have said it’s so bad that they just change suppliers every 2 years, because after that time they get too complacent that they’ll start raising prices or lowering quality.
You can counter quality fade by clearly documenting all the points you will be checking, for every shipment, so there is no wiggle room. For cables for example you may need to count the number of copper wires… but to be honest, a factory that tries to lower quality that way is not a good partner, and you’d better look elsewhere.
I really prefer to do whatever we can to stick with the same factory for years, and we’re succeeding quite well. I think the best way to stop unreasonable price increases or playing quality fade tricks is to make it very clear that you’re able to walk away: you need to own the whole design: BOM and Firmware & the molds, the assembly SOP etc.
I can only agree with Case’s points:
- I wrote an article about good ways to set a very specific quality standard and I wish all importers read it. It goes hand in hand with close monitoring through inspections, of course.
- And I listed “excessive reliance on the chosen supplier” as one of the 3 deadly mistakes for new product manufacturing.
I also mentioned the importance of the focus of the factory owner:
If you tend to work with factories whose owners are all focused on “making deals” and spend no time in their operations, you’ll probably suffer. I’d suggest you add that in your supplier qualification criteria.
The personality of the owner and the culture he has set in his company will encourage or, on the contrary, prevent quality fade.
Those “old-style” factory bosses, as I call them, think in the short term and are happy to cause quality fade. Try to avoid them. Instead, work with those I call “forward-thinking” in an article I wrote years ago.
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Does that make sense? Do you have any other good tips to share?
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