Hazard of Sourcing to China
Hazard of Sourcing to China
(OP)
At this point we have had long experience with sourcing to China, and my experience has been negative for the most part. It caused the downfall of my company in an automotive disaster. When Ford mandated a 10% cost reduction, we passed the reqt to our supplier. He promptly sourced plastic material from China. The source and material were not qualified; so much for QS9000.
Why is China such as economical place to get parts made? This warrants in-depth study and intelligence. Some have described the Chinese economy as a 'false' economy. My theory is that oil money from our enemies is undermining American economy by priming China to sell very low to us. The result has been closed enterprises, jobs lost, and spiraling disasters in the housing market and Wall St. Recent visitors to China report that the Chinese revel in these outcomes. If this scenario is true, what an ingenious plan our enemies have plotted to destroy us. Who would have anticipated it.
China doesn't care about our specifications; we should not care about China and their practices. We should withdraw and study what is going on under the surface. It has been confirmed that Chinese are brought down from the western mountains, and they are put to work on our parts. This doesn't fully explain the very low pricing.
We are now hearing American businessmen expressing regrets about associating their production with China. Realization of what it means to do business in China is rising. When Detroit, in response to union demands years ago, expressed that car business would heretofore become international, most didn't anticipate the full import of that statement. We will have to wake up before it is too late.
Why is China such as economical place to get parts made? This warrants in-depth study and intelligence. Some have described the Chinese economy as a 'false' economy. My theory is that oil money from our enemies is undermining American economy by priming China to sell very low to us. The result has been closed enterprises, jobs lost, and spiraling disasters in the housing market and Wall St. Recent visitors to China report that the Chinese revel in these outcomes. If this scenario is true, what an ingenious plan our enemies have plotted to destroy us. Who would have anticipated it.
China doesn't care about our specifications; we should not care about China and their practices. We should withdraw and study what is going on under the surface. It has been confirmed that Chinese are brought down from the western mountains, and they are put to work on our parts. This doesn't fully explain the very low pricing.
We are now hearing American businessmen expressing regrets about associating their production with China. Realization of what it means to do business in China is rising. When Detroit, in response to union demands years ago, expressed that car business would heretofore become international, most didn't anticipate the full import of that statement. We will have to wake up before it is too late.





RE: Hazard of Sourcing to China
China is no different than ANY other potential manufacturing location.
If you send prints to a shop with no quality controls, no processes, no supervision, no training and a high-turnover rate for employees, then you should not be surprised when you get crap.
If you spend the time to assess and qualify potential suppliers, insist and pay for the necessary quality controls, processes, supervision and training, and oversee all of that yourself, then you get good product.
This holds true for China, India, Mexico, Brazil, the USA, Europe....
RE: Hazard of Sourcing to China
This has come up a number of times in other forums such as thread16-221050: Anybody experience bad quality fasteners from China? thread1103-216008: Outsourcing Checking
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently?
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
There is no gentle way to say the oil money theory is a crackpot notion. We are quite capable of implementing our own self-destruction, thank you very much.
Two manufacturers in the Milwaukee area recently showed Ford the door. Too expensive to do business with them. Tower Automotive shut down the plant that welds SUV frames. Another company (former employer) got all the Ford business they rejected back in the form of tier 2 business, rebid & adjusted & without Ford's interference.
RE: Hazard of Sourcing to China
The material costs have some labor associated with it, but the main reason it's cheap is because of the lack of environmental laws and quality controls. This was well known 20 yrs ago. The only people we can really blame is ourselves; because in our greed, we sourced out stuff without checking or inspection, because we knew that there was no "there" there, and wanted the plausible deniability. Ultimately, we, the consumers, were more interested in low cost, at the expense of quality, hence Walmart no longer touts "Made in the US."
TTFN
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RE: Hazard of Sourcing to China
It sounds to me like your company demanded a 10% cost reduction, and then looked the other way.
What are the margins of your typical fastener manufacturer? Can anybody mass manufacture parts to specification as per whatever QA standard you may want, drop its prices 10%, and continue to make money? Your company demanded cheap stuff, and they got cheap stuff.
The biggest problem with the Chinese is that there are over a billion of them. Back in the old days when we went to Japan for cheap crap, there were less than a hundred million of them. We could saturate them with orders and drive prices up.
