Thursday, September 28, 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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All the quality processes mentioned above essentially show proven ways to achieve that goal. Most of these, however, are regimental. One must inculcate quality as a culture and a way of life, not limited to just the production work in the confines of a factory.

I have found that SMEs everywhere in Asia, including India, have several definitions for their quality goals, depending on how high up in the sky they choose to be. At the very least, it is about meeting customers’ specifications. The better objective is to give customers a product that meets their need and continued efforts to improve processes. Some SME manufacturers feel that quality needs to be good enough to ensure that customers come back and products do not.

Unfortunately, most SMEs in India, China and other low-cost Asian countries, are still at the base level. For them, producing a quality product means complying with rules imposed by a customer. With that mindset, higher quality means extra inspectors for quality policing. They complain that it costs more money. One Chinese SME said, “If customers use statistical quality-control standards based on acceptable quality level (AQL) limits, or if buyers set a tolerance tighter than what is usually considered normal for general consumer goods, they will raise the price”.

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This mindset is reactive and not proactive. The manufacturer here does not wish to take any initiative to improve the design and production process but simply tighten the in-company inspection of quality.

I have observed that Chinese SMEs, like in India, consider quality and price to be tightly-linked. One conscious of quality must refuse to produce low-quality products, as happens in Germany or Japan. I find that trader importers too focus on low cost. They too get lured by nice samples that they see or receive from China and by their low price, not realising that sample quality is not indicative of mass production quality, and many, eventually, regret receiving products in bulk that are not up to the standard of the sample.

During my SME study in China, I found that Chinese do not like Indian trader importers. There is a cultural disconnect. Chinese wonder how anyone can demand high quality and also pay a low price. If the price is low, quality should be expected to be low, they say.

The problem is, Chinese SME suppliers, in a vast majority, are incapable of illustrating what quality standard they follow. Any reputed company that cares for its quality reputation will refuse business than dilute its benchmark quality. But, most Chinese suppliers are willing to accommodate such customers, who are willing to accept cheap goods. It is common in China for manufacturers to explain the difference for several pricing levels.

Let me, for a moment, move away from SMEs and talk about the concept of quality in the new business paradigm. A lot of us are not aware that iPhone 4 had several problems and Apple was aware of those. Yet, they released that version to avoid delaying the launch. They knew that they might have to replace some iPhones for free. It was considered the least-costly solution to their company. For them, the problem was known but they were sure that only a minority will detect it. In fact, free replacement for a few even raised the value of the company in the eyes of the customers. They knew that problems were minor and acceptable to risk the release.

The same thing is largely true of many software products, classically, Microsoft’s Window versions. This probably happens in other markets too because manufacturing is now controlled by businessmen with MBAs, rather than technologists like in Germany or Japan. Money has become a centre-piece, not quality. Companies have now become commodities for corporate growth.

Getting quality goods from China
One of the biggest barriers in China is language. Chinese SME suppliers do not speak or understand English and their business perceptions too are different. I, certainly, therefore believe that pre-shipment inspections are important to secure quality from China. That is why, in 2003, I set up a company in China to help ourselves and other friends’ world over to find the right sources and get assurance that we could get quality goods.

In order to secure on-time delivery of quality goods from Chinese suppliers, you will need to consider three areas.

1. Your supplier needs to be a genuine manufacturer. Many Chinese manufacturers found on the Internet are just catalogue/website companies. You can never get quality from a Chinese supplier who is not properly equipped to manufacture products; such as, the right test and production equipment, necessary skills and experience. He also should be willing to cooperate with you on regular improvements.

2. You need a local arm to work upstream to further reduce the risk of getting below-standard goods, instead of just filtering these at the end of the process. Local check is necessary even though quality remains the responsibility of the supplier. One must go deeper and dig in the details of what actions the supplier has implemented to fulfil the desired quality. Even after you have identified a good supplier, you will want to review the quality-control plan to make sure that all aspects are covered. One needs to be explicit in highlighting quality requirements and expectations. Many misunderstandings will be avoided during this step.

3. Pre-shipment inspection is always good insurance. There is no point in carrying out the inspection and stopping poor products just before shipment. What good it is for your business if you do not get the desired product at the right time? Discussing the inspection plan with the supplier is the best way to avoid this.

In my experience, there is no shortcut to the above-mentioned steps. Even if you are lucky enough to find a good supplier, you must follow these steps so that the process is faster and more straightforward.


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