Relief for China's Quality Headaches
When sourcing from China, don't assume that quality issues will take care of themselves. You need to take a proactive stance in setting expectations and managing the process.
By Judy Huang and Mi Nguyen -- Supply Chain Management Review, 11/1/2009
China's abundant and low-wage labor supply of more 800 million workers has allowed the country to become the world's factory base. Sourcing in China has become one of the most effective practices for manufacturers around the world to increase profit margin and stay competitive by cutting production cost. However, the quality of products made in China has always been a recurring concern for U.S. purchasers and importers.
Let's look at just one example—stainless steel. Chinese and U.S. manufacturers may not share the same understanding of certain steel grades. Unknown to many, the Chinese have their own version of 200 series stainless steel, which has much lower portion of nickel and chromium than U.S standards. Chinese 201 grade stainless steel is close to U.S 430 grade, while Chinese 202 grade is close to U.S 201 grade. Despite the fact that the contract specifies use of a certain grade of stainless steel, the U.S. manufacturer may not end up being able to use the whole shipment because of low quality. Further, when dealing with Chinese stainless steel manufacturers, don't assume that the product will never rust. Stainless steel sourced from an irresponsible supplier may rust over time. To cut costs, some suppliers have been known to cut back the nickel and chromium portion by 3 to 5 percent.
Yet without sufficient knowledge of the process and testing of the material, buyers effectively close their eyes to potential problems with products ordered or components made in China.
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