Why Quality Fade Is A Danger We May Not See Coming

Quality Fade is an insidious practice where the supplier reduces your product quality over time almost imperceptibly in order to cut costs and make more profit. We can all agree that being supplied with products that don’t reach our quality standard is unacceptable, but how do you protect yourself? First, know your enemy! Are your products or suppliers in a high-risk category when it comes to bad behavior? Then, take action. Identify if you are a victim and put in place a relevant testing plan to catch or stop the issue. We explain what you need to do here.

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What is Quality Fade?

The term quality fade was coined in a 2007 Wharton School of Business blog by Paul Midler, author of the book “Poorly Made In China.” In 2007 there were various reasons to scrutinize the quality of products coming from China, and a particularly notable scandal was the case of lead being found in Mattel toys leading to 19 million products being recalled. According to Milder, quality fade is:

The deliberate and secretive habit of widening profit margins through a reduction in the quality of materials.

Generally, you will negotiate to buy a certain material at a certain price. Suppliers will start production and follow your specs to the letter, thinking that you will scrutinize the order. If everything is going smoothly, some suppliers may feel that the specified material can actually be replaced with something a little cheaper without causing issues. They know they cannot ask you to alter a material, as you will demand they follow your quality standard and specifications, so they secretly push the boundaries making an adjustment that is a reduction in quality that will hopefully be so small it escapes your notice. If that works, perhaps they go further in subsequent orders. Why? Purchasing cheaper materials, or making savings on amounts of material used somehow, results in higher profit margins for the manufacturer.

If the manufacturer genuinely thinks that your specifications overshoot what is actually required to get the results you need, entering into a dialogue and offering to investigate options that will fulfill your needs and may also be a little cheaper at the same time would be the correct way to approach this. However, manufacturers don’t always have the ear of decision-makers and purchasing agents may not be open to having this conversation which is why secret quality fade becomes a thing. (02:27)

Is it still happening today?

Bad business practices like quality fade don’t seem to be as common now as they were in 2007, at least where China is concerned. 2007 China was still developing and new manufacturers were mushrooming up everywhere, many out to make a quick buck. Today’s manufacturing often tends to be more professionally managed. That being said, the state of China’s economy could drive some manufacturers to try playing tricks like this on customers once more if they’re in dire financial straits. (09:25)

Actions to help you avoid quality fade.

Identify if this is a likely situation with the supplier you’re using: Due diligence, audits, and factory visits help with assessing the state of the supplier. Have they invested in good equipment? Do they have a long-term vision? Do they train the staff? If the answer is no to questions like this, the supplier may have more of a short-term mindset and could be tempted to play games like quality fade to maximise profits ASAP.
Are your products standard off-the-shelf products or just lightly customized ones? These are at a higher risk of quality fade than those which are more highly engineered.
Ensure that your supplier is made aware of what the materials or components you are buying are used for. For example, if you are buying steel for use in construction, the supplier will then be aware that any safety issues caused by out-of-spec materials are wholly unacceptable. (12:15)

If you are a victim, how can you catch it?

If the worst happens, do you have a reasonable testing plan in place to catch the affected products that will test, measure, and validate the quality and key performance characteristics of the products? For example, if you are buying painted figures, you need to have the paint tested for hazardous substances periodically. Let’s say you buy 6 batches of products per year, it may be sensible to test 2 to 3 of those batches to stay on top of your product quality. You may make the supplier aware that you are checking regularly, but not tell them your exact pattern so they are kept on their toes.

Do not let the supplier manage the testing and choose which samples are to be tested as they may game the system by selecting ones they have prepared to pass while others are still of lower quality. (18:30)

Examples of products affected by quality fade.

Quality fade usually involves the materials used by the supplier (or even the sub-supplier which they don’t even know about), where they don’t purchase the correct ones. For garments, examples include swapping in different materials such as using polyester instead of polyamide as they are similar, or the finishing being done to a slightly lower standard resulting in less color-fastness (which may not be immediately apparent), or even that the material is cut slightly smaller to reduce the amount used resulting in slightly smaller garments.

Product categories with cutthroat price competition are more likely to suffer from quality fade, as the ability to make more profit becomes more tempting. Risky categories include cheap footwear and garments because suppliers are less likely to have a long-term mindset due to the low margins they make.

Also, products that have been surface treated can be open to abuse. For instance, electroplating can be cheapened by adding fewer solids to the bath or taking products out of the bath sooner. The product will still be plated and may not visually look any different to the specification, but after a few months, the plating may wear and cease to perform properly or look worn and old. For products like this a risk analysis will flag that abrasion testing is necessary and you can include this in your ongoing reliability test plan for the products (where you periodically test batches for key risks such as sub-standard plating). (23:44)

Ongoing reliability testing: Warn the supplier, or do it secretly?

Whether you let the supplier know that you are doing ORT largely depends on the product and supplier type. If your supplier has a short-term mindset, ORT becomes more important.

For off-the-shelf products and materials where the risks of QF are higher, doing unannounced testing could work to keep them on their toes. But if a part has safety-critical characteristics, this should always be made clear to the supplier from the start.

Chemical analysis testing can take time and be expensive, so the ORT throughout the year may cover different tests on different occasions until you have covered the whole range. It may be wise to tell suppliers what you are going to test and how, but not exactly what will be tested per batch…they should assume that you will test to all standards each time.

If the product is highly customized and engineered with lower risks of QF, the manufacturer should have the technical ability to guide you on which testing is appropriate. If they’re capable and trustworthy, they can probably do some ORT themselves while you only occasionally take some samples for testing just to keep some visibility over quality. (28:51)

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