QUALITY AND LOW-COST SOURCING

It’s a matter of expertise, cultural understanding, and commitment.

In today’s global market, consumers expect companies to be cost-competitive, and more often than not, that means sourcing manufacturing from countries that offer lower labor and production costs. But is it possible to source from low cost countries without sacrificing quality?

In RL Hudson’s opinion, the answer is: Absolutely — as long as you choose the right supplier.

At RL Hudson, we’ve been working with manufacturers in China, in particular, for more than a decade. Yet regardless of the country, international sourcing is a complex endeavor. It requires specialized knowledge of government regulations, import/export and international
shipping rules, and communication. It requires proficiency in engineering, materials technology, rapid tooling, quality systems,and supply chain management. And it requires a commitment on the part of your supplier to invest in the infrastructure — people, processes and technology — necessary to ensure quality.

China Manufactueing Illustration At the most fundamental level, it also requires a deep understanding of the culture of the country in which the
manufacturing will occur. Without that understanding, it is virtually impossible to identify the potential risks to be
mitigated, or to build the strong, strategic relationships necessary for achieving success. In his recent article, Chinese Culture and Product Recalls, Dr. Benjamin Olshin, Director of S2R — Specialized Research + Reports, discussed the importance of cultural differences on quality. Referencing the Chinese expression, cha bu duo jiu hao le (so-so is good enough), he explains: “In greatly simplified terms, the Chinese are pragmatic and are less concerned with abstract principles — and those principles include manufacturing standards.” To the Chinese, Olshin explains, expediency can mean producing products as quickly and inexpensively as possible.
Pragmatically then, says Olshin, the negative conseconsequences of doing so simply don’t exist at the time, and can be dealt with later — if and when they do.

By understanding this single, but significant, cultural difference, one can also understand that without clearly defined processes, procedures and expectations, the end result is already in jeopardy. Equally important is enforcement, and the willingness of your supplier to invest in the necessary infrastructure to inspect and verify results.

Done well, the rewards of low cost country sourcing can far outweigh the risks. Not done well, just one recall can cost millions, or tarnish a company’s reputation for years to come.

The key is to make sure you’re working with the right supplier.

Solutions 4Q07

QUALITY AND LOW-COST SOURCING

It’s a matter of expertise, cultural understanding, and commitment.