It is no secret that China is the global industrial superpower. From houseware to electronics, the country has come to represent mass manufacturing and economic expansion. That does not, however, guarantee their product quality. To produce goods and consistently maintain international quality level, China needs to do much more to retain its supremacy in the global market.
There exists a lot of scope for improvement as far as quality management in production which is concerned. The management of Chinese companies needs to understand that unless they make a substantial effort to maintain their quality, some of the other neighbouring countries may soon replace the position of China.
In this post, we discuss the hindrances that Chinese companies face in managing their product quality.
1. Poor communication
Two conflicting cultural views cause poor communication:
- Buyers often withhold clear needs and product details out of fear of copying.
- Suppliers, on the other hand, fail to request sufficient information, potentially lacking the necessary capabilities for success.
Chinese suppliers often begin by creating a sample of the product. If the buyer approves the sample, the supplier will aim to replicate it in mass production. However, if buyers have specific market regulations, quality standards, or functionality requirements that are not clearly communicated, the final product might not meet their expectations.
In Chinese business culture, there is no strong concept of duty of notification, so suppliers may not point out potential issues with the product, prioritizing immediate profit over long-term satisfaction. Conversely, buyers who don’t fully disclose their requirements also fail in their duty to clearly communicate what is needed.
2. Historical context and evolution
To understand the issues related to quality management in production, one must understand China’s historical background. China started its reform process at the end of the twentieth century. This shift accelerated urbanization and industrialization, making China the world leader in manufacturing.
Prioritizing production scaling over quality control was done in order to satisfy the enormous demand. Early in the new millennium, the focus shifted to raising product quality in order to compete in the international market. Despite this progress, the legacy of rapid expansion and the need for continuous improvement in quality management systems remain prominent challenges.
3. Most supplier won’t self-report quality issues without diligence
Expecting Chinese suppliers to notify you of issues before shipping without your own checks often leads to quality problems. Suppliers typically prioritize their bottom line and may avoid delaying shipments over uncommunicated issues, even if it results in products that fall short of your expectations.
4. Lack of power separation
Even if you agree on specific quality measures with a supplier’s quality staff, these decisions can be overridden by higher management if deemed too costly, often without informing you.
This issue reflects a broader cultural pattern in China, where centralized decision-making is common, with strong leaders making final calls. This lack of power separation can impact factory audits, as effective auditors need to be skilled at identifying problems without direct communication.
Inexperienced auditors may merely perform a checklist review, focusing on certifications like ISO 9001 rather than assessing real conditions. Conversely, experienced auditors can discern issues independently, spotting discrepancies even if the factory owner exerts absolute control.
Many companies rely on basic due diligence, often focusing on paperwork and tick-box checks due to common practices in China. While initial quick-look evaluations can help filter out unsuitable suppliers by assessing their organization, factory conditions, equipment, and capabilities, more thorough audits are essential.
These comprehensive audits, which cover quality, finance, and other aspects, can be more costly but are necessary for ensuring compliance and preventing issues. Budgeting for these detailed evaluations is essential.
From the beginning, your supplier should be willing to provide key sub-supplier information, as these sub-suppliers also need to be audited to ensure their components meet your requirements. Ultimately, the cost of poor quality will far exceed the expense of conducting thorough audits throughout your Chinese supply chain.
5. Lack of risk awareness and action
Chinese suppliers are primarily motivated to produce products rather than to alert you about potential risks. The relationship is often transactional: “You pay me, I make the products, and ship them to you.” They typically lack interest in analysing, detecting, rating, prioritizing, and mitigating risks.
Due to a cultural emphasis on deference to the factory boss or leader, who makes all decisions, questioning and addressing potential issues is not a common practice. Consequently, suppliers may avoid identifying or addressing problems, focusing instead on fulfilling orders as per the agreement.
Suppose the factory boss does not prioritize a structured production process with mechanisms for halting production when issues arise and for verification and validation, instead focusing on chasing payments and attracting new customers. In that case, subordinates are unlikely to make these critical decisions on their behalf.
Without the authority to stop production or escalate issues to management, employees cannot effectively address quality problems. A factory lacking a functioning quality system is evident if operators, who are often paid per piece, have no incentive to halt production and resolve issues.
While ISO 9001 calls for shared accountability for quality, piece-rate pay structures can undermine this by discouraging employees from stopping production to fix problems.
6. Scale and complexity of production
China has, over the years, created a huge capacity for producing goods, and as a result, production volume is very high, which is why, due to various complexities, managing quality remains a big challenge.
Today, China produces a diverse range of products, from consumable goods to high-tech electronics, in the same production line. Managing quality across such diverse sectors presents inherent difficulties:
a. Diverse manufacturing processes - Various industries employ distinct production procedures, and each has unique requirements for quality control. For example, the standards for quality in the production of textiles and semiconductors are very different. Putting into effect standardized quality management procedures that can be adjusted to meet these different needs is the difficult part.
b. Supply chain integration - The manufacturing industry in China is closely linked to international supply chains. Raw materials and components are frequently sourced from multiple vendors, which makes quality control more difficult. Because of the size and complexity of processes, it can be difficult to ensure that every component satisfies quality standards prior to integration into the finished product without strong systems and coordination.
