Sunday, June 16, 2019

REPOST: China Quality: Good Enough is NOT Good Enough

Repost: China Quality- Good Enough Is Not Good Enough
I posted this article almost 2 years ago. Recent events have proven to me that not much, if anything, has changed since I first wrote the below. Except tariffs and a further tarnishing of China's reputation in the US. IF China is to successfully make the transition from emerging economy to developed country AND a part of the world community, quality standards and mentality must be addressed. There is more than technical change needed; this calls for CULTURAL change. That can only come from the leadership...

Among the tens of thousands of factories in China, there is a wide variation of quality level, from very good to very bad. Factories who produce for domestic consumption typically have very little concern for quality; export-oriented factories generally need to be more conscious of quality, to meet their customer’s minimum requirement and not have their production rejected at final inspection. It is those factories we will examine here.

On average and in most cases, the customer’s minimum requirement is the sole operative standard; in very rare cases does a China factory have their own internal standard, or even a picture of what they expect their final product to reach. The operative benchmark is: good enough.

Think about it- how many well known China products can you think of that evoke an association in your mind that says, “ Oh yeah-that brand is really good quality.” Very few, and not well known, such as Haier or Huawei. Contrast this with Germany or Japan where most people can easily recite many brands they associate with good quality-and usually a commensurate higher price.

This mindset holds China back from reaching the level of quality that can raise it to the level where prices can be increased to match the higher costs of labour and materials-and be accepted by buyers and consumers for those reasons. A consumer in a store investigating a product finding out it is made in China usually produces eye rolling-what China wants is a smile of recognition. How can China achieve this change of perception?

In fact, the inability to raise quality standards amidst higher costs and market price pressure is having the opposite effect-factories will want to find a way to lower costs so they don’t lose money at lower prices-which usually means quality compromises. This may be conscious, or simply (as is the case most of the time) of rushing the production through the process to deliver on time, without spending time or money to pay attention to the quality standard of the product. Just making it through-sometimes with smoke and mirrors.

What compounds the problem is the cultural peer pressure put on the customer’s staff or representatives, who are almost always Chinese. As quoted before from Jim Mann’s Beijing Jeep, the Chinese are very good at purposely confusing friendship with business, viewing friendship as a relationship where friends “help” each other. Maybe in this case it would be letting them slide on marginal quality. What is more, the race card is often played with these staff- we are Chinese, you are Chinese- the foreigner is the outsider/enemy, even if they pay your salary. They hate me/they like me- very few Chinese can escape this guilt trip and realize that whether your factory likes you or not just does not matter in business. Business is business- not about emotions—just real things you can see. 

What needs to happen is:
1.    China factories need to develop their own internal quality standard.This should be a standard that supports the price they are asking for the product, and one they can be proud of.
2.   This standard should not be allowed to vary with the customer’s expectations or the price of the order. By definition, a standard is just that- a set of fixed points that a product should reach.
3.    Customers should clearly communicate their quality standard of excellence in product before any production starts and never, ever compromise for delivery or to be “nice.”Nice is emotion-products are real.
4.   Make it a practice of delighting the customer by exceeding expectations, not just getting by on good enough.  This will go far in getting new orders- and justifying higher prices.
5.    As I have said before, factories mustadopt a process-oriented quality system. Each process leading to the final product should have its own internal QC. This will pinpoint process problems early on, and prevent problems from wasting the factory’s money by reaching the final inspection stage.
6.    Factory should perform their own final QC before the customer shows up.Then, problems that do reach the final stage can be rectified before the customer is dissatisfied or rejects the order.
7.    Use the same quality standard for all materials and accessories.Producers cannot expect an excellent final product by addressing  only assembly.
8.   Most important- the antiquated mentality of getting by with what customers will accept-especially foreign customers-has got to change.Mentality that old and entrenched can only be changed if management is convinced it is in their short and long term interest. Good enough is not good enough.

This is not about cost of production. There is no doubt that efficient production costs less than careless muddling. This is about smiles- evoking that smile of recognition that Made in China means quality you can believe in. For China to advance in the world economy as it must, both quality systems and mentality must change. Then perception will also change.

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