Made in China: Better safe than sorry

Made in China: Better safe than sorry

WE TAKE A STEP BACK AND ANALYSE THE BLAME GAME CONCERNING THE QUALITY OF CHINA-MADE PRODUCTS.

20 years ago, "Made in China" represented cheap products that weren't up to par with Western standards. If you wanted your fridge, toaster or TV to work (and more importantly, to last) you had to invest a little more in a high-quality Western model. It was as simple as that: good quality had its price.

But with the rise of Chinese goods in the global market, customers around the world found that good quality at cheap prices was indeed possible. All over the world China-produced goods were praised for their competitive prices, while quality became less of an issue. The US, for example, ramped up toy imports from China and millions of American kids happily played with their China-produced GI Joes and Barbie dolls. It was not until Mattel's recent recall of leadpainted children's toys that the economic paradox of "more for less" became obvious.

There are two key questions that arise in the orbit of toxic toothpaste and poisonous paint: Who is to blame for this mess? And how can companies avoid becoming the next Mattel?

The blame game

Responses about who to blame have been fast and furious. The US and Europe have complained about lax Chinese regulations, low quality assurance (QA) measurements and ruthless Chinese manufacturers who increase their profit margins at the expense of their customers' health. Protective tariffs and bans of products made-in-China have been called for until it would be assured that Western kids can safely handle their toys again without having to wear protective gloves and safety goggles.

China has struck back saying that Western governments, corporations and media are engaging in blatant trade protectionism. US pacemakers and soybeans were rejected by Chinese customs as they did not meet Chinese standards.

The blame game is in full swing. But amidst all this fingerpointing, a pattern of actual facts remains clear :

One fact is that many Chinese manufacturers cut corners: by using lower-quality materials, by running cheaper production processes and by violating pollution laws. Their actions might not be intentional (e.g. suppliers are often not up to date with the latest product standards or lack sufficient resources) yet the outcome is the same. However, the driving force behind this are, in fact, multinational corporations who have been aggressively pushing down prices. According to the Wall Street Journal, discount retail chains in the US have forced down the price of clothing imports by 25% since 1995. With shrinking margins, suppliers struggle to make ends meet; a fact likely to result in this socalled "quality fade". So despite the obvious non-compliance of many suppliers in China, it should be clear that the final responsibility for flawless products lies with the international buyers - in their own interest.

How not to be the next Mattel

As expected, China and the US have quickly launched a plethora of campaigns, initiatives and regulations, from grass-roots to highly official, trying to keep the product safety and quality issue from spinning out of control. But are these measurements really of any help to a company involved in China business now? Instead of relying on government actions, companies have to develop a pro- ctive approach to secure their product quality in an efficient and sustainable manner.

Being on the same page with your China supplier in regards to quality standards can be the headstart to securing product quality. This can be obtained by meetings and training sessions where quality goals are mutually agreed upon and QA measurements are explained and put into place. After all, sourcing relationships work best when both parties benefit from them.

Yet, despite all goodwill and relationship building, control is still the one and only conditio sine qua non. This especially holds true for China where one of the most basic principles in business is (pre-) caution. A system of independent, random and comprehensive checks and balances is most important for a successful China engagement. All actions and processes should be double-checked by a trustworthy second pair of eyes. If the container content is only checked upon arrival, companies might be in for a big surprise and quite possibly lose precious time and money. Therefore, all QA measurements already have to take place in China. As the saying goes, better be safe than sorry.

Fiducia's four-phased approach highlights key necessities of QA tools of international companies in China. These prerequisites for high-quality products and procedures include:

Pro-active protection

It isn't really important who eventually gets the blame for the tainted toys. What is important is for companies to pro-actively make sure they have proper QA instruments in place and their supplier relationships allow for a mutually beneficial cooperation. In the long run this will prove much more valuable than squeezing some extra pennys out of the Chinese suppliers. Because in the end, it really is that simple: good quality has its price.

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