7. Regulatory and compliance issues
Regulatory and compliance challenges are central to quality management in China. The regulatory environment has evolved significantly, but issues still persist:
a. Fragmented regulations - China has an inconsistent and disjointed regulatory system for quality control. Standards and enforcement methods may differ between different sectors and geographical areas. This fragmentation can lead to confusion and inconsistencies in quality management practices across different areas and sectors.
b. Enforcement and compliance - Enforcement of existing regulations is not always uniform. Certain manufacturers can put cost reductions ahead of compliance, which could result in problems with quality. The industry's size can make it difficult to ensure strict adherence to quality standards without strong oversight and a dedication to enforcement.
8. Cultural and organizational factors
Cultural and organizational factors play a significant role in quality management in China. These factors influence how quality is perceived and managed within organizations:
a. Cost-centric culture - Cost cutting is frequently prioritized, sometimes to the detriment of quality. This cost-centric strategy may result in procedures that put cutting production costs ahead of putting strict quality control systems in place. A cultural shift that emphasizes quality as a crucial element of corporate success is necessary to change this way of thinking.
b. Management practices - Traditional management practices in China may not always align with modern quality management principles. For example, hierarchical decision-making procedures may impede prompt resolution of quality-related problems.
Organizational culture must change in order to implement more flexible and participative management techniques, which can enhance quality outcomes.
9. Technological challenges
China's quality management has both opportunities and challenges from technological improvements. Technology can improve quality control, but it also brings with it new challenges:
a. Integration of advanced technologies - By incorporating the latest technology for quality management in production, such as AI and IoT, can surely improve the situation. However, to implement all these new technologies, substantial investment is needed in hardware/software costs and training of the workers, as these need a special skill. Small or medium-sized companies may not be able to afford to make such a big investment in using these latest technologies and taking benefits.
b. Cybersecurity and data integrity - Data integrity and cybersecurity concerns are growing in importance as manufacturing processes become more digitalized. It is critical to defend critical quality control data against online attacks. A breach or data loss could undermine quality management efforts and lead to significant operational disruptions.
10. Training and skill development
Skilled employees with the necessary training to establish and uphold quality standards are essential for effective quality management. There are a number of issues with training and skill development in China:
a. Skill gaps - In the workforce, there may be notable skill gaps, especially in the more specialized areas of quality management. Programs for continuous training and development are needed to close these gaps. Businesses need to make investments in workforce development to make sure that workers have the skills needed to maintain standards of quality.
b. Standardization of training - Standardizing quality management training across different regions and industries can be challenging. Variations in training programs and quality management practices can lead to inconsistencies in quality control. Developing a cohesive training framework that aligns with international standards can help address these issues.
11. Consumer expectations and market pressures
Consumer expectations and market pressures exert a significant influence on quality management practices:
a. Rising consumer expectations - The Chinese consumer base is growing more discriminating, which is driving up demand for premium goods. A very strict quality management in production is therefore required to meet all these expectations. Manufacturers have to be more customer-oriented and accommodate the requirements of their customers so that they can adhere to the strict quality control system and yet remain competitive.
b. Global market pressures - For companies exporting products from China, meeting international quality standards is crucial. Global market pressures can drive improvements in quality management practices. However, it can be difficult to ensure conformity with a variety of international standards, especially for smaller businesses.
12. Environmental and social responsibility
Quality management is increasingly intertwined with environmental and social responsibility:
a. Environmental impact - Consumers these days demand sustainable goods to save the environment. To manage both quality issues and environmental impact often remains a challenge.
b. Social responsibility - It can be difficult to address social responsibility issues, especially in big and diversified supply chains.
13. Strategies for improvement
Addressing the challenges of quality management in China requires a multifaceted approach:
a. Strengthening regulatory frameworks - Quality management can be improved through strengthening the legal framework and guaranteeing uniform enforcement. Manufacturers can more easily manage compliance needs by streamlining regulations and increasing transparency.
b. Investing in technology and training - Enhancing quality management requires spending on worker training and cutting-edge technologies. While focused training programs can fill skill gaps, embracing automation, data analytics, and other technologies can improve quality control procedures.
c. Fostering a quality-centric culture - Improvements can be substantial if a culture that prioritizes quality as a crucial factor in success is fostered. The emphasis can be shifted from cost reduction to quality enhancement by supporting management practices that prioritize quality and implementing global best practices.
d. Enhancing supply chain management - Enhancing supply chain management procedures can help with quality control issues. In order to guarantee that raw materials and components fulfil quality standards, it can be helpful to implement rigorous processes for supplier evaluation and monitoring.
Conclusion
The production industry in China has a complex and diverse problem in quality management in production, which is influenced by historical, cultural, technological, and regulatory variables. Even if there has been a lot of development, there are still many obstacles to overcome and quality management procedures to get better.
China can maintain its leadership in global manufacturing and meet changing worldwide market demands by investing in technology, training, regulatory changes, and cultivating a quality-oriented culture.
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