JHG
RE: Hazard of Sourcing to China
The other problem I have with China is their blatant disrespect for intellectual property, and the lack of properly functioning civil courts there. NEVER get into a dispute with a Chinese company if you value your freedom- just ask any number of Chinese-Canadian businessmen who have been jailed over disputes with Chinese businesses.
RE: Hazard of Sourcing to China
The good news is that their engineering capability is quite lacking. Their culture still has trouble with creative thinking as they have been taught for several generations that everything has a "right" way to do it and you shouldn't question that. This mindset is not conducive technological growth.
Luck is a difficult thing to verify and therefore should be tested often. - Me
RE: Hazard of Sourcing to China
I know of more than one technology development company who sold one unit into China, only to discover numerous units operating later- directly cloned from the original. Some even have the stones to call up the inventor/tech owner and ask them to consult with them to get their stolen units up and running- and don't understand why the owner/inventor won't do it, despite their willingness to pay for the consulting!
...and that's if the technology wasn't obtained via industrial espionage in the 1st place. One tech developer I spoke to witnessed a Chinese prospective "customer" walking around the office during a break in a meeting, photographing drawings on people's desks...
You're getting this "heresay" from me, so you'll have to take what I say with a grain of salt because I can't name names. But you can take my word for it that these aren't anecdotal reports without a basis in fact: these incidents were related to me first hand by the people who observed them directly.
RE: Hazard of Sourcing to China
As many governements have discovered, in the long term you can't maintain an artificial exchange rate. The US dollar needs to fall big-time, and when it does, the RMB will rise.
To be honest this thread seems to be absurdly racist. It would be better retitled to "manufacturer switches to alternate supplier and fails to perform due diligence DESPITE the massive amount of literature pointing out the problems of working in China" , but of course that would involve taking responsibility, rather than whining.
Cheers
Greg Locock
SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.
RE: Hazard of Sourcing to China
Luck is a difficult thing to verify and therefore should be tested often. - Me
RE: Hazard of Sourcing to China
I agree on the due dilligence thing, and part of that due dilligence would be carefully considering the IP issue.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at http://eng-tips.com/market.cfm?
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at http://eng-tips.com/market.cfm?
RE: Hazard of Sourcing to China
I understand that Mattel has formally apologized to the Chinese for some of their toy quality scandals. The Chinese were responsible for the lead based paint. Mattel was responsible for the design's that allowed for tiny, easily swallowed components on small children's toys.
Your vendor was out for minimum cost. The Chinese suppliers who were ethical, and were prepared to meet QS9000, were not going to land the contract.
Imagine you visit your local grocer, and you tell them "I want 10lb of lean ground sirloin steak, and I want it for 89 cents a pound, and I will go outside and have a cigarette while you are getting it ready."
JHG
RE: Hazard of Sourcing to China
The other truth is that the Chinese, like all other people in the world, understand that the US market is more price driven than quality driven. The fact that someone contracts for goods without performing source inspections, shows either naivete, or complicity in the actions taken in the factory.
We've seen this over, and over, again, with shoe factories all over Southeast Asia, where labor laws are blatantly ignored unless there's a big stink raised. After the dust settles, it's business as usual. Even the one shining example of quality in Asia, Japan, has shown that second and third tier suppliers in the auto industry were working in hazardous conditions. The showroom Just In Time factories hid the fact that there were many garage shop suppliers that didn't have the nice, clean jumpsuits, and nice, clean, well-lit work areas.
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Hazard of Sourcing to China
Even in China, you get what you pay for.
RE: Hazard of Sourcing to China
Cheers
Greg Locock
SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.
RE: Hazard of Sourcing to China
Only if you are vigilant and diligent. If you don't pay attention to the job, then you'll get crap, no matter what you paid for it. Isn't that the case with zubprimes and CDOs, or even the CEO of Lehman Bros?
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
Sure, China makes a lot of crap, but the West is stupid enough to buy it because it is cheaper than something made properly in our own countries. China is meeting a market need, and we are responsible for creating that market. We have sown the seed, now we are beginning to reap the harvest.
----------------------------------
If we learn from our mistakes I'm getting a great education!
RE: Hazard of Sourcing to China
A brilliant synopsis of the situation.
