“I have your salary envelope right over here; you can take it when you go.” That’s what he said to me over tea just before I left his office to QC the product. Of course, I didn’t take it. I didn’t even let them buy my lunch. And I don’t smoke or drink so they were a little flustered when I rejected their product and they couldn’t think of anything else to offer me.
Unfortunately, this wasn’t the first time this had happened. And it certainly won’t be the last. But it brings up an important issue—QC integrity.
Do QC get bribed? Of course they do. It’s a naive to even ask. We have fired more QC people in the last 7 years than people we have hired and fired in all other positions in all our offices in three countries combined.
Bribes may be as small as a lunch with a nod to getting a less-thorough inspection or as big as a few thousand Yuan cash pay-off to approve bad product. But every single QC is offered something almost every time they make factory visits. I personally have been offered cash, free product, meals, nights in hotels (with “service”), massages (with “service”), bottles of imported alcohol, packs of smokes, European chocolates and airplane tickets. (The chocolates were the most tempting.)
So the question really should be—who’s paying your QC (the most)? The answer better be you, or you’re not getting the quality that you’re paying for. (Here’s a great article talking about the some numbers and some of the more formal ways you can confirm with you QC and the factory that your QC are not taking bribes.)
Now when I say “who’s paying your QC the most” I don’t mean that you need to match every offer they get or that you need to be paying your QC way above market prices. What I do mean is that you your complete package and working environment better be good enough to retain the best workers and your system better be smart enough to be able to deal with the bribes in the system.
Here are some of the other things that we do to ensure good QC.
1. Have a very clear policy in place for offenders. We make very public examples of our firings when we have proof that QC have accepted bribes. Face is a big deal, and the loss of face it a warning to others in the company that we will not stand for this type of behavior.
2. Do as I do. If you’re constantly going out to dinner with factory owners (even if you are the owner/buyer of the product) while you’re on QC visits you are blurring the lines and will not be able to defend your own actions if your get in an argument with a QC guy. When you are doing QC do NOT ever go eat with the factory owners. This will be really hard for factories to understand since you are a foreigner and their client. But you can be very clear about which hat you are wearing which day, if you want too. One day you are the potential buyer/client. A few weeks later you are the QC—and you can be very specific about what you will and will not do on your QC visits. Factories won’t like this but they will understand and they will agree if you are insistent (kind but insistent).
3. Review your QC’s relationships with the factories and with your own company regularly. This isn’t a sit-down formal interview that is just smoke and mirrors. This is a direct conversation with both the factory and the QC about what’s going on—this has to be a conversation that the QC knows is going to happen regularly so that he is not offended or loses face by it. But you’ve got to review prices, quality numbers and QC performance publicly and carefully to try to keep bribes out of the system—this interview is as much to warn the factory as it is to keep QC people on their toes.
4. Have questionable reports looked over twice. If you get a report that is noticeably different from previous reports (so good or so bad that it’s odd) you need to have someone else go and look at the product again. Make this standard policy so that it’s not offensive and make sure that your praise people for doing things right when/if the second report confirms the first.
5. Have a 2 strikes and you’re out policy. Don’t misunderstand this. If someone gets caught taking money or approving product that is bad they are gone immediately. I’m talking about they go out to dinner with a factory even though they know they shouldn’t but the QC standards don’t change. They still need to be warned—this is not acceptable behavior. Maybe the 1 strike and you’re out is the better policy, but I like to make sure that I’m 100% correct on the facts before I fire anyone and with these types of issues, that’s hard to do.
6. Trust your QC completely—until they give you a reason not too. This is where my philosophy differs dramatically from the idea of most Chinese. Yes, I probably lose money on this point. Yes, I know that I’ve been burned a few times on this point. But I also have a couple of GREAT QC guys and some really good office staff that work harder, I think, because they know that I trust them.
7. Have a foreigner go and look at the product. Even though just being foreign doesn’t make us any more/less honest than Chinese, and even though I’ve been offered bribes before, the “foreignness” of a non-Chinese QC is often enough to disrupt the system/process. Often foreigners don’t speak Chinese and so don’t get the hints (or the factory can’t be subtle in English). Many times, the product is the foreigner’s own product and so there is no way he’ll take a bribe. We’ve even used college interns from the US for QC before—they speak Chinese, they’ll lose their school credit if they get fired/sent home early, they often are engineering or business majors and so have a real desire to learn/understand the processes and due to the short time they’re here they usually can’t see any production run more than once. Foreigners get treated differently. My QC never get invited into the boss’s office for tea or a “rest” before they start working—heck, they often never even get past the reception desk at most factories.
SIDE NOTE: I hear foreigners complain all the time about how hard it is to resist Chinese invitations to drink/eat/karaoke/etc. They say “I’d never do this at home but I don’t want to be rude here.” I say BS! It’s not rude to refuse a gift or a meal/drink that you really don’t want it. Chinese culture says that they have to offer something multiple times so the recipient doesn’t look greedy by accepting, so they offer and offer trying to be polite for you. So yes, you can decline and they’ll probably be relieved, to be honest. I say no all the time. I force my Chinese QC guys to do it too. So why can’t these other foreigners? I think that it’s only as hard as you make it. Really, it’s only hard to say no if you want to go but know you shouldn’t. When you’ve already committed to yourself that you’re not going to go, then saying no is easy. For example, if shellfish makes you sick, it’s very easy to tell the factory “No, I can’t eat that.” If you were on a diet, you could easily tell the factory “I can’t drink soda pop, I need to lose weight” and they’d just give you water/tea/coffee. So why is refusing a night of drinking baijiu any different? All the complaints about how bad baijiu tastes or how boring a night of Karaoke is or how much all the smoke at a bight club/massage parlor makes you sick is something that you can choose to avoid. I have NEVER in 7 years of QC been forced to do any single thing that I didn’t want to do. I have never been asked more than 4-5 times to try/eat/take something after saying no. If you say no and really mean it, in less than 1 minute it’s all over.
