Comments on: Monitoring Your Supplier http://calpolymbatrip.com/2008/china/monitoring-your-supplier/ The MBA Graduate Program at Cal Poly Thu, 08 Jan 2009 21:38:09 +0000 http://wordpress.org/?v=2.6.3 By: William Jencks http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5324 William Jencks Fri, 13 Jun 2008 07:22:28 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5324 Sustainability in China... It is such a hot and cold issue, no more like scalding and freezing. On one hand they have fully sustainable island cities (like Dongtan), on the other they have dirty child labor and the such. In our ethics class Dr. Carr asked us how western companies could really ensure that Chinese production was "up to par" with socially responsible principles. This article has some excellent suggestions for an answer to that question. I thought the advice to "arrive quietly the night before and talk to the locals" was very interesting, especially when told to compare that with answers from the production manager. Of course China will never be really fully sustainable and socially responsible until the market calls for such behavior, just as has happened in the U.S. with such a strong central government, why hasn't the omnipotent CCP demanded more sustainable behavior, like the EPA and other agencies in the west have begun to do? Sustainability in China… It is such a hot and cold issue, no more like scalding and freezing. On one hand they have fully sustainable island cities (like Dongtan), on the other they have dirty child labor and the such. In our ethics class Dr. Carr asked us how western companies could really ensure that Chinese production was “up to par” with socially responsible principles. This article has some excellent suggestions for an answer to that question. I thought the advice to “arrive quietly the night before and talk to the locals” was very interesting, especially when told to compare that with answers from the production manager. Of course China will never be really fully sustainable and socially responsible until the market calls for such behavior, just as has happened in the U.S. with such a strong central government, why hasn’t the omnipotent CCP demanded more sustainable behavior, like the EPA and other agencies in the west have begun to do?

]]> By: Steve Munio http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5314 Steve Munio Thu, 12 Jun 2008 22:17:25 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5314 In a course we took several months ago, we were fortunate enough to have a presentation with a businessman with tremendous first-hand experience in dealing with Chinese suppliers. He explained the extreme differences in culture and how they apply to following directions. The main advice he offered was the great importance in giving exact specifications and specifying that ANY, I repeat ANY changes must be authorized. The Chinese often feel that production direction is open to interpretation and will take it upon themselves to "optimize" the product for efficiency to better their margins. They do this innocently, often thinking that it is expected of them. The speaker stressed the importance of having a person abroad to monitor manufacturing, a person well versed in BOTH cultures so they may translate requirements effectively. In a course we took several months ago, we were fortunate enough to have a presentation with a businessman with tremendous first-hand experience in dealing with Chinese suppliers. He explained the extreme differences in culture and how they apply to following directions. The main advice he offered was the great importance in giving exact specifications and specifying that ANY, I repeat ANY changes must be authorized. The Chinese often feel that production direction is open to interpretation and will take it upon themselves to “optimize” the product for efficiency to better their margins. They do this innocently, often thinking that it is expected of them. The speaker stressed the importance of having a person abroad to monitor manufacturing, a person well versed in BOTH cultures so they may translate requirements effectively.

]]> By: David Dougherty http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5300 David Dougherty Thu, 12 Jun 2008 05:00:48 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5300 I agree with Eric, there are bad suppliers no matter what country you are conducting business in. The key issue in any manufacturing environment is creating a relationship with your supplier and making sure that you are on the same page in regards to the quality of your products, your lead times, and overall business goals. It is the job of the business to monitor and constantly maintain relationships with their suppliers, making sure that they understand your needs and as well as the value you hold in their business. I agree with Eric, there are bad suppliers no matter what country you are conducting business in. The key issue in any manufacturing environment is creating a relationship with your supplier and making sure that you are on the same page in regards to the quality of your products, your lead times, and overall business goals. It is the job of the business to monitor and constantly maintain relationships with their suppliers, making sure that they understand your needs and as well as the value you hold in their business.

