Fake UK Plug 5

[hkmensing]

Dear All,

Late last year, on one of our products (a glue gun), we found (too late) that for production (in China) the factory changed the plug from the official one to a fake one. This meant a a lot of re-work (in the UK) for a lot of extra cost.
Has anyone any ideas on how we would be able to avoid this in the future?
We use our own QC people from China for checking but their skills don't go as far as to recognising fake plugs.
We are considering construction checks during production by licensed labs, but I'm hoping that there are also ways we can do something ourselves, apart from teaching the QC's about stuff like this.

Cheers,

GM

 

[IRstuff]

Seems like the choices are limited:

> Build a prototype or drawings with sufficient detail such that the production units match the prototype or the drawings

> Building a mating interface that the production units must be capable of operating from

> Get better QC guys

TTFN

 

[ScottyUK]

Choice four:

Stop building it in China. Build it in the UK where you are presumably selling it. Support our indigenous manufacturing base, the odd remaining fragment that we still have left. Nothing personal intended, but this sort of story fills me with a perverse sense of gratification after watching so much of our once world-leading industrial and manufacturing capacity vanish forever.

 

[RichLeimbach]

I agree with both IRStuff and Scotty. Obviously, the best thing would be to make the product where people are capable of realizing this kind of mistake quickly and the assembly workers are empowered enough to step up and correct the errors (I've seen that they tend to be too afraid to make noise about potential problems too many times, part of the culture I guess).
However, you can't realistically expect to make money on low-end products like glue guns in the US or UK, so I would suggest that you add a functional check for every assembled unit as part of your assembly process. It might cost a little more to add the extra sockets and sensors to check that the product works OK, but then you have a clear requirement for them to hit. Not sure if this would help your "fake plug" issue or not.
It is tougher when they use parts which are functional, but of lower quality than you spec. The only thing you can do there is a) have clear requirements b) be able to enforce them contractually (i.e. charge them for your rework) and c) change to a more honest or capable company if they fail to meet your requirements (even if the short-term cost is higher, you'll save in the long run).
We've gotten very poor results from the use of outside QC labs. You'll basically be pouring your money down the drain to rubber-stamp everything the factory does (just my experience). Hope this helps. I know what a pain this can be.

- Rich

 

[TwnB]

You need to attack the source of the problem. I have been living in Asia for 10 years and have spent many fortnight beating my head against the wall trying to get things like this resolved. The problem you have stems from purchasing. The purchasing dept. is usually beat up by management to lower costs. The purchasing people usually find suppliers with the lowest cost and biggest kick back since most purchasing people make a pittance. I have seen this first hand many times.

I have implemented procedures where the manufacturer must provide certs. from their suppliers with each shipment showing that the specification is being adhered to. We usually only certify one sub-supplier for critical components.

I agree with Rich that you need to enforce contractual agreements. Most of the time management will turn things around once they are hit in the pocketbook. I have found changing manufacturers in China, which I have done several times, usually results in new problems either technically or business wise.

Good luck!

 

[designchain]

Rich and TwnB are dead-on. Controlling an out-of-sight/out-of-mind supplier, or even internal division is a challenge. You must make sure they understand what it means when you specify a certain supplier for a certain component...it means they must not substitute. Make the consequences for them dire should that happen...contractually. Contract Manufacturers (and, in fact, any entity that buys parts for production) must be able to provide a "paper trail" showing where the materials came from - TwnB's "cert" process. If your own inspectors can't comprehend this, get ones that can and are empowered to shut down production.

Read the January 2004 Electronic Business magazine, page 41. Or go to our page on the subject:

http://www.designchainassociates.com/counterfeit.html

Mike

--
Mike Kirschner
Design Chain Associates, LLC

http://www.designchainassociates.com

 

[hkmensing]

Hello all,

Thx for the input. It's very helpful.
I've talked to the management about the use of cheap, cheaper, cheapest manufacturers, instead of focusing a bit more on reputability and quality, but the story is always the same: cheap, cheaper, cheapest!

We do ask for certification, but that does not help either. Furthermore, we've introduced penalties as well, and the factories know they have to pay (if and when they get caught), but also that is not always (as in most of the time) a deterrent.