RE: Hazard of Sourcing to China
Meanwhile those folks in the formally undeveloped countries now have 'real jobs', paying 'real money' , and guess what? They want cars, paved roads, tv sets, Ipods & the like. ( just like we do.
Their cars require fuel to operate, the roads require concrete to build, the consumer goods require all the usual commodities to build- and we here in the states whine & cry & wonder why the price of oil has gone up??
Know what? Those "newly civilized" folks like what they have now, Meat four times a week, a little recreation at days end. And they won't easily go back to a bowl of rice & a portable radio.
And to think this all started over a game of ping pong, back in the '70's.
The Chinese have a saying, both a blessing & a curse:
" May you live in interesting times"
RE: Hazard of Sourcing to China
I've been lambasted by the E-T members when I have used this quotation and attribution so:
"Origin
While purporting to be a blessing, this is in fact a curse. It is widely reported as being of ancient Chinese origin, but is likely to be of recent and western origin, although it seems to be intended to sound Chinese, in the 'Confucious he say' mould.
The earliest citation that has yet come to light is U-Turn, a sci-fi short story by Duncan Munro (one of the pen names of Eric Frank Russell), 1950:
"For centuries the Chinese used an ancient curse: 'May you live in interesting times!' It isn't a curse any more. It's a blessing."
It may be that Russell coined the phrase himself or he may have heard it elsewhere."
http://www.phrases.org.uk/meanings/245000.html
Wikipedia gets us back to 1936:
ht
Anyway, it would be a mistake to underestimate the Chinese or to malign them. We should remember that so much of what we in the west enjoy today was truly invented by the Chinese.. my favourite is fireworks, of course (though today the 'elf and safety types keep us so far from the launch sites that we miss out on the smell), and Marco Polo brought back Pasta.
I do agree that there is much to be regretted in the current Chinese attitude to intellectual property rights, copywrite etc. but even more o be regretted both commercially (the greed mentioned above) and politically... politicians have very kindly agreed to ignore civil rights during the Olympics.. where in earlier years boycotts would be indulged for matters of equal or lesser points of principal.
It is fashionable to decry the employment of "child labour" in India but to overlook other concerns in China. A colleague of mine managed an electronics factory in China for a few years and was appalled by the conditions his workforce had to endure. The climate, the heat and dust, made it very difficult for many workers and when approached he signed off the expenses for a variety of measures only to find his decision (as MD) countermanded by the local Chinese manager and there was nothing he could do about it.
The best thing that could happen, I guess, is that China advances as quickly as possible. Why? because that insatiable demand for everything that westerners enjoy will mean that somewhere along the path to that goal they will price themselves back into a fair competitive price situation.
The Chinese demand for fuel is partly responsible for the increase in fuel prices. This was reflected by the loss of a contract to supply car seats to the US auto industry (to Mexico, I presume) when the manufacturing + freight equation failed to beat the competition.
However, when it comes to political neglect we should look carefully to the future because what our politicians are doing now is abdicate their responsibility. China is busy buying up mineral resources around the globe. It is also getting a lock on transport.
So of course the Chinese will exploit every opportunity they are gievn in their own interests. In other words, ScottyUk has the right of it.
JMW
www.ViscoAnalyser.com
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Hazard of Sourcing to China
US interaction with China?
Perhaps I am naive.
Banks behave badly? Let them fail.
But No! Let's bail them out.
A business makes bad decisions? Another will take its place.
But No! Let's bail out the car manufacturers too.
Chinese companies have poor QA/QC?
Then they will lose business or lower prices.
But wait, let's apply some protectionist strategy instead...
The free market really does work,
but (some of us) seem bent on applying socialism
or tactics otherwise suited for a command economy
when things get a little rough.
RE: Hazard of Sourcing to China
It's not socialism, but the rawest and crudest form of capitalism, when companies can make governments turn the money crank to keep profits flowing and protect the rich from losing their profits. Meanwhile, the proletariat are losing their homes and their jobs. If were truly socialist, then the company ownership would be diverted to those that suffered the most.
This is clearly a manipulation of public opinion, to divert the people's attention from the real criminals and neer-do-wells. If it were socialist, the CEOs of those companies would he hanging from the nearest tree limb, instead of enjoying their ill-gotten booty.