]]> By: Naomi Guy http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5281 Naomi Guy Sun, 08 Jun 2008 15:58:22 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5281 I find it amazing that some Americans feel they can pay the Chinese factories scrap and still expect them to fulfill a high standard of working conditions. The Chinese are going to work in the conditions we pay for, which means high working conditions require a higher pay. Now enforcing this becomes a challenge. Chinese know they might work in awful conditions and will do so independent of the price the Americans will pay. Showing up the night before or even unannounced can be very eye opening. It is also important to due diligence before signing a contract. Ask the workers or other clients how their experiences have been. There are good factories out there, and they do treat they workers with respect and decent living conditions. They will be more expensive but the security and public opinion of the company are likely worth the extra wage. I find it amazing that some Americans feel they can pay the Chinese factories scrap and still expect them to fulfill a high standard of working conditions. The Chinese are going to work in the conditions we pay for, which means high working conditions require a higher pay. Now enforcing this becomes a challenge. Chinese know they might work in awful conditions and will do so independent of the price the Americans will pay. Showing up the night before or even unannounced can be very eye opening. It is also important to due diligence before signing a contract. Ask the workers or other clients how their experiences have been.

There are good factories out there, and they do treat they workers with respect and decent living conditions. They will be more expensive but the security and public opinion of the company are likely worth the extra wage.

]]> By: Eric Kvilhaug http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5279 Eric Kvilhaug Sun, 08 Jun 2008 02:08:03 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5279 When dealing with my personal business I have had many suppliers of different rankings. Some were better with respect to quality, some with customer service, so had neither and were shorted lived. The common factor is they were all US businesses. My experience is that there are more bad suppliers that good ones, and I would assume this goes for ALL countries. I do not hold China in bad regards for this, I think the bad rap comes more from miscommunication than irresolvable problems. Communication breakdown is so easy between two US companies, I can only image how easy problems can arise when dealing overseas. When dealing with my personal business I have had many suppliers of different rankings. Some were better with respect to quality, some with customer service, so had neither and were shorted lived. The common factor is they were all US businesses. My experience is that there are more bad suppliers that good ones, and I would assume this goes for ALL countries. I do not hold China in bad regards for this, I think the bad rap comes more from miscommunication than irresolvable problems. Communication breakdown is so easy between two US companies, I can only image how easy problems can arise when dealing overseas.

]]> By: Catriona Banks-Orosco http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5261 Catriona Banks-Orosco Tue, 03 Jun 2008 04:45:16 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5261 I was not surprised to see the article mention showing up in the factory town the night before an inspection to talk to the locals. Even if they are going to answer politely it lays a foundation. If it becomes customary to talk to the townspeople before a visit it seems in the long run they could feel comfortable talking about what is really happening in the factory. Visiting more than once per year would be necessary and I think it would take time to build those relationships, but they would be very valuable. It does not take that much effort to let people know you truly are interested in their well being. One of the challenges of trying to hold a company in China to higher standards by paying more is that there is no guarantee the additional funds will flow down to the workers and not just be pocketed by the boss. It is just a reminder to take the time to build your guanxi. I was not surprised to see the article mention showing up in the factory town the night before an inspection to talk to the locals. Even if they are going to answer politely it lays a foundation. If it becomes customary to talk to the townspeople before a visit it seems in the long run they could feel comfortable talking about what is really happening in the factory. Visiting more than once per year would be necessary and I think it would take time to build those relationships, but they would be very valuable. It does not take that much effort to let people know you truly are interested in their well being.

One of the challenges of trying to hold a company in China to higher standards by paying more is that there is no guarantee the additional funds will flow down to the workers and not just be pocketed by the boss. It is just a reminder to take the time to build your guanxi.

]]> By: Nick Miura http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5258 Nick Miura Mon, 02 Jun 2008 22:19:19 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5258 I was intrigued by the comment that in Chinese culture, if you don't know the answer to a question, you make something up to keep the conversation going. Though I agree this is a good way to keep a conversation going, and I have practiced it before, it makes you wonder how much of the information coming from suppliers/workers in China is accurate. Can you really trust anyone? Emphasis is placed on actually going to the supplier to check it out, but also one really must dig and explore and see the truth for themselves. What is the economic cost of doing this and what if you find practices that need to be changed? I was intrigued by the comment that in Chinese culture, if you don’t know the answer to a question, you make something up to keep the conversation going. Though I agree this is a good way to keep a conversation going, and I have practiced it before, it makes you wonder how much of the information coming from suppliers/workers in China is accurate. Can you really trust anyone? Emphasis is placed on actually going to the supplier to check it out, but also one really must dig and explore and see the truth for themselves. What is the economic cost of doing this and what if you find practices that need to be changed?

