China Manufacturing Decoded
 

China Manufacturing Decoded

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Join Renaud Anjoran, Founder & CEO of Sofeast, in this podcast aimed at importers who develop their own products as he discusses the hottest topics and shares actionable tips for manufacturing in China & Asia today! WHO IS RENAUD? Renaud is a French ISO 9001 & 14001 certified lead auditor, ASQ certified Quality Engineer and Quality Manager who has been working in the Chinese manufacturing industry since 2005. He is the founder of the Sofeast group that has over 200 staff globally and offers services (QA, product development & engineering, project management, Supply Chain Management, product compliance, reliability testing), contract manufacturing, and 3PL fulfillment for importers and businesses who develop their own products and buyers from China & SE Asia. WHY LISTEN? We‘ll discuss interesting topics for anyone who develops and sources their products from Asian suppliers and will share Renaud‘s decades of manufacturing experience, as well as inviting guests from the industry to get a different viewpoint. Our goal is to help you get better results and end up with suppliers and products that exceed your expectations!

Episodes

The Concept Of 'Design For Quality' (DFQ)

Friday Mar 12, 2021

Friday Mar 12, 2021

In This Episode...

Design For Quality is a process we follow in order to design good quality into products at the early concept and prototyping stages during the new product introduction process.

You will probably be surprised as to how many design points need to be considered in order to have a mature product design that can be mass-produced with the minimum of quality problems, defects, safety issues, and more.

Our CEO Renaud has worked with clients on numerous products over around 2 decades in Asia and performing thorough DFQ reviews on their product designs is one of the key tools in Sofeast's armory when it comes to bringing great quality products to market. So, in this episode, he shares the lowdown on this important quality process.

Show Notes

00:00 - Introducing the episode 

01:14 - Why is the design stage of the new product introduction process so important? - Renaud gives a lot of background about what goes into product design and how the decisions you make about materials and processes impact product quality (considering 'what could go wrong based on what we know about them?'). Also, he explains the difference between manufacturing quality issues and design deficiencies.

09:14 - DFQ reviews often happen before you invest in the tooling. Here's why... - Tooling is very expensive, so making changes to the design before it's made is really preferable, but most Chinese manufacturers are not good at providing feedback on designs that can cause costly manufacturing issues (like scrap and rework).

11:30 - Changes are quick and cheap at the concept stage, but later on are an expensive problem - Renaud discusses this point which is also illustrated in this graph:

14:30 - What are the principles in DFQ that we follow when reviewing our product and its design? 

  • Understand past issues and learn from mistakes.
  • Identify issues as early as possible and ensure they are ‘designed out’ of the product (you can't inspect quality into a product).
  • Use error-proof design techniques - this will reduce scrap and rework for a start, so use fixtures that only allow operators to assemble parts in the correct way, for example.
  • Simplify the design to reduce quality issues, (one piece is better than two, fewer functionalities may be better overall)
  • Have robust tolerance understanding for each part.
  • Standardize parts where possible (try to reduce the number of custom parts and use off-the-shelf ones instead) - this also reduces supply chain risk, too.
  • Have a multi-functional team - try to get involvement from a number of different staff in the DFQ review, including design, engineering, and, importantly, manufacturing staff, too, as they know the production processes best.

24:11 - If you're manufacturing a new product, who can you rely on for information about your product at an early stage? - Manufacturers often say that they do a DFM/DFQ review, but they don't always take it very seriously. So a common concern is how reliable the review was. Therefore many importers choose to work with a specialist 3rd party engineering firm to help them perform a DFM review and assist with their product R&D (our company Sofeast is one example) in addition to their manufacturer.

27:32 - Some common mistakes that cause poor-quality products (that we try to weed out with a DFQ review):

  • Putting the incorrect tolerances on mechanical drawings.
  • Relying on prototypes' tolerances for critical dimensions when going into mass production (as prototype production is not the same as mass production).
  • Relying solely on feedback from designers about the product - they might think the product is designed beautifully, but it's not easy to use. In this case, it's still a quality fail for end-users as they won't enjoy using the product.
  • Not performing accelerated 'stress testing' to confirm serious weaknesses in the product's design - a product needs to be able to survive for a reasonable amount of time when being used by the end-user, so the normal usage needs to be tested (such as testing an office chair being sat on thousands of times to simulate its use over a number of years).
  • Confirm through reviews that the design is suitable for the manufacturing processes used and will result in good quality products - pilot runs which are observed by a quality engineer are a good way to assess this.
  • Not performing compliance testing - this could cause safety issues which lead to you being sued or getting your products stopped by customs. Either way, both circumstances are costly and damaging.

36:58 - Some examples of how DFQ reviews have improved products before they went into production - since this is something we actively do, Renaud shares some real-life examples, and more. Includes hazardous battery design (think Note 7), brittle magnets, products that need to be waterproof, and more.

39:54 - You may get helpful feedback from component/material sub-suppliers - good feedback can be found by forcing a dialogue with sub-suppliers which Chinese manufacturers may not do in their haste to go to mass-production. But if these sub-suppliers are specialists in the component or material in question they may have some very helpful advice about how the product design best makes use of the component/material in order to reduce quality issues during production.

40:47 - Wrapping up

 

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Preventive Maintenance And Its Many Benefits

Friday Mar 05, 2021

Friday Mar 05, 2021

In This Episode...

