Sourcing Restrictions- No China No India Castings 7

[Jumanji1]

Hi,
I come across specifications on large projects from "reputed" Global oil companies with valve casting sourcing restrictions stating No China, No India. However none of them seem to establish what is the reason for this restriction. What measures could be adapted to stop these restrictive practices?

 

[MJCronin]

The force of international law and consequential damages stops at the borders.

If a product is purchased from an international source and it fails, costing lives and millions of dollars there is no reasonable recourse for the purchaser. The lawsuit can be held up in international courts (read China and India)for decades. The seller is only responsible for the original contract price.

The seller, as we both know, has usually evaporated by this time.....

For some heavy industrial components, such as forgings and castings, failure is immediate and devastating. These types of components are more difficult to inspect once delivered from the originating country

However, if the buyer and seller are in the same country, consequential damages can be sought and collected.

This failure to meet international quality standards has legal teeth in the USA, Canada and the EU.

I don't believe that anyone can consider these restrictive practices without studying the history.

In my opinion, this is more of a case of "once bitten, twice shy"......

MJCronin
Sr. Process Engineer

 

[Jumanji1]

Hi MJCronin
Thanks for your inputs. On the point about compliance to international standards, there are several foundries in China / India that comply to all international standards, certified by international agencies like Lloyds, CRN, TUV etc.. have all the necesary ISO certs (ISO 9001) and are probably more modern compared to several NA, European foundries. Also if the concern is purely legal then why not NO REST OF WORLD (other than NA, Europe, why not No Australia, No Middle East, NO LA) and why just India & China? These restrictive practices seems to be paranoia around China / India castings and not based on credible evidence / reasons. As an Engineer I am concerned with such arbitary clause. Not sure if this is a professional way of managing these concerns.

Jumanji1

 

[jwhit]

An engineer I know was in China not too long ago auditing Chinese suppliers Quality Systems. It was a nightmare according to him, with violation after violation of their own documented system and no clue as to what any of the applicable codes actually require. Procedures didn't address the essential variables and where they did, they weren't being followed. Responsible individuals also disappeared when it was time to visit their departments. Additionally, there are reports of at least a few companies over there that represent themselves as having this qualification or that qualification, however, the qualifications only exist in the minds of company management.
Personal experience with off shore sources includes having to deal with a part which was to be made in CF8M (Cast 316), there were brittle failures during installation and the investigation showed that the material was actually a ferritic stainless steel similar to CB-30.
Would I want the liability of dealing with suppliers like that? No way.

 

[DekDee]

jumanji1,
As mjcronin has stated "once bitten, twice shy" is applicable.
Both China and India have been guilty of supplying poor quality materials in the past.
As a result they have poor "reputations" when it comes to supplying quality items.
However, I agree totally with you regarding "some" manufacturers - they are putting out products equivalent to anywhere in the world (I can only speak for China where I have been involved in auditing various companies).
Regaining "reputations" doesn't happen overnight - once it is proven that quality products are being produced then the purchasing requirements will be relaxed. (IMHO)

In addition, if you want quality you have to pay for it and maybe specifications are written to stop the purchasing department buying the cheapest items they can find ????
Cheers,
DD

 

[KENAT]

With regard to the legal protections issue, MJCronins list is not exhaustive and there are probably other countries were there are appropriate legal protections in place I suspect Australia for instance may be one. Also many of the countries without compatible legal systems may not have the kind of industrial base to be large scale supplier of such items - where as China & India do.

More cynically, ISO and similar certifications are often over rated. Firstly if often just means you have a documented proces that 'says what you are going to do' and have some system to 'verify that you did it' doesn't necessarily directly imply reliably high quality out put. Secondly, the audit system itself is often smoke and mirrors. It's not that hard to fool an auditor. (Although perhaps ironically from personal experience it can be hard to get them to change their mind when they misunderstand something and claim a non compliance where there isn't one.)

So the situation is arguably unfair to any genuinely good suppliers in those countries, however the risk to safety and the oil companies bottom line is probably not perceived to be justified by the potentially lower cost etc.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[MJCronin]

This general issue has been discussed before....

http://www.eng-tips.com/viewthread.cfm?qid=194913

MJCronin
Sr. Process Engineer

 

[Jumanji1]

I hoped that this being an Engineering forum there would be rationale, credible discussion on sourcing restriction. Sorry this has turned out to be a political discussion. The reasons seems to be news articles completely unrelated to materials/mechanical equipment's. As far as the inspection and approval of foundries are concerned these are done by 'Western' companies such as Lloyd's, TUV. The cynicism seems to question the reputation of these companies. These restrictions are unilateral based on unfounded, unsupported reasons which are akin to trade barriers and restrictive practices.
Thankyou for your inputs so far.

 

[ewh]

The responses given so far aren't so much polical as a realistic response to the situation as it exists today.
Example: A (huge) company that I had worked for sourced a large welded assembly (a bit larger in size than a boxcar) to China.
The item arrived and it was found that some of the welds were painted over putty. I do not know the history of this Chinese company's quality proceedures or how they were deemed qualified but as noted above, "once bitten twice shy". News articles, restrictive practices and trade barriers had nothing to do with the quality of goods received.

