Par Omer Abdullah

Au lendemain des rappels récents des produits Chine-faits corrompus et toxiques, davantage qu'uns ont speculé que les fabricants qui ont externalisé des opérations de production là ne soient aucun doute repensant leurs stratégies d'approvisonnement et processus de contrôle de qualité, et, si une partie de, nous disent, `des' pandits que plus agressifs doivent être crus, même repensant leur présence continue là tout à fait. Cependant, selon les résultats d'un aperçu de propriété industrielle juste accompli par le cube futé, les pandits semblent être beaucoup erronés.

En fait, la majorité de fabricants examinés sont confiante leurs chaînes d'approvisionnements sont plus qu'en juste proportion bloquée pour assurer la sûreté de leurs produits. En effet, presque 80% de répondants (tous de qui étaient des fabricants qui ont actuellement fabriqué leurs produits en Chine) a signalé qu'ils n'ont senti aucun besoin de passer en revue leurs activités de chaîne d'approvisionnements à la suite des rappels bien-donnés de la publicité de jouet et de pâte dentifrice. De plus, ces fabricants globaux croient que les questions récentes de rappel, tandis que sérieuses, sont des aberrations et non symptomatiques d'encore plus de question fondamentale inhérente au sein de la fabrication chinoise. Ils semblent être sur la terre pleine, car Mattel lui-même a fait des excuses pour mettre au commencement le blâme sur ses fournisseurs chinois.

Le fait qui une majorité accablante de fabricants n'a pas jugé que compulsif pour passer en revue leurs chaînes d'approvisionnements est réfléchissant de la confiance remarquable, particulièrement à la lumière de l'attention de médias la question a reçu. Pour être sûr, bien que, ce ne soit pas de n'impliquer aucune sorte de satisfaction de la part de ces fabricants. Indeed, in our one-on-one discussions with the surveyed companies, respondents indicated that they would “be more cautious” about their supply chain activities, which suggests that while they feel they are structurally sound, they are mindfully vigilant.Among the 22% of respondents that did say they would review their supply chain activities, more than one-third said they would make changes to the supplier evaluation process during selection or they would assign a person to look over quality adherence at the supplier location. About 30% would send quality inspectors overseas to the production plants. This is noteworthy because these are not quick-fix solutions; these respondents are considering deploying significant resources to achieve greater product quality.

We were not surprised to see that none of the survey respondents indicated that they would stop outsourcing manufacturing altogether. Let’s face it – American consumers are bargain shoppers, and the big box retailers that clamor for their spending dollars are equally price sensitive. Consumer product companies are under constant competitive pressure to bring their wholesale costs down so that retailers can hit their target retail prices without cutting into their own margins.

In addition, almost all of the companies that outsourced to China indicated they would continue to do so, which if you really think about it, shouldn’t surprise anyone. After all, the underlying cause of many of these recalls has to do with inadequate product design specifications at the front end and improper oversight at the back end. Those shortcomings are not China-specific; they could happen anywhere. But if China is to continue to be the preferred source for production, how can we protect the supply chain from the breakdowns that have made consumers so fearful (at least temporarily) of the “Made in China” label?

A huge challenge is China’s rampant growth. One could argue that the demand for Chinese manufacturing has likely exceeded the supply of superior quality, reliable and competent sources. A consistently robust supply chain has been weakened by a multitude of opportunistic suppliers eager to meet even unreasonable cost expectations by any means necessary. For their part, many of the ‘outsourcerers’ i.e. those companies that subcontract to Chinese manufacturers, have done little to discourage this – if not by intent, certainly by implicit action. The pricing pressures they face are very real. Yet, competition among Chinese manufacturers for production contracts is intensely fierce – and western companies dealing with China know that, for the most part, if they lose one contract, there will always be another manufacturer waiting in the wings to take over. And so the cycle continues until we have the situation we went through this summer.

We would be remiss to suggest that western companies are without a sense of responsibility, though. Interestingly, survey respondents were very explicit that the onus was on them to ensure effective supply chain management and quality control. They feel that the U.S. government is doing everything reasonable within its power to improve the quality of outsourced products. The Chinese government, in their view, could do more, and by some possibly extreme measures, is at the moment trying. However, at the end of the day, it is the individual company’s responsibility to ensure safety and quality of the end product. (To illustrate the limitations of the regulatory approach, although the Consumer Product Safety Commission (CPSC) and General Administration of Quality Supervision (GAQS) of the U.S. and China, respectively, recently reached an agreement to boost the safeguards on Chinese-made toys, this is a mere sliver of the manufacturing universe.)

So how will they manage control? The majority (61%) of survey participants said that quality checks at multiple levels are their preferred strategy for managing quality control. It is worth noting that in Mattel’s situation, it was subcontracted suppliers who used paint from unauthorized suppliers that ultimately led to the recalls. Interestingly, while one would expect that better communication with vendors and more rigorous vendor selection and certification processes (throughout the value chain) would be foremost on manufacturers’ minds, these aspects of the supply chain management process were actually prioritized very low on the list of companies’ ‘quality strategies’.


So what does this all mean?
At the end of the day, there are probably a handful of truisms here that we can walk away with:- It is counterintuitive to suggest that global manufacturers are producing substandard goods in overseas locations simply to squeeze a tad more profitability out of the process. Recalls are simply too costly in terms of the bottom line, reputation management, and consumer trust for such a misguided strategy to work in the long run.
- Most companies (well, the good ones, anyway) accept that the buck has to stop with them. They understand that, at the end of the day, their a** is on the line and the only folks who will make sure that there are no quality issues in their supply chain is themselves.
- Outsourcing isn’t going away. Its critics can rail against the perils of outsourcing and the problems it creates, but the reality is that most of the goods we encounter in our everyday lives are made anywhere but the US. And most of it (gasp) works.
- China isn’t going away. If that sounds like an obvious statement, it is, and it should be thoughtfully considered in light of the outcry over the last few months. The reality is that China has a pool of talent and a cost structure that allow us to pay a heck of a lot less for products than we would have to otherwise. And the reality on main street is that we implicitly value this economy. And there is no reason we won’t continue to do so.
- (As for the manufacturers who operate in China, what are their alternatives? Sure there are other cost competitive locations – but who’s to say they wont encounter the same issue (perhaps even worse) in those locations?)As our survey respondents would agree, there are meaningful ways to safeguard against the likelihood of production-related safety risks, but manufacturers must be vigilant and proactive. Superior quality products come from superior supply chain management, which is most definitely a “do it yourself” job.Omer Abdullah, Managing Director The Smart Cube, Inc.