Preventive maintenance in the factory is a topic of interest for many Sofeast customers, and manufacturers who rely on machinery in the factory and choose to put in place a preventive maintenance plan tend to keep operations running smoothly and keep ahead of equipment maintenance, repairs, and routine part replacements. This gives them numerous advantages, not least fewer quality problems, less cost sunk into inventory, higher labor productivity, and much more!

In this episode, our CEO Renaud introduces preventive maintenance, its benefits, and shares some examples to help illustrate how it works and how to implement it. We'll also share some of the key elements of a preventive maintenance plan and a free template that you can download, too.

Show Notes

00:00 - Introducing the episode 

01:02 - The example of what 'bad factories' do that we need to avoid - no preventive actions, lack staff to maintain the equipment, the equipment is too high-tech for them, make rushed repairs if it breaks down, trapped in a cycle of the equipment going down, being repaired, and then going down again.

03:03 - What is preventive maintenance? - minimizes the amount of unplanned downtime. Regular activities are performed to keep the equipment in a top operating condition (with short downtime). Being vigilant about certain components' lifetimes and standing ready to replace them with spares when they reach the Mean Time To Repair (according to the manufacturer).

04:36 - The overlap between preventive maintenance and 5S - both require people to follow pan and achieve set goals and 5S helps with preventive maintenance.

05:52 - Is preventive maintenance expensive in comparison to more 'reactive' maintenance? - if a machine goes down the impact on costs, quality, delivery times, staff productivity, and customer relationships are probably high. While preventive maintenance has its own cost, you need to weigh up that cost against the disadvantages of machines being out of order. Preventive maintenance is like regular dental appointments, small actions prevent larger problems later on.

09:18 - Some examples demonstrating how preventive maintenance works - time and age-based activities are usually undertaken (similar to car servicing). The objective is to keep machinery 'as new as possible.' Sometimes it's more like a process control plan where there are hourly, daily, or weekly activities.
For more information on these examples, you can read this blog post.

15:09 - Download the Sofeast preventive maintenance plan template - download the plan here.

16:00 - What kinds of challenges can we expect to face when trying to implement a new preventive maintenance strategy in a factory in China (or elsewhere)? - there will likely be pushback from production staff who will complain they're 'too busy' and are used to running machines until they break down. Also, there can be a lack of capable staff able to carry out the preventive maintenance, which is especially an issue in factories that have implemented a lot of high-tech automation quickly, rather than bringing it in step-by-step.

18:49 - The trouble with automation... - it's often down (30-40% of the time) due to a lack of experience to maintain it to a high enough standard. As automation increases in use, the issue of maintenance will become increasingly important for factories to be in control of.

20:46 - A rundown of benefits you can expect when implementing preventive maintenance - the reduction of unexpected downtime:

  • increases factory capacity so fixed expenses increase production
  • reduces inventory required to cover for downtime which frees up cash for other business requirements
  • reduces lead times and delays to customers which will please them and boost relationships
  • smart preventive maintenance + smart automation (implementing step-by-step), you maximize staff productivity and can go further and faster with automation
  • reduces quality issues and waste (faulty or worn machines produce poor-quality components/products) 
  • preventive maintenance + 5S + process controls work together well to reinforce one another (actions can be taken before problems become serious)

25:37 - Wrapping up - you have to do maintenance anyway, so, the question is, do you want to do it on your terms armed with a plan that vastly reduces the chances for you to suffer from unpleasant surprises and the many negative effects of unexpected equipment downtime? If so, preventive maintenance is for you.

 

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How We Set Up A New Factory In China (from idea to operation)

Friday Feb 26, 2021

Friday Feb 26, 2021

In This Episode...

Interested in setting up a factory of your own in China (or perhaps other countries in Asia, too)? 

Renaud and his business partner Fabien have been there and done it, so let's explore how they set up our Chinese contract manufacturing subsidiary, Agilian Technology, and how they've tried to implement best practices learned over decades in China to offer something better than other Chinese factories.

Show Notes

00:00 - Introducing the episode 

02:10 - What's the story behind Sofeast opening 'Agilian Technology' our contract manufacturing subsidiary (factory) in China? - Grounded in setting up a good, transparent supply chain in order to have better control - so opening our own factory for assembly, etc to close the loop for clients was a natural progression for the company.

07:32 - How going through this process was an education - being an actual Chinese manufacturer provided us with a lot of new opportunities, such as being able to agree on preferential credit terms with local Chinese component/material suppliers who would usually demand payment upfront from foreign customers.

The 6 phases we went through to open our factory

09:04 - Phase 1: Choosing the right site - how to find sites that fit our needs, dealing with estate agents, etc.

16:14 - Phase 2: Adhering to local regulations - includes fire regulations, battery storage, recruiting and training staff, preparing the production transfer from the old location, insurance, and more. 

21:14 - Phase 3: Decorating the factory - planning the areas and decorating happens before the transfer. This includes deciding on decoration, floor style, toilets, ventilation, lighting, and much more. Following up on the contractor is crucial as it usually a one-off job so they may not be someone you have a long-standing relationship with.

26:05 - Phase 4: Setting up the office - important points are different areas, lighting, wifi internet access, plugs and sockets, flooring, etc.

27:11 - Phase 5: Setting up the workshop - plan for the layout and material flow to avoid internal logistics inefficiency, line layout to be optimal (we use compact U-shaped cells and also longer lines for higher volumes), power usage, lighting and ventilation, security, and more.