]]> By: Jeff Mohr http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5254 Jeff Mohr Mon, 02 Jun 2008 04:42:35 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5254 While I agree that extremes tend to get the most press, I do feel that there are a lot of factories with substandard conditions. I don't know if I would give foreign companies as much credit though (US, European Countries, more). I think for many they aren't actually checking sufficiently and know they could do a better job. But in China, so many other businesses are doing the same thing that it is easy to write off. "I have done my two checks per year which is more than many do so if it isn't up to the standards I saw it is China's fault not ours" is a common statement. But for the cases where businesses are trying their best to have proper working conditions in their overseas factories, I believe the recommendations are a good first start. Take the time to do a thorough review and make sure you have someone internal that speaks the local dialect. Don't just accept numbers, see where they came from and do some of your own calculations. Don't just be happy with the lowest price. Check to make sure it is sustainable--a balance has to be met. Paying more might be expensive, but a PR disaster is much more so. While I agree that extremes tend to get the most press, I do feel that there are a lot of factories with substandard conditions. I don’t know if I would give foreign companies as much credit though (US, European Countries, more). I think for many they aren’t actually checking sufficiently and know they could do a better job. But in China, so many other businesses are doing the same thing that it is easy to write off. “I have done my two checks per year which is more than many do so if it isn’t up to the standards I saw it is China’s fault not ours” is a common statement.

But for the cases where businesses are trying their best to have proper working conditions in their overseas factories, I believe the recommendations are a good first start. Take the time to do a thorough review and make sure you have someone internal that speaks the local dialect. Don’t just accept numbers, see where they came from and do some of your own calculations. Don’t just be happy with the lowest price. Check to make sure it is sustainable–a balance has to be met. Paying more might be expensive, but a PR disaster is much more so.

]]> By: Darold Parsons http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5253 Darold Parsons Mon, 02 Jun 2008 01:45:17 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5253 I think this is just another illustration of the need for incentives. All companies must use incentives to align their employees’ goals with those of the company. Similarly, incentives should be aligned with your supplier, outsourced or not. Ethical business always seems to fall short of the easy way out. If I can get paid the same to work hard as I would if I were lazy, then why would I work hard? It is always necessary to check up on your supplier and workers. Use incentives to align your goals, whether the incentive is more pay for quality output or a “big brother” watch all mentality. Go to China check the factories, question workers, managers, and locals and monitor the output. If something is wrong, “go to gemba” as Professor Olsen would say, and find out what it is. I think this is just another illustration of the need for incentives. All companies must use incentives to align their employees’ goals with those of the company. Similarly, incentives should be aligned with your supplier, outsourced or not. Ethical business always seems to fall short of the easy way out. If I can get paid the same to work hard as I would if I were lazy, then why would I work hard? It is always necessary to check up on your supplier and workers. Use incentives to align your goals, whether the incentive is more pay for quality output or a “big brother” watch all mentality. Go to China check the factories, question workers, managers, and locals and monitor the output. If something is wrong, “go to gemba” as Professor Olsen would say, and find out what it is.

]]> By: Dena Malloy http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5241 Dena Malloy Fri, 30 May 2008 05:37:40 +0000 http://calpolymbatrip.com/2008/china/monitoring-your-supplier/#comment-5241 Many companies wish to manufacture in China for the lowest price at all costs. They pressure their Chinese supplier to make goods for a price that is extremely low and then neglect to follow up on how the product is made. If this is your business practice in China (or the US) you will get parts of inferior quality. I have worked in manufacturing in the past (and hope to again once I graduate) and it is always in the best interests of your company to check up on your suppliers. I have had bad suppliers in China as well as California. Quality is important and the reputation of your company depends on it. You cannot get rock bottom prices without risking quality. US companies can still get their products made more cheaply in China, but they should still pay a fair wage to ensure they will get quality parts. Many companies wish to manufacture in China for the lowest price at all costs. They pressure their Chinese supplier to make goods for a price that is extremely low and then neglect to follow up on how the product is made. If this is your business practice in China (or the US) you will get parts of inferior quality. I have worked in manufacturing in the past (and hope to again once I graduate) and it is always in the best interests of your company to check up on your suppliers. I have had bad suppliers in China as well as California. Quality is important and the reputation of your company depends on it. You cannot get rock bottom prices without risking quality. US companies can still get their products made more cheaply in China, but they should still pay a fair wage to ensure they will get quality parts.

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