If you want something done right… You Gotta Do It Yourself

Monday, July 2, 2007 8:39
Posted in category From the Factory Floor

this is a phrase I probably first heard from a cartoon character at the age of 2, and in the 30 years following that, I have heard it countless times.

Never has it been more relevant though than in my last 5+ years in China as I have worked with companies looking to learn about China, source from China, invest in China, sell into China, or defend themselves from China(my first project was actually a defensive maneuvering project against Chinese products entering Africa).

And never has this phrase been more relevant for many multinationals.

On the investor side, we are all bearing witness to perhaps the JV implosion of the decade as Danone and Wahaha trade shots in the press. Sure, JV was the only option at the time, but many in their industry opted out of the JVs by acquiring JV partner stakes the very second WTO permitted… Danone didn’t and now they will potentially have to rebuild

More importantly to U.S. consumers though is how this statement applies to supply chain management, manufacturing, and the number of tainted goods entering the U.S. chain.

for the last couple of weeks, I have been trying to make the point that U.S. manufacturers, wholesalers, distributors, or retailers whom outsource to China need to ensure that the products they are bringing from China to the U.S. are safe.

This is not to say that Foot Locker needs to test Nike shoes to ensure quality performance, it is to say that if Nike is going to move production from Kentucky to Shantou, they need to ensure that goods coming from Shantou are just as safe as those made in Kentucky. That if local products are used to cut costs, that the properties of those materials do not compromise the integrity of the products.

For many, this statement has touched a nerve. After all, it is the CHINESE who are fudging the system, putting in hazardous fillers into pet food, failing to put in tire strips, and using lead paint… so it is THEIR fault… right?

WRONG

As I stated above: U.S. manufacturers, wholesalers, distributors, or retailers whom outsource to China need to ensure that the products they are bringing from China to the U.S. are safe.

and in the case of the pet food, tires, toy trains, and a host of other items recently, it is apparent to me just by reading the news that in each and every case that the U.S. importers did not have a real quality control system in place…. FTS waited 2 years before testing the products even after suspecting a safety component they considered “key” was not being added, it took the Chinese government 10 days to identify the suspect suppliers of pet food that killed thousands of animals in the U.S…. a sign NO ONE had ever visited the factory..

so, it is refreshing to see in the news today that some in this game are finally catching on and that rather than blaming the CHINESE, a real assessment of where the breakdowns occurred is happening (Schumer Faults U.S. Safety Checks of Chinese Goods).. and some companies are already taking actions publicly to ensure their products are not the next ones to end up on the 5 o’clock news (U.S. companies focus on China)

Meanwhile, I find it interesting that the one industry China is getting credit for lately involves the fireworks industry.

Expect to see more here on this issue. To be honest, this issue more than any other will impact the future of U.S. China trade relations, and after reading a number of pieces on MSNBC I am beginning to worry a bit that the average Joe in American thinks the average Zhou in China is just out to kill them and their little dog too

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3 Responses to “If you want something done right… You Gotta Do It Yourself”

  1. University Update - Google - If you want something done right… You Gotta Do It Yourself says:

    July 2nd, 2007 at 10:04 am

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  2. Etienne C says:

    July 5th, 2007 at 3:07 am

    Actually, the company that is selling a product is always responsible for the quality of what it sells. But what has happened in the Western world is that the detailed quality control function has implicitly been outsourced to suppliers, and backed up by clear contracts. The buyer specifies a product quality level and refers to specific standards in a supply contract or purchase order and then expects the supplier to enforce this by activating its QC system.

    This was all done implicitly, not explicitly – there is not formal outsourcing contract for quality control. But is it was happens. It works well in the West because all suppliers have expertise and economies or scale to perform the QC. They also understand the local regulatory requirements and traditional quality expectations.

    Once you come to China, suppliers either do not have the expertise or do not even realize the level of quality requirements. In some case, they knowingly take a short cut and deliver substandard products. The outsourcing principle brakes down – buyers are in effect outsourcing the QC work to an unqualified sub-contractor!

    This is why it is so important that buyers fully “re-insource” quality control. Either they have their own team or they use third party organization to do that. Gradually, they will be able to outsource part of the QC work again to trusted suppliers, but still keep the level or awareness and audit to avoid falling back into the implicit outsourcing of QC to incompetent subcontractors.

  3. Sourcing in China: Are the Buyers Getting Smarter? - Updated | All Roads Lead To China says:

    July 30th, 2007 at 12:12 am

    […] If you want something done right… You Gotta Do It Yourself […]