32:14 - Phase 6: Setting up the warehouse - warehouse layout with a focus on material flow, also installing racking, forklifts, setting up doors, fans, and lights. A word on preventing theft and its impact on production and business.

34:53 - Take best practices and implement them - observe the factories you like and implement their good ideas! An example of this was keeping our office-based staff who are involved with production near to the workshop with a glass wall so they have visibility of production. In many Chinese factories staff like production managers and quality managers often have separate offices and avoid going onto the factory floor, but this reduces the value they can add. Continuous improvement and problem-solving are built into how we structured our factory, but this is opposite to many other local competitors.

39:47 - Wrapping up

 

Related content...

  • Take a look at Agilian's mass production in China page which includes a really helpful video from Renaud where he answers key questions customers have about Agilian before working with us on a manufacturing project.
  • Visualize the different areas of the factory by watching them in operation on Agilian's YouTube channel.
  • Renaud listed the phases followed to set up Agilian in this blog post.

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A New 'Cold War' Between The USA & China's Effect On Manufacturing

Friday Feb 19, 2021

Friday Feb 19, 2021

In This Episode...

Adrian and our CEO, Renaud, discuss how the current political tensions between the USA and other Western nations and China are affecting manufacturing and provide some more general observations on the 'Cold War' trends of containment and decoupling that seem to be gathering strength.

This topic stemmed from this recent Forbes article which suggested that Americans polled would be prepared to pay 20% more for goods manufactured in democracies...No prizes for guessing which country it casts doubts over.

So, how serious is this 'Cold War' that's developing, what are we seeing on the ground in China, what could be overstated by the media, and is it really causing a lot of upheaval in manufacturing and an exodus from China of Western brands?

Show Notes

00:00 - Introducing the episode 

01:13 - Discussing the recent Forbes article titled: Americans Fine With Paying More If Trading With Democracies, Not China - how realistic is this and has the poll been couched in an inflammatory language to elicit a negative response?

06:09 - Militant consumerism - Some aspirational brands, such as Apple and Nike, have lost customers due to high-profile corporate social responsibility issues, so they make efforts to control supply chains strictly. But 'China' seems to be more worrying for governments than consumers, and Chinese made goods are almost always generally accepted to be trustworthy and good enough quality these days by consumers and political factors, such as China's governance, doesn't really affect buying decisions by consumers much yet.

08:43 - Could this type of news constitute a threat to 'Made-in-China' products by stirring up anti-China sentiment among militant consumers? - militant consumers have already started to push back against brands with an environmental impact such as apparel, cosmetics, cleaning products, etc. Could China be put in their sights if they're continually exposed to news articles like this?

10:06 - The 'real effect' militant consumers are having on apparel - brands are paying more attention to environmental impact due to the concerns of militant consumers, but many fast-fashion brands are just 'greenwashing' their brands for marketing purposes rather than making meaningful changes. 

15:59 - The sentiment towards China - this has been on a downward trend since before the Trump administration and, enhanced by him, the prevailing attitude towards China in the USA is now negative. Australia, Europe, and the UK have also taken a stand against China in different ways recently and the results haven't always been positive for them. China's global PR isn't always the best and the leadership tend to be more focused on what Chinese people think of them than outside countries which doesn't help change attitudes quickly.

21:04 - Why a 'Western' viewpoint tends to cast China in a poor light - this coupled with politicians and the media means that sentiment towards China may not improve for some years to come.

23:55 - The growing 'Cold War' trend between the USA & China - what does this mean? Containment and decoupling activities are becoming more prominent. Is the media being used to contain China right now (including articles like that mentioned earlier)? Also, are we seeing real-world Cold-war scenarios where current tensions in the South China Sea, India, and also Myanmar (where the US-friendly government has been toppled by the military who are friendly to China), for example, mirror the days of the Cold War between the USA and the USSR where there were side conflicts rather than a war between the 2 superpowers?

28:25 - Is it 'wrong' that China is building up global power and influence, especially in Asia? - the Western media often paints this as a worrying or negative thing, but if we look at this situation from outside of the Western viewpoint, this is nothing that hasn't been done before by Western superpowers. What would Western countries do if they were surrounded by an opposing military power in the same way that China is? Renaud also makes some interesting points about China's government - they're making great efforts to build an extremely professional and modern government. The problem is, it seems difficult to imagine a time when China and the West will understand and agree with each other (this is manifested in the recent mistrust on both sides surrounding the WHO investigation in China regarding the origin of the coronavirus).

33:18 - Decoupling. Is this something that's having a strong effect on manufacturing in China yet? - in electronics, there has been almost no decoupling (this is echoed by Richard Barnett in this interview). At most, there has been some movement of final assembly to places like Vietnam and in some cases, some new products have been developed in Taiwan rather than China. The apparel industry has already decoupled from China to a large extent, but this was happening long before today's tensions. 
Even where supply chains have been relocated, the final assembly is a relatively low value-add and components are usually still made in China.

38:51 - Finding countries that can provide a complete supply chain for most products outside of apparel is unlikely...yet. Vietnam is mooted as a modern success story and a potential alternative to China, but it's still a tiny resource in comparison to its large neighbor.

