U.S. Manufacturers’ Responsibility for Safety in the Global Supply Chain
Terrorists might want to attack our families, but naïve U.S. manufacturers seem to be beating them to it. People armed with a grudge and explosives are pretty scary, so we take every precaution allowed under the Constitution (cough) to keep them out of the United States. Yet, as supply chains have become more complex, we treat each of the growing number of potentially lethal product failures as if it is an isolated freak of production.
Now some product developers who have earned their stripes getting things made overseas are imploring other U.S. companies to become more responsible for their offshore operations. I know because these guys have implored me to blog on this topic. They spend a good piece of their lives “babysitting” products at Asian manufacturers, and they are raising a flag for the companies who still pretend it is ok to throw things over the wall and wait for a container of shrink-wrapped packages to show up.
Manufacturers: If your plan is to count on your industry’s equivalent of Toys-R-Us to test for lead in your baby dolls and magic slates, it’s time for a new plan. Best practices are changing. Soon you won’t be able to hide behind an overworked Asian entrepreneur who saves you money but can’t afford or appreciate your compelling need for product safety. You must become accountable for your supply chain.
While it’s impossible to anticipate everything, things can and do go wrong; let us count the ways.
My friend John, who’s been the VP of Ops for product companies and has tons of experience with different supply chain issues, summarized it nicely:
“Most of the products in question these days have a combination of the following: mechanical parts (plastic and metal), electronic components, packaging, and processing.
“At every single stage you have the possibility for bad things to happen. For most products these days, a contract manufacturer (CM) will pull together all the elements you need. Your company may or may not be involved in the direct sourcing of those components. Typically for the smaller stuff (screws, etc.) you are not, but you are for the larger (housings, CPU, etc.). Given that the oversight is necessarily diluted with each stage, the small items are the ones that often come back to bite you.
“…Simple things happen like a screw changes, losing the nice, rust-proof stainless steel one and getting a standard version. Really tough to tell at assembly, especially if it’s inside the device, but when it goes into service and starts rusting from the inside out… Needless to say you find out quickly.”
Like John, I have heard all kinds of stories that start with the screws and move on up. A former colleague told me about a cell phone he had worked on. The Chinese CM changed a connector to a board after the initial production testing, interfering with sound quality in the shipped product. The substitute connector had the “same” spec, but completely different performance. Depending on the level of interaction with the CM, this might have been a simple “buyout” component that was never reviewed once the spec was written, and consequently a classic opportunity for a supplier change.
Or the times when the white pigment is yellow. Or the spec’ed medical-grade plastic comes back non-medical grade. Or the handle and stitching of your client’s prototype bag turns out to be remarkably similar to those that Timbuk2 (not your client) uses as a brand signature. Or when parts are warping coming off the tool so the CM changes your high-priced industrial design to “go with” the warping.
Consumers: You can take heart in the fact that most of the activity is not intentional fraud on the part of the offshore vendor (however, Asian supply chains operate differently!) and that those U.S. companies who are less than diligent are not TRYING to kill you. (But I have read of some who are indeed willing to look the other way for a low cost.)
No amount of concerned VoIP seems to solve things; someone needs to get on a plane. So who can we trust to take those flights? We definitely need to ask this question before more children are exposed to lead, before more dogs and cats are “enriched” with melamine, and, for heaven’s sake, before the screw somebody forgot to check on turns out to hold together the hard drive that hosts our digital photo library! We can trust the companies who innately recognize or have learned through trial and error (OUCH!) that they can’t assume someone in a developing country has a clue about how we want our products put together. When did we forget that one of the reasons it costs less to go offshore is that there are basically no regulations on most of this stuff? Given the state of affairs in health care and nutrition in the developing world, why should we think that our manufactured food flavorings or pet kibble would – without oversight – somehow achieve a quality level consistent with U.S. expectations? Heck, the only reason U.S.-made food flavorings and pet kibble meet any standards is U.S. regulatory oversight! (Remember reading Upton Sinclair’s The Jungle in high school?)
What companies make the effort? I would be interested in hearing your experiences.
In the PD industry, one reason why we don’t let go of Apple – whether we like or dislike iPhone, whether we can or can’t live with Mac OS, whether we think batteries should be removable or systems non-proprietary – is the complete attention that it affords to every detail of a product’s design. Forget having to ask whether or not someone considered if the screw was the right screw. If it is a screw in an Apple product (do they have any of those?), then that screw was evaluated based on all other screws available, as well as many not-yet available of Apple’s own design.
At MindTribe, we want to be the development partner that helps achieve this higher level of attention to product detail for our clients. Realistically most clients haven’t cultivated the time, budget or focus that Apple has on each step of the development process, but there are plenty of companies – big and small – who are interested in using this approach to support their business strategies.
