Saturday, June 3, 2023

Product Quality Perceptions of Chinese SMEs and the Best Option to Buy Quality Products from China

P.S. Deodhar is Life Fellow, IEEE, the USA

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I have 55 years of experience as a designer of electronic products for professional use. I have been manufacturing these with the best quality possible for our Indian and European customers. I have also been a buyer of components and equipment in bulk during my ten years with the government in Delhi as chairman of Electronics Commission and managing ET&T, central government’s trading company. Quality has been my prime concern, and I have managed to imbibe quality as a work culture of the organisations I have worked for and its deployment in production and customer service.

I have had a chance to take a close look at China’s SME sector when, in 2008, I travelled to China and visited 231 SME companies in seven urban production hubs in China, and personally interviewed them. This was part of a project for India-China Economic and Cultural Council to study the growth and success of China’s SME sector and identify reasons for their spectacular growth. During my visit, quality of Chinese products was the major aspect of the study.

What is quality
In the course of almost six decades in an engineering career, I found that manufacturers have varied perceptions about quality of what they deliver. Most of them relate to delivering quality that customers demand. Most, therefore think of quality as something that meets or exceeds customer’s expectations. Others think that, even in a more limited sense, quality means ‘meeting what customer will accept.’

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More conscious ones think of quality as delivering more than customers would want by making continuous improvements in their manufacturing and business processes. They anticipate what customers would want and work towards giving the best value for the price realised and add to the customer value.

Some define quality as doing the right thing, in a right way, with the right people. Some are more abstract, they believe that quality is about meeting or exceeding the expectations of clients, employees and the related community.

Workers in an electronics factory in Shenzhen, China (Image courtesy:
Workers in an electronics factory in Shenzhen, China (Image courtesy:

Then, of course, there is ISO certification that demands having in place the minimum level of quality systems, management processes and operational discipline. An ISO label becomes necessary to qualify as a supplier in India. Mid-size SMEs, who attend quality seminars, talk of Kaizen, Six Sigma, Taguchi, Quality Circles, TQM and other quality religions to evolve all-inclusive quality culture. In China’s SMEs, this is not very common, though.

In 1982, I was first exposed to the Chinese manufacturing sector when APLAB, of which I am a founding member, started exporting large quantities of test equipment like oscilloscopes to China. We were the only company in India to export electronic products to China.

Chinese manufacturing was in a mess as far as quality was concerned. Then, Deng Xiaoping dramatically changed the course of China’s industry via EPZs, as in Taiwan and South Korea. A huge number of western corporations moved their manufacturing to China since they could repatriate all their profits outside of China. Deng, thus, created a training ground for Chinese workers and engineers. They got trained to produce goods with high quality standards as demanded by European and American multinationals (MNCs). Entire China, in the process, got trained in quality engineering work using modern processes.

The smart Chinese personnel soon started leaving MNCs to start something of their own or become vendors of MNCs. Modern China learnt quality from export production, which became its quality culture. When work was outsourced to SMEs by these foreign firms, they taught their vendors the right processes, demanding quality.

Then, in late-1990s, these SMEs started exporting to other countries. That is when quality took its toll. The world rushed to buy from China and these trader importers taught Chinese to reduce the quality for a cheaper price. China today has a large number of SMEs that produce products with high quality, but it also has many others mushrooming to offer low-priced products demanded by trader importers.

Delivering quality essentially demands good designs that meet assured or claimed performance, expertise in technologies involved, knowledge of choosing the right materials, control over processes and skills to implement these with diligence and sincerity. The core of this is pride of the team involved in design and workmanship. It demands creating and motivating mutually-supportive teams to produce and deliver a product that gives an organisation a sense of pride.

Before meeting customer needs, the organisation, however, needs to set even higher standards for the team than what the customers demand. The challenge is even more in doing so within target costs and prices. I often used to say to my team that we have to deliver champaign at the price of beer.



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