39:57 - Wrapping up

 

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Importer's 'Supply Chain Spring Clean' Checklist To Find Risks & Opportunities

Friday Feb 12, 2021

Friday Feb 12, 2021

In This Episode...

Adrian and Renaud, Sofeast's CEO, return in this special Chinese New Year 2021 edition of the podcast! 🧧🧨🐂

During the CNY period manufacturing in China (and other parts of East Asia) is effectively on hold for several weeks, so during this time importers have a chance to 'Spring Clean' their supply chain, finding and eliminating risks and also looking for untapped opportunities to make improvements, costs savings, and more.

So, based on his decades of experience in dealing with Asian suppliers, here's an interesting checklist from Renaud for you to work through over these few weeks. 

Show Notes

00:00 - Introducing the episode - why now is a good time to 'spring clean' your supply chain

02:52 - Risks associated with your current supplier base - too concentrated in 1 country, no backup suppliers for key components/products, near-shoring an option? etc...

08:01 - Is assembly closer to home using Chinese components a workaround for importers who want to move some of their supply chains out of China? If substantial transformation takes place you can say products are 'made in' another country other than China which could be beneficial, but a very long and complex supply chain also has its own issues as we discuss...

11:37 - Consolidate and strengthen relationships with key suppliers - few key suppliers rather than many, and managing them differently - more hands-on management, helping improve operations, etc. Giving talented suppliers (new or current) with R&D capabilities more business and co-developing new products with them helps you to gain closer relationships and can help form exclusive relationships with great suppliers. IKEA, for example, also sends in engineers to help their key suppliers 'level up' and improve quality etc, so this is another way to strengthen relationships.

16:40 - Rank & yank: what about replacing the lowest-performing factory every year? - grade suppliers based on their results and capabilities and encourage some turnover amongst the poorest performers. Why you need to take a zero-tolerance approach to a supplier with a history of poor performance.

20:34 - Why are many importers are reluctant to get rid of poor suppliers? - discussing why importers often fear the upheaval of switching to new suppliers.

22:58 - Do you have legal agreements in place with suppliers? - if a legal and enforceable manufacturing agreement/contract is in place importers shouldn't need to fear switching suppliers as much. If you didn't put such an agreement in place it's not always too late, Renaud gives some tips on how to reason with your supplier and persuade them to sign one.

25:44 - Does your onboarding process for new suppliers need to be tweaked to encourage the signing of manufacturing agreements? - based on past experiences with manufacturing agreements (or lack of) you can plan how to make new suppliers sign one as a standard process in future. This can also work with current suppliers, where they can be persuaded to sign one with the promise of new orders if they do so. It's imperative that the contract is enforceable in your supplier's country.

29:15 - Transparency into the supply chain? - do you buy from companies who do only final assembly, not creating much real value, but you stick with them because they have the contacts of the key component suppliers? This is a lack of transparency in your supply chain. There are ways to work on getting those key suppliers' contacts from these suppliers and then set up a parallel supply chain that you control, as well as finally cutting away the deadwood as we discuss here.

32:45 - Redesign of key products for better durability & reliability - taking information from users of the products in the field about failures and using it to redesign the production process, change a secondary material, or something actually fairly simple in order to produce a far better product. Doing this is often left on the 'back-burner' until a V2.0 or V3.0 of the product.

35:07 - Do you collect and use data about quality issues, returns, complaints, etc? - setting up a database and analyzing the trends and key issues is a good idea. Performing failure analysis on these will help you improve. This is a commonly missed opportunity for many importers.

36:53 - Do you have a structured NPI process in place if you're developing new products in order to reduce risks without adding much time & cost? - letting a factory rush to production, as Chinese suppliers often like to do, increases your risks, especially for new and complex products. Implementing a structured process will reduce the chances of nasty surprises during production.

39:08 - Local teams for sourcing: are they working hard enough to find new sources? - can they be incentivised somehow to become hungrier to find better new suppliers? 

39:40 - Local teams for QC: are they competitive with external QC agencies? Do they work smarter over the years? - it may be that the cost of outsourcing QC to an external inspection provider compares favorably with that of your internal team and leads to less stress. Using an app to reduce paperwork and improve productivity could be something to consider for your inspection team, too.

41:02 - Inventory management - is it time to make better decisions based on risks of disruption based on the risk each individual supplier creates? This can be assessed using data to help you make decisions on how much inventory you truly need. 

41:42 - Using an ERP or other IT systems to improve how you manage your business? - maybe it's time to explore what other companies use to manage their key numbers and people.

42:15 - Wrapping up

 

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Richard Barnett | Electronics Supply Chain Risk Management in 2021

Friday Feb 05, 2021

Friday Feb 05, 2021

In This Episode...

Adrian interviews Richard Barnett, CMO of SupplyFrame, an AI-based SaaS solution which enables sourcing insights and decision support that improves the performance and resilience of electronics supply chains. 

US-native Richard has decades of experience in the electronics field and has clocked many years in Asia, so he was an ideal person to discuss supply chain risks faced by today's importers of Asian electronic products and components in 2021 and risk-management techniques and advice that can help you become less affected by risks, such as the coronavirus pandemic we have been facing, political issues, and more.

One particularly interesting topic that he raised is how design & procurement influence the risk profile of the resulting productions.