TTFN
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RE: Hazard of Sourcing to China
You have a free market playing with a not free one. Two competitors/partners playing by different rules.
In the current (or perhaps that should say recent) situation the 'unfree' market seemed to have an advantage in some aspects.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at http://eng-tips.com/market.cfm?
RE: Hazard of Sourcing to China
A country manipulating the value of its currency is not playing fair.
A country without functioning civil courts rewards theft and limits foreign nationals' ability to ensure that their Chinese counterparts live up to their side of any business agreement. That too isn't fair.
Only an idiot continues to play the game by the same old rules against an opponent who feels the rules don't apply to them.
As to the stuff that's going on in the US: that's a simple indication that money equals power. A functioning market economy needs a functioning democratic government to act as a counterlever against the natural tendency for power to accumulate with capital. When governments are too much in bed with those who have the capital, you get this sort of distortion occurring. This is about as far from socialism as you can get.
RE: Hazard of Sourcing to China
---
Given the recent spate of 'bailouts,' and the latest plan
for government to buy equity in private banks,
nationalization may be on the minds of not a few in DC.
At what level should we consider regulation, garantees
and public ownership 'nationalization?'
---
If free market capitalism is a superior economic system,
then why are 'special rules' required to deal with China et.al.?
Are free markets too vulnerable to attack from without,
and therefor (perhaps) not superior at all?(!)
---
If the concept of publicly funded 'public works'
disappered today, how many of us would shortly be
looking for new work?
Of course, thankfully, ASCE is advocating for trillions of
dollars of (mostly public) infrastructure spending.
:]
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at http://eng-tips.com/market.cfm?
RE: Hazard of Sourcing to China
With a global economy the (moveable) work requiring some amount of manual labour will tend to be done in locations able to supply labour and factories with the lowest prices and a market acceptable quality.
Historical example from more modern times: Shipbuilding in main Europe just after 1945: France and UK, moving and overlapping in turn to Germany, then Scandinavia with Finland, then southern Europe, Spain and Portugal, then East Europe, Japan and in turn Korea, then China. (This is of course only the rough trend)
Left and growing in Scandinavia: high tech equipment and vessels, and high-tech special offshore and submerged offshore.
Lesson 1:
To compete against cheaper and newer producers, which always will be gain fast in capital, momentum and knowledge you have to move faster, be better, automate, think longterm and develop new products meeting market demands on a high quality level.
This is nothing new. The new thing is the global market limitation and that the 'old' capital economical theory in practice demands a market with unlimited expansion possibilities.
The Chinese mainland gouvernment is in this situation thinking longterm. This includes long-term contracts for raw materials from the rest of the world, supplied to the coast where factories are situated.
In reserve is the vast inland mineral reserves wich require a better infrastructure (roads, railroads, energy) being built up by export surplus.
It also includes a mony policy as a gain to China, but 'unfair' seen from outside.
Question 1.
US seems to be lacking in a firm nationwide industrial policy, trying to coast along on the wave of dominance created by the expansion brought by the second world-war and world econmy expansion in the fifties and sixties.
The normal US company is thinking shortterm with quartal reports to stock owners - expecting an increasing short-term profit.
The actual US adaption to expansing economies in Easter Europe, Asia and other developing economies seems also to be lacking in long-term strategies.
Please present me with a US company board of directors agreeing to hold down profits for three years, investing and working for a more secured market share for the next five.
Part of the first lesson is to get a firm grip of QA - also total control on quality of all producing, purchasing and marketing processes.
Or is my European view of US companies all wrong?
RE: Hazard of Sourcing to China
Probably not in the S&P 500 or NASDAQ, but there are privately held companies doing this.
Americans in general are rabid free market capitalists. The idea of even allowing the government to plan for industry is outrageous and repugnant to all but the most left-leaning Yanks.
Another major difference in the U.S. is the banking system. In Europe, there is much closer coordination between banking and industry. Many banks' board members are also on boards for major manufacturers.
American corporations rely more heavily on the stock market to generate captial, compelling them to do unsound things to prop up stock prices. American stockholders are generally twitchier and more shortsighted than their European counterparts, leaving CEOs and board members much more vulnerable to stockholder rebellions.
RE: Hazard of Sourcing to China
OK, TheTick, thank you for the comment.
Story continues:
Fact 2.
I am a European in the valve business.
