The American Society for Quality (ASQ) says that many of the quality problems which have resulted in product recalls are due to inadequate oversight by U.S. importers. "Companies are so used to dealing with suppliers in the U.S. or Europe that comply with their specifications that they aren't taking into account that the whole concept of quality systems is a radically new thing to many foreign suppliers in countries like China," says Randy Goodden, chair of ASQ's Product Safety & Liability Prevention Interest Group.
In addition to cultural differences and different business operating models, companies sourcing from developing economies are encountering an unfamiliar legal climate often providing no recourse for failure to uphold terms of a contract, document forgery or protection for intellectual property, according to Goodden.
"We tend to find lackadaisical attitudes from government-owned suppliers where management staff gets a paycheck regardless of performance," says William Barthold, chair of ASQ's Customer-Supplier Division, who recently returned from a sourcing study trip to China, where he found a major difference according to types of ownership. "But privately-held companies are the best bet as they are investing in their future with newer equipment and more process and controls." He adds that private companies with foreign management, such as Taiwanese owners who bring in their own managers and work styles, are the ideal combination right now in China.
ASQ takes the position that importing companies need to take more responsibility for their inadequate assessment of risks in dealing with foreign suppliers, insufficient supplier development activity and a lack of discipline in applying quality basics with suppliers. They suggest the following preventative measures:
1. Increased On-Site Monitoring. Companies that buy products from China and other countries absolutely have to be on the ground working directly with overseas suppliers. There has to be a presence inside the manufacturing plants and on the shipping end to ensure that everything is being made to specification and to apply pressure when problems arise.
2. Reinforce Discipline In Supplier Quality Basics. Importers need to pay closer attention to the wealth of knowledge available on the fundamentals of customer-supplier relations and guidelines for avoiding product liability issues. Visit http://www.asq.org/cs/index.html for more information.
3. Look Beyond Price to Relationship-Building. ASQ supply chain expert Grace Duffy notes that instead of focusing only on the cost savings of outsourcing to countries like China, importers need to do the work required to implement quality processes and build more long-term relationships with suppliers that will lead to fewer product issues and more repeat business and loyalty. "Unless companies stop cutting corners, we are going to continue seeing some very ugly import quality issues," Duffy says.
4. Raise Competency Level of Overseas Suppliers. U.S. companies purchasing overseas should offer some form of supplier development to provide a clear knowledge of the purchaser's expectations, an understanding of the purchasing company's culture and even assistance to the supplier in setting up a quality management system. Recent import safety scares demonstrate that there's not nearly enough of this happening right now.
ASQ will offer a series of seminars to manufacturers in China in late January. The "Improving Quality and Product Safety" seminars, which will take place in Shanghai and Hangzhou will enable Chinese suppliers to better understand what their customers are expecting in terms of quality. For more information, visit the http://www.asq.org/global/.