Show Notes

00:00 - Introducing the episode - topics around how to manage innovation, what do we expect post-covid across the global electronics value chain, and more

01:57 - Brief introduction of Richard and Supplyframe.com

04:50 - How does Richard's experience at Supplyframe fit in with an importer of electronics who is developing a new product? For a high-tech startup, for example, their solution would help provide new forms of intelligence to accelerate product design, identify and reduce risks of key component selections in the design phase, and think about how to align to ramp to volume considering key risks in the electronics supply value chain.

07:13 - Why risk reduction is more important than ever today and how the trend is becoming more widespread. The pandemic and the associated manufacturing shutdown in China in early 2020 forced many importers to react and work on making their supply chains more resilient, especially those in an industry where demand dropped off or ramped up quickly. Many importers have now been assessing how to improve supply chain resilience based on what they've learned and experienced which previously they perhaps didn't - this is 'the next normal.'

10:27 - A list of some of the risks which have exhibited themselves recently that importers should try to avoid. The pandemic spurred a number of risks recently that were unforeseen, but before the pandemic even occurred, there were key risks in the high-tech and electronic value supply chains such as US/China trade war tariffs, Korea and Japan trade tensions, FAB production capacity, memory production capacity, and more.

13:08 - If you've been hit by the risks described, what's the way out of this for importers? Optimizing your supply chain with flexibility, thinking through where opportunities for risk-sharing with a key manufacturer in terms of inventory or lead time, for example. Examining the multi-tier supply chain to find and eliminate bottlenecks and risks and understand where you can drive the greatest long-term impact, which is at the point of design. For example, de-risking the BOM by qualifying backup component suppliers so it's possible to pivot to procuring from them instead quickly if a problem occurs with a primary supplier is an important way to reduce risks.

17:43 - Is the 'US/China trade war' an ongoing risk that electronics importers should be wary of? The total impact of the transition out of China in the last few years has been less than 10% on aggregate, so the idea that decoupling from China will happen rapidly is unrealistic. Rather than uproot from China, Richard has seen additional costs absorbed by manufacturers or passed on to customers and he predicts seeing more of the same. 

22:52 - Some interesting dynamics that are not impacted directly by trade-policy. 2021 is a turbulent year: we're reducing COVID restrictions, working from home, especially skilled digital work, has exploded, autos are now starting to pick up, hospitality, too, will be, so there's a V-shaped recovery. He sees a shift in key component and commodity categories being reallocated into other more reliable and profitable industries, such as from consumer electronics to autos or medical technology. There is a resetting of what is 'just-in-case' VS 'just-in-time?' 'What is the appropriate inventory buffer we need?' 'How do I negotiate my agreements to balance risk-sharing rather than just chasing the lowest cost?' Etc.

26:25 - Why some companies simply weren't prepared for the pandemic. Even the largest companies often hadn't done business continuity planning around pandemic response, so smaller tech startups have certainly faced substantial risks. Therefore aligning and synchronising recovery with what's driving demand, and focussing on reducing lead time, bottlenecks and other risks, as well as reviewing design in order to build risk-reduction into the design itself are the key takeaways here.

28:10 - What is 'Design To Source Intelligence?' Explaining the new form of intelligence that is about finding new insights to influence decisions and be more effective in the global electronics value chain based on a distillation of information from big data including market demand, costs, and much, much more that perhaps wasn't available to most importers until recently.

30:45 - Wrapping up

 

Related content...

You will also like this series of blog posts on supply chain risks management that Renaud wrote, which includes topics like what black swan events like the pandemic could be described as being, business continuity planning, the benefits of supply chain scorecards, and more.

 

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Could Rising COVID-19 Cases In China Before CNY '21 Affect Supply Chains?

Friday Jan 29, 2021

Friday Jan 29, 2021

In This Episode...

Adrian and Renaud discuss the rising number of COVID-19 cases in China barely a week or so before the Chinese New Year holiday is set to happen where tens of millions of people will travel home around the country.

The outbreak is centered on the North of the country at present, but if it were to spread this could lead to lockdowns throughout the country and the authorities are already raising alertness and preparations to suppress its spread as much as possible.

If you have a supply chain in China it's important to understand how this may affect the holiday, Chinese workers travelling around the country, and your suppliers.

Let's hear what's happening from China directly...

Show Notes

00:00 - Introducing the episode

02:55 - What's the situation with coronavirus in China right now (Jan 28th 2021) and how may it affect manufacturing? Explaining the logistics of tens of millions of people moving around the country during this period. Why the government doesn't want a repeat of the Hubei lockdown.

09:20 - How large family meals and meeting other large households during CNY increases the risks.

10:58 - Could restrictions be more centered around the North of China, or more widespread? There are low, medium, and high-risk areas. Local governments have told companies to try to limit employees travelling home at all and requested stricter adherence to rules, such as mask-wearing. Government employees have been barred from travelling, but private company employees can travel.

14:03 - How tighter travel restrictions have caused perverse effects on the manufacturing industry in China earlier than usual. Knowing that travel will become more difficult and there may be quarantine periods (away from the family) for inter-province travellers, some staff have left to go home for CNY earlier than ever. In the case of key workers, such as machine specialists, this has affected factory productivity and output if there is no one else there who can do their jobs. So some factories have been forced to stop certain work 2 to 3 weeks earlier than usual.

17:53 - Why a lot of Chinese exporters are suffering, despite the 'boom' in exports. The unfavorable exchange rate is not helping companies who export from China, nor is the crazy logistics situation.

