It’s Not “Quality Fade”. It’s Oversight Fade. It’s Not “Poorly Made”. It’s Poorly Managed

Monday, August 20, 2012 9:40

In response to the recent news that two Chinese automakers were recalling cars exported to Australia for a quality failure (asbestos in car seat foam), Michael Dunne wrote the follow up post on China Realtime Chinese Asbestos in Australia? Blame ‘Quality Fade’ where he offers two possibilities for how the “failure” occurred:

First, were they simply unaware of the existence of the cancer-causing asbestos — or of the fact that asbestos is banned in 50 countries, including Australia? The answer would seem to be no on both counts.

Or

The most likely culprit is a China manufacturing phenomenon, vividly described in the book Poorly Made in China, known as “quality fade.” Companies deliver initial product samples that pass inspection tests with flying colors. In time, however, the quality begins to deteriorate as the manufacturer – often under pressure to preserve profits – introduces cheaper or non-standard product materials. The more the material is hidden from plain view, the more likely it is to be replaced. Result: Yesterday’s good-looking high-quality sample fades into today’s good-looking-but-flawed offering.

It was an article that was brought to my attention by G.E. Anderson, someone who has experience with manufacturing and the auto industry in China, and in a few responses to him (on facebook) I wrote the following :

Quality fade is a term coined by a Wharton grad (who wrote a book) but had no business on the shop floor, and saw “quality fade”… In reality… it is not about “poorly made” or “quality fade”, it is about “poorly managed” and “oversight fade”.

If Chery and GW were the victims, they were willing victims. Either they had no process in place to test/ verify specs were being met, or someone made a decision to clear the product in hope they would not be caught by Australian authorities. I won’t speculate as to which, but this is not the first time this has happened and it will not be the last. Only different is that the brands involved are Chinese.

[..] If they have testing facilities on site already, then what the marginal cost of testing a couple of chairs is disposable equipment and staff cost… against the cost of recalling and replacing 32,000 cars… even if they only pay for transport cost (and are able to sell the returns in China) that is still a poor process.

In my previous experience managing supply chains in China, we tested EVERY shipment at EACH supplier and at assembly. We tied final payments to customer approval (after receipt). And we did this because it removed the need to “trust” anyone. It was a process that ensured the integrity of product quality and held suppliers responsible for failures at their site, and without any debate

And I know that this is a point that I, and others in the blogosphere have made, but it really needs to be said AGAIN.

Manufacturing in China requires a PROCESS to identify the potential for risk, plan for it, monitor it, and address it.  this is actually true anywhere in the world (even in Ohio), but in my time in China one of the things I find myself continually running up against is people (firms) who are so willing to trust suppliers or use a contract as a reason to ensure quality.  Even when they would not trust someone from one state, province, or municipality in their home country, continent, or region.

There is a “what happens in China stays in China approach” to manufacturing in a sense, and while that may work for years, at some point the process breaks down and Barbie goes for a lead paint dip, dog food includes industrial plastics, installed airline parts don’t meet spec, and yes… asbestos ends up in car seats.

Where this story is unique, is simply that the “affected” firms are Chinese, but that is it.  And I am not buying the fact that they were the victims they are holding themselves out to be.

A hunch I have based on another line in Dunn’s write up:

representatives from Great Wall said that they had conducted their own in-house testing and concluded that the asbestos was not a danger to “human bodies.”

Chery, for its part, offered the implausible excuse that cars meant for the domestic market (China does not ban asbestos) were “accidentally” shipped to Australia.

Which leads me to a final point.

Quality does not fade in China, oversight of systems does.. and nothing is poorly made in china, it is poorly managed.

Firms need to, AT ALL TIMES, remain vigilant, monitor their sources, and test at regular intervals, or risk failures.

To do otherwise is not just irresponsible, it illogical given all that is known about manufacturing in China.

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