Act 1.
Situation 15 years ago in a European general industrial Exhibition / Trade Fair:
Meeting one of the the mainland Chinese valve suppliers as a dark-suited, elderly, old generation communist factory director, partaking with his company in a a mutual, arranged by the state, larger stand.
Speaking no foreign language, but politely communicating to you through a younger, equally dressed, english-speaking translator (man or woman), eagerly asking for your visit-card and business.
About his product line: 'We supply very good valves, they are exact copies of Japanese valves!'
Act 2
Situation 3 years ago in a specialized European valve trade Fair in Germany.
Remember the gag about development of Japanese quality in the picture 'Back to the future'? (The younger, present time hero, explaining to the professor from an older time that he is wrong, Japanese quality is not the worst, it is the best?).
Anyway, met in the trade-fair about three years ago:
One of the many large mainland Chinese valve producers, with a very broad specter of valves. Represented by a young Taiwanese-Chinese man. (Dont trust the media only presenting the conflict).
He is 'normal european' dressed, speaking fluent english, explaining to me the constructual details on his valve, differing, and in his mind, improving on the specialized large regulating valves produced in Germany that we are representing elsewhere. Product knowledge is top class.
On quality and marketing and financial means : support and owned by Taiwaneese, which again have learned from US and European sources.
On experience and quality in practise: large projects in China and nearer markets, full material and other quality control and certificates.
On export and expanding: nearer markets first, then Europe.
On ability and competition: 'The US producers are the largest valve suppliers in the market, (to keep US and Japanese at hand) we have selected to go mainly for European norm flanges, but can of course also supply to US and JIS standards.
Lesson 2.
Things are happening fast in all types of manufacturing companies in developing economies, what you believe is the present state is very often a stage already being passed.
Question 2.
Are US based business philosophy able to take advantage of the opportunities in theese markets and renew the old type companies?
Or is the alternative to let the lesser adaptive US-owned companies operate as is, get financial problems, and being bought from outside US sources?
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
Some years back the UK company I worked for was part of a US giant. They acquired a dP transmitter company that produced dP sensors for the US nuclear and power industries. They flew in an expert, set him up in the office and tasked him to take on the European market. He was very well resourced and had a cupboard full of desirable give-aways.
Unfortunately he had a hard time understanding that the European power industry already had a source of dP transmitters designed and manufactured for the industry and to European standards. He couldn't seem to understand that there wasnothng special about his dP transmitters except that they had all the wrong certificates and were incompatible with the European approach to instrumentation.
He finally found and signed up a European distributor who did a lot of hard work and finally began to make some headway. The moment they got an enquiry for these expensive transmitters the US factory put up the prices and the distributor dropped it like a hot potato.
I've seen quite a few sensors arrive across the water that all suffered similarly from the wrong approvals, too high a price, too high an expectation and poor aestheics.
OK, so UL listed and CSA approved is fine over there but we need ATEX, we need CE testing and approval and we like 4-20mA not 0/1-5volts and we like DI standard enclosures, 12 DIN ect not something like a night watchmans hut and that looks about a 40 year old design and not very god even then.
That isn't the whole picture. Many companies, notably those in the global market place for some time, do try to get it right but far too many don't and don't seem to want to try and then wonder why they have a hard time. Not so the far east manufacturers. What you want you seem to get. It ain't rocket science but it appears beyond many US manufacturers.
And don't get me started on the software problems or the circuit board layouts.
I recently took a fact finding tour into Germany with one such product in mind. The German distributor gave us a long tale of woe about US companies with their rotten products and high pressure sales and said the last US company he dealt with insisted on sending its top sales team over and he had to find them a good potential client to see. Against his better judgement he did. He says he has now lost that client forever because they responded badly not just to the product which despite the price looked like it had been built in a garage out of a selection of second rate off the shelf components but mostly because of the over the top sales pitch.
We can whinge all we like about China offering cheap labour and undercutting the US suppliers (and European) but if the manufacturer can't even get the basics right, this is the wrong approach. I'm not saying that China isn't a problem, it obviously is and China, like Japan seems to have a very clear vision of its long term objectives and has alignment between manufacturers and government which sees China acquiring all the resources it needs around the world to supply its industry from fuel and minerals, ports the Panama canal and so on.