19:10 - If many workers don't travel home for CNY and opt to stay in the cities where they work, could this mean that factories get back to work sooner than usual after the holiday? It could be the case, especially in purely assembly or packing facilities which can operate of key people are not present. One problem could be that quality inspectors haven't gone back to work yet, though, which could lead to poorer quality products after CNY than usual.

20:44 - What's the worst-case scenario for importers with a Chinese supply chain? If very strict preventive measures are taken it could put a lot of workers in quarantine upon arrival back to their company's city from their hometown. If areas or provinces are locked down, this could affect your supply from companies in those areas (this happened with Hubei in 2020).

24:08 - A breakdown of some of the restrictions in place (based on info from Sofeast's HR manager in Guangdong). People who travel will need to show a negative test within a week of travelling and on return from some areas will have a mandatory 14 days of health monitoring at home. Restrictions could be stricter for medium/high-risk regions, for instance requiring a negative test within just a few days of travelling and, potentially, quarantining outside of home. The situation is changing every day, so by the time CNY occurs restrictions could be different again. 

25:57 - Have any of Sofeast's staff decided not to travel? Yes, although others are waiting until closer to the time to see what happens with restrictions before making a final decision.

27:03 - Key points for importers to focus on during this time. Keep an eye on your suppliers, especially if they're in an area which is moved into medium/high-risk. Also consider sub-suppliers, as if they are locked down it could disrupt your suppliers' ability to fulfil your orders regardless of whether they're at work or not.

27:50 - The situation in Hong Kong. Given that some importers may have suppliers in Hong Kong, too, or wish to travel there, the situation has also recently become complicated due to a couple of localized outbreaks in Kowloon. HK has changed its approach to follow Mainland China more closely, now enforcing 3 weeks of quarantine in a hotel. Visitors can still travel to Hong Kong, unlike China which is only permitting a very limited list of foreign arrivals right now (such as people with a work permit).

31:35 - Wrapping up the episode.

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Andy Bartlett | Good Project Management With Chinese Suppliers From A Product Designer's Perspective

Friday Jan 22, 2021

Friday Jan 22, 2021

In This Episode...

Adrian catches up with Andy Bartlett, an experienced British product designer who has 25 years of experience in product design, development, and working with manufacturers in China to discuss project management best practices when dealing with Chinese suppliers with a special focus on Andy's take on this from a product design perspective. He covers project management tips and techniques, building good relationships, IP protection, and much, much more!

More about Andy Bartlett

Andy has a deep experience in consumer electronics, toys, and more. Several of Sofeast's clients have worked with Andy with good results. He was Product Design Manager at Worlds Apart for 14 years and has designed products for Disney, LEGO, Hasbro and Mattel including Scruff-a-luvs and GoGlow. 

Show Notes

00:00 - Introducing the episode

01:23 - Andy's Bio

02:05 - The 2 ways of engaging with Chinese suppliers: Contract Manufacturers (your 'factory') and Development Houses - When you're developing a new product to bring to market you're likely to work directly with a factory in China and you'll need to go through all of the product development work that has been done and make sure they can deliver, or, if you're at an earlier stage on your project, you may work with a development house first who help you with the development work such as on the product concept and its functions and on NPI work such as deciding on manufacturing processes, techniques, and more. 

03:36 - Dealing directly with a factory as a designer when performing the project management - 2 challenges: 1. Protect your interests (design intent) and be clear about what you want to achieve. 2. Structure, organisation, and well-controlled communication channels. 

06:22 - Dealing with a development house from a design perspective - about managing costs, schedule and exploring opportunities (which they will be more interested in than many factories who are incentivised to get to production ASAP), but still getting to the factory in time to produce your goods on schedule. 

07:55 - The focus on getting to production by factories and why creative people sometimes don't know when to stop 'development.' 

09:10 - At what point do you know that your product development is mature enough that you can start production? 

12:14 - Why approving the tooling is one of the worst times in the NPD process for anyone who's developing a new product.

13:26 - Exploring some best practices when working with a factory or a development house (good for hardware startups who are new to this). New product development is a tough process, so building a good working relationship is really helpful. Look for good communication and contacts whom you can trust (in factories this can be harder) and an inquisitive spirit that is willing to try new things and solve problems.

17:38 - How communication and building relationships have been affected by the challenges of the pandemic. In-person contact is the best way to work with your Chinese suppliers, but in lieu of that, video conferencing is a key tool.

19:47 - The culture of saying 'yes' to everything you request in China and how to combat it with notes and a system to check that suppliers are on target. Importers need to be careful of this, as yes doesn't always mean yes. Therefore any meetings should be followed up with written notes that can double-confirm a supplier's intent and ability. Google suite of products doesn't work in China, but you can create a system to track and manage development issues. Microsoft's software is usually adequate for this. Emails aren't as they're quite ignorable. Build the culture of 'track & trace' and always come back to suppliers to check that they are resolving your question and if it's truly a 'yes,' or in fact a 'no.'

24:44 - How best to manage CAD data and not lose the integrity of the modelling. A flexible pause and review approach to 3D data is a good use of time as this will be worked on until late in the development process.