They think extremely short-term. As long as they can get the products out, they think they're okay. Eventhough they know that if and when the customer rejects the lots they'll be paying for it and more.
For us the major problem is that it reflects badly on us.

Producing/buying the products in the west is not really an option because then the products would be so expensive that no one would buy.

Just yesterday I was in China visiting some factories.
I had one factory boss telling me that they are losing money on the deal (with us). I hear that same line 90% of the time. I think they're doing it because they hope to get some more money out us.
He also claimed that the manager (from the company I work for) had called and told him to inform us that we did not have to check rust on the stainless steel. Imagine my 'surprise' when I checked with the manager and found that she had not called at all.

Cheers,

GM

 

[OperaHouse]

Reminds me of some of my experiences in China. Industrial switches that had O rings that would swell up when in contact with oil. This was an EDM machine and the operator would always be touching oil. Manufacturer said our operators should wear white gloves. When you complain about fit and finish, they ask why, it will only be covered in grease ans dust in 6 months. They don't understand that people in ties buy machines and thy only understand what looks good. Had a factory president that gave us the ok to distribute a product only to have the deal kiled when the foreign owner found out.

Your best option is to have a quality "award" holdback for the end of the project. They need a carrot to perform. You negotiated out every penny you could get. And you deserved what you got.

 

[RichLeimbach]

Another 2 cents: Sounds like from your last post that the main problem is YOUR company, and not the Chinese ones. Always choosing the cheapest company regardless of quality, reputation, etc. will get you in trouble just as quickly with Western companies (who can also do some amazingly shoddy / disreputable work at times).
I think that in addition to the ideas put forth on how to improve the Chinese suppliers (which your management will probably end up trying to better deal in the near future anyway), you need to try to open your management's eyes to the real cost of the products you are buying. It is easy to lose all of that supposed savings in higher inventory levels, longer lead times, increased shipping and storage, more reworks, lost engineering time, customer complaints, returns, etc. Unfortunately, those costs are harder to track, "out of sight, out of mind". Maybe a quick study on what your last lot of "cheap" glue guns actually cost would open their eyes...

- Rich

 

[hkmensing]

Hi All,

I agree with you all.
BTW, it's not MY company. I just work here.

I already asked management several time to actually quantify projects. With this I mean, find out what we're buying, how much time each and every person has to spend on a project, how often we have to visit the factory, what the claims are, etc., etc. Regrettably, management thinks that this is not important. They believe the actual problem is with the QC inspectors who don't do a good job ensuring that we only get good products. Considering we use AQL inspections, it is unreasonable to put all the blame there. That is I guess the biggest fight I have in my job.

I do think we can improve quality control, and yes, the QC inspectors do need to improve, but over time, I will also slowly work on making management understand that the problem is a company problem where everyone has to improve. That will take time.
If management will believe me, I'll have a job for a long time , otherwise, I will be looking for something else .

Cheers,

GM

 

[designchain]

Management at your company clearly needs a little education (OK, a LOT of education) on how a contract manufacturer operates, what drives them (their "agenda&quot and why it might not be the same as your management's agenda and what to do about it, how to calculate actual cost of sales, and why expecting QC inspectors to solve the company's structural problems at the piece-part level is never going to work.

Maybe the QC inspectors need to improve or be trained differently or better, but it's not their problem. It's management's problem.

Mike

--
Mike Kirschner
Design Chain Associates, LLC

http://www.designchainassociates.com

 

[BrianG]

One possible way to focus your management's attention on their quality problem is that to be sold in the UK the product probably requires the appropriate CE mark.

Glue guns may well be covered by special directives, and I believe the Low Voltage Directive covers most electrical items which are mains powered anyway, so would cover the quality of the plug.

As they are responsible for selling the product in the EU it is their responsibility to ensure conformance for approvals testing, safety and quality. Failure to comply, or if the CE mark has been falsely applied, can result in the company management being personally prosecuted.

 

[hkmensing]

Hello again,

Yes, but my company does not falsify anything. And the product does have the CE mark. The factory just decided after the proper checks by a lab, that a fake plug would be cheaper, i.e. more profit.