In the US and Europe governments seem obsessed with "the service industry" (and look what a mess that has truned out to be with the Big Brun with his begging bowl crawling round the Middle east looking for handouts to prp up the collapsing economy with the plea that it's a "global problem". Recession maybe bu the mess with the financial markets is the result of poor governance and who knows what else.
In the UK the government seems to think manufacturing is a something dark and Dickensian and such manufacturing as there is is to be taxed out of existence and fenced around with as much red tape as possible and some of the most ill-conceived labour law imaginable.
Yes there are gong to be balance of trade problems with the Far East and China and yes there is much to deplore but until western governments get on the side of western industry until they start to worry about the realities and not the abstracts then in a dog eat dog world the western industries are being eaten alive, dogs and all, by lean mean tigers.
Every time a politician goes abroad on fact finding or to conferences they come back with a new Kyoto or something that adds further shackles to western manufacturing while and tilts the playing field even further out of kilter.
JMW
www.ViscoAnalyser.com
RE: Hazard of Sourcing to China
I would add to your comments about long term visions a part of my talk with a Chinese coleagues. Several years ago we were on a pre-tender site visit for new electric substations project in one African country. The group consisted with people from almost 10 countries, starting from Portugal and finishing to China.
In the evening in the restaurant we remain alone with one of Chinese engineers. I said him I am impressed by their fast progress from misery of communist society, because our country (Bulgaria) was much better than China during the communism, but now it is not developing so well. His answer was - don't be wrong from shining views of Shanghai and other free zones, in the countryside it is still almost the same misery. But it is normal, we started our changes just 20 years ago! Listening to that I understood how correct is the sentence: "West thinks in years, East thinks in generations."
And something about their business strategy: There were people from two Chinese companies. I asked them - how you will compete each other, you both are government-owned companies ? They said - no, each of us will prepare his offer, they will study them in Beijing and will decide who will participate and with what price.
I don't know who won that tender, because the new owner of our (just privatized) company forbade us to participate in order not to freeze some money (urgently needed for it's new BMW 7.50 !). We had very good chances to win due to our good price, first class equipment, very good references from another just completed project in same country and even good relations with somebody important in the Tender committee. But short-term income was more important for our boss comparing with more than one million USD profit which will come next year.
Not necessary to say that this company doesn't exist anymore. High qualified engineers and commercial specialists left and everybody found some better place. As far as I know, turn-key projects market in that African country is now almost completely taken by Chinese.
------------------------
It may be like this in theory and practice, but in real life it is completely different.
The favourite sentence of my army sergeant
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
As regards getting ones hands dirty I believe in the old adage "Where there's much there's brass! And No Canadians are not liberal Americans, but are the first to suffer when US agrees to Free Trade then imposes trade tarifs!
RE: Hazard of Sourcing to China
how does exchanging dirty manufacturing in the US for dirty manufacturing in China or elsewhere do anything for the environment?
If anything, manufacturing ought to be done in an environmentally sensitive country because that is where the controls are likely to be more effective.
JMW
www.ViscoAnalyser.com
RE: Hazard of Sourcing to China
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at posting policies: http://eng-tips.com/market.cfm?
RE: Hazard of Sourcing to China
jmw, given the chance, companies will flee expensive controls whenever possible, whether in the form of taxes, QA/QC or environmental regs. Economic nature of the beast. Those companies that tolerate the controls do so for some other reward.
Since 2/3rds of the US economy is essentially based on wholesale, retail, transport, (i.e. consumption), raising tariffs to control quality or manufacturing standards of foreign goods is simply not in the general US economic interest. Although some industries certainly do get special treatment.
RE: Hazard of Sourcing to China
JMW
www.ViscoAnalyser.com
RE: Hazard of Sourcing to China
child labor
groundwater contamination
sweatshop conditions
contaminated production (until they get caught)
The shareholders don't care about that sort of thing; it's profits and dividends that count for most of them. There are some mutual funds geared for "green" investors investing in "green" companies, but it's a relatively minor chunk of the investment world.
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Hazard of Sourcing to China
"It's always better to ask for forgiveness then permission"
RE: Hazard of Sourcing to China
------------------------
It may be like this in theory and practice, but in real life it is completely different.