“Know the rules well, so you can break them effectively.”
-Dalai Lama XIV

 

[LittleInch]

Jumanji,

The real problem is that the issue essentially revolves around "quality", which is an impossible term to really apply rational credible numbers or calculations to. I think as has been said before on other posts and above is that certain things, casting of which are one, are sometimes very difficult to inspect or check prior to final hydro test which is where any faults would hopefully be found. By then nearly 2/3 of the schedule for the valves, which are often a critical time line item, will have gone and hence huge delay or costs ensue. Are good high quality manufacturers regarded the same - Yes I'm afraid they are, but until a long list of high quality items are established then it is not a fight you can win.

Clearly whoever the companies are, have their reasons, but they have that right and many are now very risk averse, especially for environmental damage and any failure of a component which causes damage or injures someone is a very big issue. As many of these companies work world wide, they can gather a lot of data about root cause of incidents and near misses, operational data etc and have decided that the lower cost of items such as valve castings is not worth the higher risk. Wait 5 years and it may go away.

My motto: Learn something new every day

Also: There's usually a good reason why everyone does it that way

 

[EdStainless]

1. Third party inspections do not verify the quality of the material, they only verify that the paperwork is consistent. If everyone is telling the same lie then it will get approved regardless of what was actually done. This is the case in all countries.
2. We were seeking a supplier in China. We audited and inspected 10 facilities. We placed orders with three and witnessed the production of the trial orders. We approved one supplier. Even with us there many of the documented procedures were not followed. And information was recorded that was never actually measured.

It is largely a cultural (work place, not national) issue. When failure to comply with codes, standards, and procedures costs peoples jobs and personal reputations then there will be conformance. As of today in many firms in many countries this is not the case. There is no repercussion for failure, and in some cases the worker is discouraged from doing the job right since it costs more.

= = = = = = = = = = = = = = = = = = = =
Plymouth Tube

 

[gtaw]

When you pay for crap, why should one be surprised when crap arrives.

China has a well deserved reputation for producing crap.

Best regards - Al

 

[BigInch]

It's not political at all. It's called "experience". It's exactly the same reason why no custom's inspector allows any shipment from Colombia and certain other countries to go by unexamined. I think you're relatively lucky that your restriction only applies to castings.

Learn from the mistakes of others. You don't have time to make them all yourself.

 

[loki3000]

When you pay for crap, why should one be surprised when crap arrives.

China has a well deserved reputation for producing crap.
india more so. both esp. if you only choose on the lowest price.

i know of a local pneumatics producer that outsources castings to south korea.

 

[bcd]

I find it funny when Chinese and India customers write "no Chinese or India castings" into their own specifications. They do not even trust themselves. My experience is that it is even harder to convince these customers of the quality of castings from thier own countries.

I do agree that there are some excellent sources of top quality material available from these regions. But the purchaser must do extra work to ensure they get it. If you simply purchase material from China and India based on lowest price and an ISO-9000 certificate, you are going to have problems.


It is really the same problem everywhere. Contracts using only the lowest bidder process inherently suffer delays and quality problems at some point. Someone is going to take a short-cut in order to win the job with a lower price.

 

[MJCronin]

Remember, my point was, when you internationally source something expensive.... you must consider the legal consequenses if the item does not meet the quality standards agreed upon in the contract documents.

When you source from within your own country, you can sue for breech of contract and get relief, if the item is defective.


Not so much if the item is sourced from another country...!!!

MJCronin
Sr. Process Engineer

 

[gtaw]

Ask all those folks South of the Mason Dixon how it is going for those that have to replace all their Chinese dry wall in their homes.

Al

Best regards - Al

 

[jte]

Lest we forget: thread330-172967

Not sure what the follow-up on this incident was. I find it rather interesting that according to the first 9 January post in the thread

The Chinese Government has also banned Chinese made pipe for use in major power plant critical applications.

Would anybody contend that this is somehow an unfair / unprofessional / unethical ban? Is it not reasonable that independent companies would on occasion concur with the Chinese government when procuring critical equipment for their facilities?

Now to be fair, this incident was being discussed 7 years ago, but a stained reputation is difficult and time consuming to repair.

 

[bcd]

To MJCronin,

You are correct in that it is easier to sue someone wihtin your own country. However, in many cases like this, the foundry who you would sue due to breech of contract may have little to no value and could hardly pay reparations near to the value of the damage they caused. So they go bankrupt and out of business. Unfortunately, there are fewer and fewer foundries in regions where the legal system is effective and the foundries have sufficient value and insurance to cover the risk. Customers push hard for the made in China price, but they do not want the made in China material risk. The typical Purchasing vs Operations tug-of-war in a company. In my opinion, which is worth just that, the situation is not getting any better. Nor is it getting any worse. And there is little to no leverage being applied to force change from the established leagal systems.

 

[Refining1]

Reading through the chain of posts,it looks like a typical paranoia by West under the pretext of quality. Applying an arbitrary blanket ban on 'No China No India casting' is a very restrictive practice. Double standards as usual by so called 'legally mature' countries. Their policies do not even stand in their own courts. See below an article where WTO have thrown out a case against Indian steel imports to US. It is unfortunate that these issues do not get the media attention in west as much as a case against India or China gets. It is all 'brand' image and not a true representation of products out of China or India. I am not saying everything out of India or China is good but a simple statement as No China No India is not fair. Do evaluate Indian and Chinese products as you would do other brands. May be go further with visits to the factories until the quality department is satisfied with the final product, but saying all Chinese and Indian goods are poor quality, sorry to say this but absolute nonsense!

http://articles.economictimes.india...6917388_1_steel-imports-aisi-steel-businesses

US steel industry criticises WTO ruling favouring India

Double standards as usual!!