Quality control a risk in China: supplier

When sourcing from China, the devil is in the detail, a parts supplier claims

Quality control a risk in China: supplier
Quality control an issue in China: supplier

By Anna Game-Lopata | June 3, 2013

When sourcing from China, the devil is in the detail, a parts supplier claims.

Manufacturing component specialist Paul Sly says while China can’t be beaten for value on its output, as time moves on, initial standards
slip for reasons non-Chinese customers don’t understand.

Sly, who is General Manager CSGtech, a supplier of seals and gaskets, says initial batches of product are usually excellent – "exactly to spec".

But where customers are not careful to ensure they are communicating constantly and clearly with their supplier in China, quality control can suffer with disastrous results.

Sly says his business, which works closely with manufacturers and end-users to source the most suitable, cost effective products available in Asia, knows of a plumbing products company which regretted the components it bought from China.

"The components were worth about $30 of the input into a product of an eventual retail price of $300," Sly says.

"The supplier substituted a different type of O-ring to save a few cents –totally destroying the value of a container load of the product sitting on his doorstep, worth tens of thousands of dollars.

"The poor fellow was stressed right out – his best customers, whom he had spent years building up, were demanding answers.

"It’s an awful feeling when your best customers start ringing you up to say an entire batch has failed - and you’ve got hundreds more of the same sitting in your inventory."

In this instance, the manufacturer was able to sort out the issue through his representation in China, and ensure it never occurred again.

"But potentially this sort of situation can destroy relationships right down the market chain – not to mention the legal and safety issues," Sly says.

Sly adds his own company had a quality-focused global customer seeking to source a coupling for use in mines in cold regions where the temperatures descend to minus 50 degrees Celsius.

"One potential [Chinese] supplier suggested standard materials it had used for a product designed for a totally different climate," Sly says.

"It looked similar and was cheaper – but it would have failed badly in service, regardless of cost."

Sly says one of the big reasons for quality and product variations is that Chinese suppliers are more adept at dealing with huge quantities of production - big orders where margins of a few cents are critical.

"They have to be flexible and responsive to cost in such a vast commodity market and will change suppliers accordingly," Sly says.

"Down the line in Australia, where our biggest orders often amount to an hour’s production in China, quality control, not cost, is the critical issue.

"So Australian companies have to look out for what happens if suppliers substitute something different and just a fraction cheaper – but something that ultimately doesn’t work when it arrives Down Under and then the situation gets ugly."

"The lesson from this is to ensure you properly manage the whole selection, acquisition and quality assurance process, from factory floor to customer’s door," he says.

Sly says for this reason, CSGtech is currently opening an office in China to provide closer supervision of the quality focus and governance required for doing business in China.

"The issue of quality governance is magnified by distance from suppliers - both geographic and cultural distances and differences," Sly says.

"The problem can infect and paralyse entire distribution chains in key industries such as mining and energy, oil and gas, manufacturing, metals and materials handling, transport and automotive, medical, defence and marine.

"If, like so many Australian manufacturers, you are sourcing from China to compete, then being unaware of what causes even small quality variations can be devastating," he says.

"The Chinese are among our best suppliers in Asia and we love their ‘can-do’ attitude," Sly adds.

"Through our network of internationally accredited manufacturers in China and elsewhere, their competitiveness means we can supply an exceptionally high level of product at exceptionally competitive prices.

"But when sourcing from China the difference between a raging success and a flaming failure can be proper time and effort invested in understanding your market and having in place the highest standards of quality control."

China recently become the world's top manufacturing country by output, ending the United States' 110-year run as the largest goods producer.

Chinese exports of all types are estimated to have exceeded $2 trillion
last year.

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