The favourite sentence of my army sergeant
RE: Hazard of Sourcing to China
I am sorry I put melamine in your baby's formula. I will try to refrain from doing it again.
JHG
RE: Hazard of Sourcing to China
V
RE: Hazard of Sourcing to China
Cheers
Greg Locock
SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.
RE: Hazard of Sourcing to China
"It is easier to ask for forgiveness while having attorneys and PR people on staff than permission"
a sad state of affairs, indeed.
RE: Hazard of Sourcing to China
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Hazard of Sourcing to China
http://www.fordpinto.com/blowup.htm
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
As far as I know, the quote is correctly rendered by thruthefence. I have heard it a few times where I work. It is a valid concept in a discussion about getting things done. If you take the initiative, sometimes you will have to ask for forgiveness.
This discussion is about taking risks to save money, a completely different context in which the quote is irrelevant, if not dangerously wrong.
JHG
RE: Hazard of Sourcing to China
Oh dear, that comment may qualify as heresy in some quarters.
RE: Hazard of Sourcing to China
I wonder what effect Tariffs based on equality of various types of legislation would have?
I believe most previous/existing Tariffs were just based on the fact it was imported/imported from a specific country or region, without much if any regard to the above.
This usually led to counter Tariffs which I believe had the 'unintended consequence' of effectively being a tax on most international trade and causing a drop in this with resultant effects on the economy.
However, if the Tariffs were strictly based on general equivalency of legislation/regulation in specific areas such as workers rights/Health & Safety, environmental issues, animal welfare etc. would the same happen with counter tariffs?
Or would it perhaps lead to harmonization of some of these regulations across countries? (I know this has happened to some extent within the EU and similar regional agreements, which some may not like, one world government and all that.)
The poorest nations could be excused from the Tariffs/given lower rates for a certain period of time and there'd have to be measures to prevent just routing products through exempt countries etc.
I know this is/can be done by considering these factors in individual free trade agreements but perhaps a more widespread approach would be more consistent?
Also, some of the revenue raised could be used to help enforce safety standards on imported items and potentially even IP, though this is mostly a civil matter.
While the 'fair tax' type initiative of moving more taxation to sales tax instead of income & corporation is in part proposed to help balance against imports, as items are equally taxed whether imported or made locally, direct taxes aren't the only difference so it doesn't directly address the differences in regulation/legislation mentioned above.
Just thinking out load, haven't really thought it through and am not an economist, so someone go ahead and pick it apart.
KENAT,
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RE: Hazard of Sourcing to China
The downside, obviously, is that some companies are completely unable to compete effectively, regardless, ala, the US Big 3.
TTFN
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RE: Hazard of Sourcing to China
As far as google knows none of the top 10 hits on "forgiveness than permission" prefers 'better' to 'easier'.
re Pinto, just bear in mind that in practice it was just as safe as its competitors, and the jury awarded punitive damages because they were shocked that a company used a cost benefit analysis to decide whether to put a safety improvement in. Needless to say this is standard practice these days in /many/ industries, including passenger aircraft and road design, as well as automotive. You do realise that safety systems have a budget don't you?
Cheers
Greg Locock
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RE: Hazard of Sourcing to China
Cheers
Greg Locock
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RE: Hazard of Sourcing to China
That seems dubious, given the propensity for the original Pinto design to rupture its gas tank in a rear-end collision, and given your own usage of the term "safety improvement." This was a known problem. The cost benefit analysis was to determine whether to fix the problem or not.
Since it was an acknowledged problem, not found on its competitors designs, it was definitely not as safe as its competitors. It was not a issue of being as safe, and not making it better, it was a matter of not being as safe, and refusing to make it as safe as others, because of cost.
Naturally, had the Ford people being more circumspect in their memos, it would have just been chalked up to poor design, but not necessarily negligent design. Since Ford had known and documented the problem, not fixing it was potentially negligent. The fact that the cost benefit analysis tipped away from fixing it made it that much more egregious. The juries, I think, felt obliged to break past Ford's damage suit cost estimates.
TTFN
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RE: Hazard of Sourcing to China
Incidentally that article that was linked is credulous rubbish, thousands of Pinto passengers were not burnt alive, the actual figure is 27 deaths in fires, all causes. Two million Pintos were built. That is, 14 deaths per million.
Here's the average fatality rate per million vehicles for the competitive set in 75-76, lower is better.