Cheers,

GM

 

[ScottyUK]

Hi hkmensing,

I think what BrianG is suggesting is that your company, as the company which supplies the products to the UK (and EU)market, is liable for the accuracy of the CE and LVD certification even though your company may only be accepting the assertion from your subcontractor that the product meets the legislative requirements.

Given that your subcontractor substitutes fake parts into your product, what is the chance that the CE and LVD certification they provide is worth the ink it was printed with?

I'm sure Brian wasn't suggesting that your company knowingly forged CE and LVD markings, just that highlighting that they may be held accountable if their subcontractor has decided that it is acceptable to do this.

 

[BrianG]

Thanks ScottyUK, that's quite correct, I was not suggesting that the UK company was forging the markings. What I was trying to point out was that the management can't expect to get maximum profit margin by always insisting on using the cheapest subcontractors and then wash their hands of any responsibility if the subcontractor decides to cheat, or if things go wrong.
As in most things, you get what you pay for. The management should not be entirely surprised if the cheapest company turns out to be unethical and cuts corners once the first few batches have been made. Unless every single product is going to be minutely inspected - at great additional cost -you need a supplier you can trust.

 

[hkmensing]

ScottyUK and BrianG >>
I agree totally, I've told them the same things quite a few times, but as long as I can't convince 'em of that, it will remain my problem.
Luckily I enjoy my job and can deal pretty well with the daily problems (some people can be very, very rude), and believe in due time I can improve the situation.

Cheers,

GM

 

[designchain]

If telling them doesn't work, quantify it for them.

Mike

--
Mike Kirschner
Design Chain Associates, LLC

http://www.designchainassociates.com

 

[IRstuff]

In most, if not all, of the companies that I've worked for, one of the biggest problems is the lack of solid documentation, particularly in the arena of cost estimation.

Being in aerospace, we spend lots of effort in responding to requests for proposals with estimates of hours required to do particular tasks. BUT, after nearly 30 yrs, I've yet to see an organization be able to back up such estimates with historical data.

You can buck the trend but detailing and documenting the number of hours expended to fix the problem, train the QC guys, etc., as well as the basic cost of the repairing or replacing the faulty parts in addition to the potential liability, if any, that might have been incurred had comsumers been used the faulty devices and damaged equipment or had gotten hurt.

Since your management is so hung up on cost, you need to prove to them that their approach is LOSING MONEY and can LOSE EVEN MORE MONEY if the problem had not been rectified. BUT, you need to back up your assertions with solid data, particularly financial data. Once you can show them that their razor-thin margins are actually negative, you should get their attention.

TTFN

 

[TwnB]

Another two cents.

Every Chinese/Taiwanese company I have worked with (hundreds) want to improve their quality and increase their business. Chinese are usually in it for the long haul and do not give up easily. I have rarely seen a company in Asia go bankrupt. They simply do not know how to proceed (Of course there are som unscrupulous companies out there but that is what vendor selection process should weed out). They are constantly beat up on price and have to find ways to provide the right price while at the same time staying in business. Historically they have built cheap products where quality was a second thought. But with today's market you need good quality products in order to hold, at bay, the competition. The Chinese companies are starting to learn this.
I have personally spent 6 months at a time in a new suppliers factory trying to teach them the proper procedures and controls. Several posters above have mentioned training your own company on the hidden costs of bad quality. You also need to teach the supplier the same thing. I have found this is recieved very well by the suppliers as they do want to do a good job. It, unfortunately, takes time. If your company is serious about their business they will invest the time and effort. All sucessful companies go through the same process whether dealing with in-house or outside manufacturing.

I know this doesn't solve your current situation and I have been a little long winded but these are the facts as I see them from 20 years experience in the orient.

Again, good luck!

Brian Murray

 

[Pud]

Hi hkmensing and posters,

Interesting.....

But there's nothing new: Here's a quote from proto-economist John Ruskin (1819 - 1900) concerning Value:

"It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay to little, you sometimes lose everything, because everything you bought was incapable of doing the thing you bought it to do.
The Common Law of business balance prohibits paying little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better."

Easy eh?

Good luck on getting it sorted out!


H