General QC Guidelines
1. Have all other factory pieces available for testing. We’ve got a new client that last year shipped in thousands of glass tops from one factory and thousands metal bases from another only to find out that despite correct art spec’s the pieces didn’t fit together! Sending the coordinating parts to the other factory could have avoided this problem before they were all shipped.
2. QC is for what has been done already not what can be done in the future. Often the entire time of the visit is the factory saying, “We can fix that.” But the QC report is about what is done now—and you need to get an accurate report of what they have done, not what they say they can do. You need this report to confirm that changes/corrections/fixes/clean up has actually been done. Often times factory managers don’t want me to record “little” problems because they “can fix those quickly.” But if you don’t write it down, you’ll not ever have the record to confirm the fix.
3. You’ve got to be consistent—if you’re not, they will not be either. If you let stuff slide that is sub standard because “it’s ok, I guess” then they will too. They will be as strict as you are. If you come in, let a few little things slide, get drunk at lunch and don’t do a great job in the afternoon they will do the exact same thing when you’re not there. And then they’ll be pissed off and surprised when you don’t accept the final product!
4. No matter how nice they are, no matter how much discount they offer, don’t every change your standards. As soon as you take a discount for a change they know that there is a price for quality and you will be offered that price for every mistake. Maybe one mistake is minor and you’d honestly rather have the discount than take the time to fix it. But taking the discount once means that that becomes the expectation. And in the future mistakes will be allowed because (if you even catch it) they know they can buy you off.
5. Try to ignore everyone in the factory—wear earphones. Like I said before, there is an excuse for every problem piece and QC visits are often just one manager after another telling me why they didn’t get it right this time and why they will next time. I choose to pick my conversations—I often wear earphones (sometimes with no music/news even playing). This way I can talk about everything that I want to and ignore the rest. 4-6 hours of QC are much more interesting with music or PTI or whatever on your iPod anyway.
6. One QC visit is NOT enough. At least three to be confident. At the very least you need to do one in-line visit at about 20-35% completion. You need to do another when it’s all done. And you need an third for packaging and container loading confirmation. I know that some professional testing companies suggest up to 9 tests/visits starting with samples and raw material test and ending with the container confirmation. I think that for many SME’s this is just too much money to spend on a small order. But you must weigh the risk of the whole order being rejected by customs (or by you) if you don’t do test/QA. Do as much as you can afford, not as little as you think that you can get away with.
7. DON’T EVER BELIEVE THE STATEMENT: “Oh, we thought you wanted B or C grade product. If we knew you wanted A grade there wouldn’t be so many rejects.” Every time that a production run is rejected for having too many major or critical issues we get this excuse. “You should have told us before that you wanted the higher quality goods.” No, if you’ve done your pre-PO work correctly, all your standards should be set out clearly and agreed to (signed and chopped) before you ever get to the in-line QA. Use your contracts. Even though no one in China will ever look at them once you’ve paid a deposit, you included all the details for a reason—and a failed QA visit is that reason.
Here are some good questions to ask your 3PQC.
Here are a few other good blogs for QA/QC information:
3PL Wire
Quality Wars
Chief Asia Inspector
MOVED FROM THE TOP DOWN TO ACCOMMODATE NEW LINKS
Two quick notes about Dongguang before the QC blog.
First, a photo and note. As I was out at a factory in Dongguang today I saw lines of people looking for work 
outside most of the factories we drove past. This is just one that we happened to stop in front of in traffic long enough for me to snap a quick photo. I counted 25 people or more outside multiple factory gates. I haven’t seen this since 2005.
Second, a security note. Two other people (who shall remain nameless), while in a different part of Dongguang today, saw a group of people on the side of the road hack another person to death (at least they think he died) with a machete. They kept on driving, sped up even, to get out of there as quickly as possible.
If you have money or are alone I would highly recommend that you DO NOT go out at night in any of the industrial areas outside of Shenzhen. This would include Songgang, Dongguang, Longgang, Bao’an, Guanlan, Shiyan, Huizhou and other areas with tons of (unemployed) migrant workers and not a lot of policing or economic development.
I’ve seen fights, I’ve seen people get robbed and beaten, I’ve seen a woman and child get run over by large dump trucks, I’ve even seen a dead body on the street (at least I think it was dead), I’ve had family tell me about kidnappings they’ve seen, I’ve had family robbed at knife point and I’ve been pick-pocketed numerous times myself. I’ve had clients tell me about huge gang fights they’ve see while making side excursions in shopping malls! I even chased down and dragged to the police station two guys who tried to steal my bike once. But I’ve never seen anything like this before.
You need to make sure that being here is really worth it for you. And if you are staying here, you need to take the security threat seriously. The risk is increased with more and more unemployed people loitering around.
(Here is a contextual update to the stories of violence related above–necessary since I’m getting tons of “the sky is falling emails)
Now on to the QC portion of the blog (this was what I really was going to blog about today–before the other two events happened).
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4 Feb Update: h/t to Michael S. for sending me this Economist article about Dongguan today in response to the Dongguan stories above.
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Tags: Business, China by David Dayton
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