Gremlin 345
Vega 299
Datsun 1220/210 405
Datsun 510 317
Pinto 310
Corolla 313
Beetle 374
So, deaths from fire were a tiny proportion of the fatality rate at the time, and Pinto was the second safest car on that list, or perhaps more accurately, was one of the safer cars on the list.
Of course, if you have /objective/ evidence to the contrary...
Cheers
Greg Locock
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RE: Hazard of Sourcing to China
And the Pinto link, was of course a crude response to the "ethics" segue this link has taken, which I suppose was itself an comment on my permission/forgiveness saying. I would assume that by my posting, I was placed in the robber baron,scorched earth ,feed the whales-to-my-cat category.
Regarding again the "Pinto Link" my point was not to point out "bad engineering" but compromise, as you have stated.
And Greg, didn't ACBC strive to build a car that the first pieces began to fall off, just as the checkered flag fell? Compromise taken to it's extreme?
RE: Hazard of Sourcing to China
http:/
Ford's own product testing showed 100% failure of the gas tank at relatively low speeds. This was what eventually caused the Pinto recall. Similar problems occurred in the Crown Vic.
TTFN
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RE: Hazard of Sourcing to China
OK, that's freedom of choice.
Cheers
Greg Locock
SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.
RE: Hazard of Sourcing to China
TTFN
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RE: Hazard of Sourcing to China
In competition, components that fail in the race are substandard and components that last much longer than a race are over-engineered and carry a weight/speed penalty.
Drivers are expensive to replace and safety is a primary consideration, repair costs for the cars an overhead.
The family saloon must be affordable, and repairable.
There is and always will be and always should be a personal choice involved that balances costs against the features and benefits, within the framework of an [i]appropriate[i] set of legislation.
Now when it comes to trade barriers and cars the past masters are the Japanese. By judicious use of standards (environmental and safety) frequently changed and implemented, Japanese cars have sold the world over while foreign cars were foreign to Japanese streets.
The trouble is a lack of alignment of political and commercial interests in western countries (and inept politicians anyway) so that such trade barriers as are set up often become meaningless or easily evaded.
JMW
www.ViscoAnalyser.com
RE: Hazard of Sourcing to China
Dealing with China sound similair to dealing with Sovergein Native American Nations. In many case if you provided them with services and materials and there is a dispute you have to sue in Tribal Court. So there are cases where the tribe will refuse to pay for services and materials, and refuse to hear a case over it in tribal court.
Please note I have been involved in a number of very sucessful projects working with Sovergein Nations. The vast vast majority of the Sovergein Nations pay their bills and deal fairly with contractors.
I just bring this up as an example of dealing with a different goverment and court system. Also in many cases particularly on very large construction projects, the Sovergein Nations will agree to settle disputes in State Courts.
RE: Hazard of Sourcing to China
I saw this over in the pub from another poster and it made me chuckle.
KENAT,
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RE: Hazard of Sourcing to China
One source was a Chinese economist who questioned the wisdom of the massive investment in new industrial cities while neglecting the rural areas.
There doesn't appear much from a casual internet search but I'm sure more can be found.
Mostly what is there is the conventional reaction to the current global problems but the discussion I heard was related to a more deep seated problem with the approach taken since Tienanmen Square.
Of real concern is what this means to us, if it is true, and not just generally but how it will affect engineering and outsourcing.
Typical of easily found:
http:
http://news.bbc.co.uk/2/hi/business/7679679.stm
h
JMW
www.ViscoAnalyser.com
RE: Hazard of Sourcing to China
RE: Hazard of Sourcing to China
I can't find a good link but my direct Boss tells me he saw part of a speech or something from Obama where he talked about taxing companies that move jobs overseas or something like that.
Given our places big plans for this in the near future, he thought he should let a few people know we might want to consider this when we look at outsourcing/offshoring.
He got told to shut up, they didn't want to hear it. The plan is to outsource abroad regardless of whether it makes any sense to do so.
Genius.
KENAT,
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RE: Hazard of Sourcing to China
TTFN
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RE: Hazard of Sourcing to China
Senior management don't want to hear it though. Their latest management book must say 'outsourcing/off-shoring good' and they cannot be disuaded.
KENAT,
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RE: Hazard of Sourcing to China