27:09 - How about IP protection? It's context-driven. If you're in a long-term stable relationship with a supplier you should already have the trust that they use IP responsibly. With a new supplier, do they take steps to protect their other clients' confidentiality seriously if you're visiting their factory to tour it? If so, that's a good sign. If a trusted supplier recommends another supplier this may be a good sign. You should take steps to control CAD data by using software to minimize the amount of data the new supplier can see at an early stage.

30:57 - Why keeping your cool, even when things go wrong, is really important. Maintaining calm and respectfulness is a very valuable skill when dealing with Chinese suppliers, this includes sending a heated email. Consider the context of not being able to visit the supplier and see how busy they are etc, it may be easy to get the wrong idea about what is happening so keeping cool is important. 99% of the time, your supplier is doing the best they can. If your goal is to get the best possible product developed, confrontation with your partners in China may be counterintuitive.

36:06 - The first order with a factory is hard as that's where all the work goes and the most stress occurs, but hang in there! Followup orders probably require 10% of the effort and become easier, perhaps with just small tweaks to the product. So if things are tough initially, it will get easier in future.

38:01 - Wrapping up and Andy's key takeaway for designers of new products. Passionate designers need to remember that it's 1% inspiration and 99% perspiration, so remember to be calm and disciplined.

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Why Do Importers Need Product Reliability Testing?

Friday Jan 15, 2021

Friday Jan 15, 2021

In This Episode...

Adrian and Renaud discuss the topic of product reliability testing. What is this type of testing, when do we carry it out, what are the risks of not doing the testing, and what does it cost? These questions and many more are answered, because today, more than ever, it's so important for importers to protect themselves against expensive recalls and lawsuits which may occur if your products don't reach expected reliability, quality, and, as a knock-on effect in many cases, safety standards.

Ultimately, you'll discover why, for most products, skipping reliability testing during the NPI process is simply not worth it!

Show Notes

00:00 - Introduction

02:37 - A summary of WHAT product reliability is. Some examples are given, in particular, that of a women's razor that must be able to withstand the bathroom and shower environment and also a smartphone which needs to withstand daily use.

05:19 - If a product is NOT reliable, how could this affect the importer? You will face returns, bad reviews, and in the case of failures that lead to safety issues, you may have to recall a batch, be prosecuted in court, pay heavy damages, etc.

06:36 - What typically causes reliability issues in a new product? The causes of reliability issues can be broken down into categories:

  • Design: Poor design is usually the top cause of reliability problems later on. The infamous case of the unsafe Samsung Galaxy Note 7 was down to a poor design that allowed the batteries to catch fire in certain circumstances.
  • Manufacturing: Component manufacturers or manufacturing at the main assembly site can also cause reliability issues. An example is given of specifying the wrong kind of glue that later causes product failure (specifying the wrong materials or components is a type of design failure, too). 

13:00 - Why product reliability is ever more important in these days of the internet when disgruntled users will soon write bad reviews. There is no one product category where users wouldn't complain about an unreliable product. Products for children would be an obvious target where brands can't afford to upset consumers, but on the other hand, something as simple as a takeaway coffee cup could also injure and upset consumers, too.

14:31 - The importance of understanding safety standards when developing a new product and planning ahead for any and all possible failures that could affect consumers.

15:41 - Will hardware startups, who may be new to reliability testing, get any support to define and plan for potential product failures from 3rd party companies (like Sofeast) who conduct the testing for them? Yes, although the developer really needs to understand their own users and how they may misuse the product better than anyone else. We will usually discuss the relevant regulations and potential risks with a customer who is developing a new product where needed, challenge their design and prototypes to assure that they're going in the right direction for their goals for the product, and we also often perform risk analysis and a design FMEA, too. 

17:56 - How to confirm the performance of the product during development.

18:52 - How to push the limits of the product to work towards reliability during development. Some ideas of what to test to simulate the extremes that the product can be pushed to in order to see what fails first. This often uncovers the main weaknesses of a product's design.

20:56 - Reliability and compliance testing during mass production. Samples from the pilot run can be used to confirm that everything is OK with the product design, but also, importantly, the manufacturing process by subjecting them to typical usage over, say, 2 years. Compliance testing should also be done on these early pre-production pilot run samples, too.

24:19 - Why some companies still take the risk of not performing reliability testing. Those with less experience tend to place a lot of trust in their manufacturer, assuming that they will not provide products which later turn out to have reliability issues.

25:43 - The types of reliability testing that may be used. These vary per the product type, but here are some options:

  • Cycling the product from low to high temperature, humidity testing, salt spray testing on exposed metals, mechanical tests like drop and vibration tests, flexing cables, lifecycle testing (HALT), and more.
  • Packaging reliability testing is also a consideration, as it is often a part of the product offering these days and will need to reliably protect your product and its retail packaging during transit and storage. So for this, there will be drop tests, vibration tests, atmospheric testing, and compression testing, and more.
  • Batteries, in particular, will have many types of tests, such as charge/discharge cycling, drop tests, thermal tests, and more.

31:33 - Some real examples Renaud has seen of product disasters that reliability testing uncovered. Products that catch fire (!) are a constant threat and something seen a number of times, but also products which instantly break, scratch or corrode immediately, and more! 🙈

33:52 - Why the worst safety issues often stem from reliability problems. We discuss the link between reliability, quality, and safety, and how they overlap. How reliability is usually focused on during product development and how quality is focused on during manufacturing. If both are handled well, there should be no safety issues.

