Working with Chinese suppliers
Last year I read a book called “Poorly Made in China”, by Paul Midler. It was recommended by a friend who also used to deal with Chinese suppliers for the company she was working for. The book is written by an American man who works as an intermediary between American customers and Chinese suppliers and tells his misfortunes with the Chinese companies he dealt with.
The book was very entertaining (if you have experience in the field you will be saying “that’s true!” every two pages) and made me realize that, as the saying goes, two in distress make sorrow less. My colleague and I were frequently discussing why we had so many problems with our suppliers, and often thought it was because of the cheap prices our customer forced us to obtain, and because the products we sourced were inexpensive, daily-use items. And that may have been part of the reason, but the truth is that other companies working with other kind of products were also encountering difficulties with their suppliers. So it was not that we were working with the worst suppliers ever, it was a common problem.
What kind of problems were we experiencing? Shipments that were regularly delayed, products that were not in accordance to our specifications, quality issues… In the book, Paul Midler talks about a shampoo which fragrance mysteriously changed after a few shipments and it was not what the customer had approved. When interrogated about it, the supplier replies: “But this aroma is also very good!”. I had a similar situation with wood pieces which were not the same colour approved by my customer. We got a whole shipment of this different colour. And when we told the supplier, his reply was: “Well, but it’s still wood, right?”. Ok, so next time I’ll pay for your shipment with Monopoly money. It’s still money, right?
Another time we had been looking for a specific metal part. It wasn’t a complicated thing to do, but it seems everyone else manufactured this product in exactly the opposite way as we did it, so we had problems finding a supplier who could do it. After several months and on the verge of desperation we finally received decent samples that we approved. We negotiated a price with the supplier, he agreed. When the order arrived, to our dismay we found that the metal color was not the same as the approved samples, and the surface treatment was poorly done. When we told the supplier, his first reaction was trying to deny everything: “What are you saying? They are exactly the same as the approved samples!”. After several phone arguments and sending pictures comparing the samples and the mass production, he finally acknowledged that they were not the same. “But if you need the mass production to be like the samples, then the price has to be higher”. If he had been in front of me I would have slapped him right away.
Then there were the suppliers which assured that they complied with all the international specifications, but if I needed a ROHS or REACH compliance certificate I would need to have the tests done myself. Well, how do they know their product can pass all the tests if they haven’t done the tests? “Our customer did it and told us we passed”, they would tell me. Right. And what about the ones that show fake pictures in their websites? I have seen pictures of spotlessly clean factories with shiny floors, only to arrive at the supplier’s premises and find a dirty workshop with floors and walls covered in black thick dust.
My Spanish colleague was always very concerned about a problem that is too common when working with Chinese suppliers: their products’ quality slowly diminishes over time, while they cut out corners in order to increase their benefits. As Paul Midler wrote in his book, “Factories did not see an attention to quality as something that would improve their business prospects, but merely as a barrier to increased profitability”. Amen to that.
I am sure not all Chinese suppliers are like this, but unfortunately many of them are. If you ever need to outsource anything from China be sure to understand the risks, send your orders well in advance in preparation for possible delays, keep in close contact with the supplier to ensure everything is clear, cross your fingers and hope for the best. And remember, if the price you agreed seems too cheap to be true, it probably is.
Wow. I heard the existence of horror stories with suppliers in China, but never to what extent!!! :O
It seems Japan runs in the opposite directionーsometimes I think they try too hard to meet their customers’ (often completely unreasonable) demands and it ends up affecting the employees negatively. :/
Oh yes, that would give for another blog post, the unreasonable demands from customers who want to get a Ferrari for the price of a second hand Skoda…
Eep, it’s like a lack of common sense or something! :o
Sipi, se la pela todo. Y no sólo a los chinos. Vietnam es especial también. Piensan distinto. A un occidental no se le hubiera ocurrido -a parte de los controles alimenticios, claro- sustituir la proteína de la leche por veneno para obtener más beneficio… Van muy lejos.
Hacen las cosas sin pensar, por si cuela. Si nadie lo descubre pues eso que se llevan ganado… es acojonante.