On a personal level, I don’t worry much about my brand name cell phone, HDTV, and digital video recorder. But a source of real concern is industries with the highest cost pressure and commoditization. I worry a lot about what we eat and what we feed the “double dogs,” especially since our schnauzer’s near-death experience on Hill’s Prescription Diet last spring. And I am startled when something like the new Ben & Jerry’s label surfaces. The label states the product’s milk and cream come from farms that don’t treat cows with artificial growth hormones – that’s cool – but it adds: “Not all the suppliers of our ingredients can promise that the milk they use comes from untreated cows.” They can’t say one way or another? Don’t they verify the source of those Cherry Garcia chocolate flakes? It sounds to me like they have decided not to check the tiny screws that can come back to bite you.
I just got out of a meeting with PCH International, a company that sources and manages manufacturing in China. The context of the discussion was intellectual property, but one comment from Liam Casey, PCH’s CEO, seemed just as relevant to product safety:
“China is the most entrepreneurial place on the planet. You have to manage it. If you own a brand and consumers, then they are your responsibility.”
I couldn’t have said it better.
My dad always says we shouldn’t make it in China.
I studied manufacturing at Cal Poly but I had a hard time getting and keeping jobs partly because I still do not have enough skills…
ms
Hey Mike:
I am sure your dad has the right intentions, but there is really no stopping the flow of manufacturing to China. MindTribe has worked with terrific manufacturers there. There are techniques being used in Asia that no one in the U.S. can do these days. (Maybe that’s a topic for another blog!) The key is making sure we have great communication and interaction to ensure the product turns out as we want it!
Good luck with your manufacturing career! How’s your Mandarin?
Kindly,
Lori H.
Interesting blog… I work as a design engineer and I know why not every screw in a new product design can be checked as thoroughly as one hopes. Its simple reality that we have only so much time and have to prioritize efforts.
That said, I think any engineer involved would dot every ‘i’ and cross every ‘t’ to protect against lead paint if it was a very real danger. I’m no doctor, but I’d guess that the government regulation is ultra-conservative and even the ‘bad’ toys are not really dangerous. Not to mention there still remains controversy over the real dangers posed by lead. Of course these rational arguments are lost on frightened parents with the media fanning the flames of fear.
Sidenote: If Americans don’t want their manufacturing jobs sent to China then they need to abolish their unions, work harder, and appreciate their jobs like the Chinese people.
As a designer and with manufacturing engineer background. I work with many oversea manufacturers. To be honest, it’s really those big US retailers forcing the makers to sell their products at a low price, which the factories are not making money at all. Therefore, some decided to cut corners, etc etc.
And in Europe, they have better inspection standards like Rohs. If big foot companies continue to mark down the pricing more problem will occur.
Hi Nigel:
It’s no joke, is it? Certain retailers’ insatiable pursuit of low cost goods definitely translates into tremendous pressure on factories to cut costs/corners. By the time the goods get to the retailer, though, it is too late to fix things. The U.S. companies responsible for outsourcing the manufacturing seem to be in the best position to make sure products meet standards.
It sounds as if you provide the kind of oversight that I was suggesting. I wasn’t talking about bringing manufacturing back to the U.S. I was talking about the Nigels we need to get it right. Clear standards and inspection are critical.
Kindly,
Lori H.
We can only protect jobs by abolishing unions? That’s a good one! Obviously they are unaware of the many recent strikes and labour actions in China.
Anyhow, if we want to protect North American manufacturing jobs, or small-town economies, the health of our pets and children and the environment, we must start valuing something other than lowest price, and we must stop thinking that we should own any piece of crap that flashes on your TV screen.
So, distressed by the weak US economy? That is because you are so cheap!
I didn’t argue that labor unions serve no purpose in China. I argued they serve no purpose in the United States. I’m sure we can agree that a safe working environment is a basic human right, and in this country the government provides that (thus rendering unions obsolete). In China, the government is still lagging our own in that regard and thus labor unions may serve to meet that need.
I will admit that I am not up-to-speed on labor unions in China. What I do know is that (generally speaking) the attitudes of the Chinese and American workers I’ve interacted with in my career are very different. Additionally, the unionized American workers take that difference to a whole new level.
Back to the point of this blog, I agree there is a general lack of Quality controls in China. It is the responsibility of the US company to oversee this and most US-based Quality systems rely in part on good operators. If you have zero confidence in your manual labor force, then you need a more robust Japanese-style Quality system. Most American manufacturers still don’t understand how these work however.
BUT, I still think we need to temper our anxiety by understanding that the media blows these things out of proportion and it’s not really that bad.