37:18 - How much does reliability testing actually cost? Most consumer products that are not made in vast quantities the product reliability testing can range between $300-3,000. When companies understand the risks that are avoided by the testing they usually see it as a worthwhile investment.

39:15 - Reiterating why reliability testing is not to be skipped for most products.

41:40 - Wrapping up.

Related content to read next...

Here are a few blog posts about reliability testing that Renaud wrote earlier:

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How To Validate Your Supplier's Factory's Production Capacity (From Abroad)?

Friday Jan 08, 2021

Friday Jan 08, 2021

In This Episode...

Adrian and Renaud kick-off 2021 with Renaud's thoughts on how the coronavirus pandemic will continue to affect manufacturing this year and how things might change once vaccine use becomes more widespread, and then get into the main topic: How to validate a supplier's production capacity, especially if you're a buyer abroad who isn't able to travel to China (or elsewhere in Asia) to do this on-site yourself.

Given that a supplier over-promising on their capacity could land you in hot water when it comes to delivery delays, quality problems, and increased costs, understanding if they truly do have the capacity to handle your order quantities before placing orders is a must, and since there are still tight restrictions for travelling to different Asian countries, not least China, being able to do so from abroad is very relevant for many buyers right now.

Show Notes

00:00 - Introduction

01:44 - Renaud talks about how the coronavirus pandemic may continue to affect buyers from China/Asia in 2021. How the vaccine rollout could improve things, certainly by 2022, and how in China the manufacturing industry continues to operate strongly for most verticals. Will the West start to perform better by Q2 of 2021?

07:54 - Why do we need to be able to validate a supplier's factory's production capacity before we start placing orders? When buying from a supplier you will fit into one of these 3 categories regarding your order quantity and their capacity:

  1. Your order quantity is in the supplier's sweet spot - there shouldn't be an issue with them making this without hitch and being attentive to your needs. This is where everyone wants to be.
  2. Your order quantity is very low and the supplier is quite large - they're unlikely to be flexible, offer special terms, and pay attention to your needs as much as you may like.
  3. Your order quantity is too large for the supplier - this is the danger zone. Some suppliers may accept an order even if they know they don't have the capacity, and this could lead to dangers such as unauthorised subcontracting, rushing to implement new machinery and onboard new staff, and other issues that can lead to delays and quality problems for you.

14:24 - Why in East-Asian cultures, 'yes' doesn't always mean 'yes.' Suppliers agreeing to orders they know they can't handle easily has a cultural factor. Yes, may not mean yes directly, rather it may mean, "I hear you and I'm thinking about it." Also, Chinese salespeople, for example, don't want to disappoint foreign customers so are likely to overpromise rather than say no in some cases.

16:22 - If buyers are unable to visit Asian suppliers right now, how can we assess them from afar? Renaud shares a number of tips, such as using factory auditors, and about how to question them and the kinds of questions to ask (if possible over the phone and with someone at a managerial level), including:

  • Getting an understanding of the supplier's number of employees.
  • Questions about what they buy from outside, such as components and if these are custom-made (more supply chain risk) or not, capacity per day, % of good pieces, etc.
  • Questions about what they actually do in their facility, such as their processes, daily capacity per process, defect rate, etc.
  • What their peak and slow seasons are - for instance, around CNY is a risky time to place orders.

24:35 - If it's possible to get truthful answers to the above questions that is good, but will many buyers get a better result by working with companies who are already on the ground in Asia and can perform due diligence and audits for them? Yes. If your main contact has no idea and their colleagues don't help answer them you may not have success with speaking on the phone, but it's easy to find companies like Sofeast who can go on-site perform due diligence on potential suppliers and validate a supplier's capacity.

26:14 - What actually impacts a supplier's capacity? It is a lot more than just the number of employees and machines that they have. Renaud suggests the following things have an effect on overall production capacity:

  • Staff numbers alone don't mean a lot with the exception of garment factories.
  • The equipment can lead to a lot of output if it's fast and well-maintained, but if there are bottlenecks around it then the output will be slowed down a lot, and the same can be said for equipment downtime.
  • The supply chain will affect capacity - so how efficient are sub-suppliers in the production and delivery of materials/components?
  • Quality has a large impact on capacity because reworking bad batches, for example, takes time away from making the product, thereby reducing capacity.
  • Material and production planning - if things are well-planned to make the operation flexible and optimised with little idle time, capacity also will be optimised. Many suppliers in China won't be this well-organised.
  • Staff training also has an impact, as mistakes lead to rework and operators will work faster, too.
  • Good process engineering makes everything run faster and improves quality.
  • Small tooling and fixtures and automation which is well-integrated can also help speed things up a lot.
  • The warehouse even has an effect, as if operators are waiting for deliveries of new materials/components to be delivered to the assembly line, for instance, this leads to idle time.
  • Engineering change notifications can have an impact, as can making prototypes and samples using the tooling which takes capacity away from production.
  • The mix of products being made at any one time, especially if it's high mix low volume.

35:13 - Is the best way to get a handle on all of this conducting factory audits? A technical process audit is ideal in this situation, as it will look into the real processes being used on-site and the auditor, who is accustomed to the processes being used and familiar with the product type, will be able to assess the supplier's capacity, key risks, ability to reach your quality standard, and much, much more.

36:27 - Wrapping up. Tell us how you've coped with assessing suppliers' capacities from abroad throughout the pandemic.

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