I know it is not the same but there is big news about tainted oil in Taiwan recently and many food products have been affected as well. The company was trying to cut corners and thus, creating the exact same situation you talk about. However, the sad part about this situation is that it is food which could harm people’s health.
Oh, are there food scandals in Taiwan as well? In China it is so common it is not news anymore! The melamine-tainted milk back in 2008 was the most famous one but we’ve also had expired buns repacked with new expiry dates, oil taken from the gutters, meat that glows in the dark, cadmium-filled rice, noodle factories where the noodles were all over the floor and the workers were walking on them… It is truly scary. Nothing is safe to eat in China.
Wow, sounds like you have enough experiences to write a book yourself! We have a friend here who works with suppliers (she’s Chinese) and she once described it as always having to put out fires.
Have you ever read the book Mr. China? That was also about working w/ suppliers in China — and the hijinks are both shocking and also incredibly funny (though they surely were not that funny to the author when he was experiencing them).
I don’t know that book! Thanks for the recommendation!
Putting out fires, that is a good description, haha. That was also what we were doing in our own factory in Suzhou the whole time… well not “we” as I don’t work there anymore!
I heard similar stories from few friends doing import work for their companies. Few, very few, suppliers are actually doing what they are supposed to do but the majority is doing all kind of wild things. Changing colors of the product or even the material itself. One example was that they needed wooden parts for certain cabinets they produced in Finland, suddenly the wooden parts were plastic, from one order to the next no the name of the supplier changed too! After contacting them my friend got the answer “plastic is much cheaper, it still fits, doesn’t it?” Apparently the company suddenly started to specialize in plastic fittings rather than wood as before…
Hahaha the worst part is that I’m not even surprised to hear things like that…
Here in Australia, some big companies have had to recall poorly made home electrical wiring imported from China. Tests have shown that the covering can degrade after 5 years or so and causing serious electrical issues and potential fatal accidents.
We have a saying in Spanish: “Cheap things end up being expensive”. But some Western companies think China and other Asian countries are the hen that lays golden eggs… for the price of normal eggs.
I’ve been meaning to read that book…
It is very entertaining! Actually, I bought it in Hong Kong.
I’m reading it right now and while I don’t work with Chinese suppliers it made me understand daily life in China. Even better !
For example they don’t reward repeat business. They entice you with cheap price than slightly increase price overtime when they have your business (because it’s an hassle to change). I constantly have to take time to look for new shop. I’m not looking for cheap, just good items for a fair price (I’m not looking for the Chinese price but please don’t try to pull the 10x tourist price either!) and I will come back. They just don’t care if you come back or not. Oh well I learned a long time ago that what is logic in one country is totally not in another so I’ve adapted in each and everyone (not always easy!)
That’s very true! Suppliers do that, because they know it’s such a hassle (mafan!) to look for a new supplier.
I got so tired of haggling after a couple of years in China that I only go to stores with fixed prices. For example clothes, I never go to the tailor or cheap markets anymore, I just go to H&M, Gap or whatever. Arguing over every single price makes me exhausted.
It is easier now because we do gave H&M, Gap, Uniqlo, etc. But it wasn’t the case when we fist arrived in Beijing. I still remember when Zara opened at The Place in Beijing we were almost going every day behore the opening day just to laje sure it wouldn’t disappear and it was a torture bc they kept pushing the date.
IF i really need to go to the markets, i set myself a price and stick to it (i usualky ask ly friends what’s the on going price) and walk away. I don’t want to spend 30 minutes just to save 20 kuai… Not wirth my time.
I guess when it’s on suppliers level, you have to play the (dirty) game.
Oooh I was also in BJ when the first Zara opened! Back then I was a poor student though so I was mostly going to the clothes markets close to the zoo and in Wudaokou :D
The clothes market near the zoo has been closed and transfer out of town (they do that with most wholesale market. Same with the kitchen/dishes matket next to the big Fruit & Veggies market). There are even rumors that they want to close Yashow. Where will all the tourists buy the Guchi, Luis Wuiton and Channel stuff ;-)