In his new book, Poorly Made in China: An Insider's Account of the Tactics Behind China's Production Game, Paul Midler attempts to explain why some Chinese-made products suffer from poor quality. Part of the problem, he says, is rooted in miscommunication and misunderstandings between American companies and the Chinese manufacturers they are buying from. I recently E-mailed with Midler, a businessman who has worked with American and Chinese businesses, about his experiences. Excerpts:
What do you think Americans would find most surprising about the factories you worked with in China?
In my book, I show how Chinese manufacturers and American importing companies are often in conflict. Many people presume that there is a great deal of cooperation involved between the companies that make our products and those bringing them into the country. What consumers don’t understand is the related struggle. Chinese supplies want to save money by reducing specifications, and American companies are trying to fight for higher levels of quality at reasonable prices. The customer may always be right, but quality failures often are the result of a relationship imbalance and asymmetrical information. Manufacturing companies that produce a substandard product often know what the problem is with their product, but they don’t provide much of a hint to their customers. This means that importing companies have to guess at where corners may have been cut. It’s a dangerous situation for all of us to be in, actually.
Why has China become such a huge exporter of factory-made goods? Do you think it still will be in 10 years?
I try to answer this question in the book. Towards the beginning, I point out how easy it is to get anything manufactured in China. You can actually get something made faster in North America, and you can get it made cheaper in other developing economies. China wins because it offers a level of convenience that other markets cannot provide.
Manufacturers in China will say to an importer, “all we need is your sample,” and the factory will work out the details. For this kind of convenience, importers are actually willing to pay a little bit more, and this has been a less talked about contributing factor to rising prices out of China. There will be problems in the production process related to quality, but the convenience factor is still there anyway. For these reasons and more, I think China will continue to be a place where our consumer goods are made.
“Poorly Made in China” might seem like a harsh title to some. Are the products coming out of Chinese factories really so poorly made?
I don’t think it’s harsh. First, we have had many instances of failing products out of China, and you have to remember something important here. For every single instance of a widely publicized product recall, you have probably hundreds of quality problems that do not get broader media attention, though they probably should. My book is not about the quality recalls that were made public, but of my own struggle to produce quality goods out of China. Anyone who had seen what I had could have predicted the quality problems that we’ve had out of China.
Anyway, while some might find the book harsh, others are describing it as enlightening and funny. It could be considered farce. So many of the situations that I described in the book are comically improbable. Many have asked me after reading the book, “How could you work in such conditions?” One of the reasons I wanted to write this book was to describe the carnival-like environment in which so many of our consumer products are manufactured.
As far as “poorly made” goes, maybe the title is a suggestion about other things, as well. You know, we all rushed headlong into China without long discussions about the linguistic and cultural gaps that exist – and they are real. Should we have been surprised at what happened when we took our production orders to an economy that is different than our own, where controls are lacking, where business ethics are in short supply? Without a doubt, certain decisions related to China were “poorly made.”
Do you avoid buying Chinese-made goods because of quality issues, and do you recommend others do the same? What types of products are especially alarming/dangerous? Any categories that are "safe"?
In my book, I described a personal struggle I had with made-in-China products. As a manufacturing professional, I became aware of how factories would make unilateral changes to products without informing their customers. This sort of behavior introduces an unquantifiable amount of risk, and, yes, I grew increasingly worried about the products that I used that were “made in China.”
I don’t know which specific products are safe, but I have certain criteria that I worry about more than others. One suggestion that I’ve made is that importers pay more attention to heavy products, since they are less likely to be sent off to a testing laboratory. A teddy bear fits into an express delivery pouch and doesn’t cost much to send, whereas the shipping cost on building materials can be exorbitant. It was no surprise to me that we had a sudden problem with drywall from China. It’s too expensive to ship to a laboratory.
Another area of concern would be anything to do with chemicals, specifically because related problems are hard to detect. You can’t spot a quality problem having to do with a chemical substance just by looking at it. This makes inspection tough. When it comes to third-party testing, you have to tell the laboratory what to look for. You can’t submit a product for testing and ask the lab to “be sure that there’s no bad stuff inside.” Everyone now knows to check for melamine in Chinese milk products, but before the case got widespread press coverage, no one was thinking “melamine.” So long as there are manufacturers who are trying to game the system by circumventing testing systems, consumers will have to be concerned about products coming from China.
Some say that China is going through what Japan went through in the 1950s. Or quality problems in China today are sometimes compared with quality problems Americans suffered in the 19th century. What do you say to these sorts of claims?
I’m not so sure about the analogy with Japan in the 1950s. In China, you have specifications reductions that result in what I call “quality fade,” but then you also have some rather willful game playing where quality is manipulated in such a way so as to fool laboratory equipment and inspection. The melamine scandal in China’s dairy industry is a case in point, though it affected the Chinese more than it affected the rest of the world. You have large number of industry insiders who were adding a chemical ingredient in order to circumvent testing controls. You have in China quite literally thousands of foreign inspectors running around China in a bid to preempt disaster. This phenomenon did not exist in Japan at any point in its development.
Now, some have argued that what China is going through is nothing more than growing pains. Every developing economy must first make junk before it produces a quality product. I have no problem with this presumption, except the point should have been made when U.S. politicians were debating in the 1990s whether to swing wider the doors of trade with China. At the time, business leaders were claiming that families would save $300 per year through outsourcing to China. No one ever suggested that there was going to be any sort of trade off, that sending manufacturing orders to China would be the equivalent of jumping back to the 19th century to a time that predated consumer product safety.
My book is in part a way of assessing the past ten or fifteen years. How have we done in sending most of our manufacturing orders to China? Was it such a good idea after all? What have we gained, and what have we lost?