Illegal vs. Unavailable
Skype is now technically illegal in China. Read here for more details. But that, like just about everything else from religion to prostitution that is also technically illegal in China, doesn’t mean that it’s not still available.The two lines from the article that can be applies to many things in China are these.
- “The likeliest motivation for banning Skype and other cheap-as-free-internet-calling services that are not owned by the government is that it is trickier to monitor phone calls if you don’t actually own the service.” This, and of course, if you don’t own it it’s that much harder to make money from it as well.
- “Of course, with the Internet, making the law is one thing, and enforcing it is another.” This is quintessential China--the “best laws in the world” and absolutely no enforcement whatsoever. It’s always been like this--kill the rooster to scare the chickens. The goal is just to scare “most people” into staying in line.
Business in China is often the same. Possession is nine tenths of the law, meaning: only if you’ve bought the means of production (anything and everything from the art to the molds to the actual factory) you will have a much better chance of getting what you want. And even then it can be a struggle. This one thing is for sure, without that ownership very clearly “yours” you can be assured that someone else will be controlling it and making a profit from it.In China there is a severe lack of respect for the individual and subsequently the individual ownership of the methods of production. I don’t know if it comes from the collective society, the overlay of government socialism, the scarcity of opportunity or just a lack of understanding of (western) individual rights. Regardless, if you “partner” with your factory to develop molds, or if you have your factory design a product for you they will often feel (or at least act like) they have at least some ownership of the product. That means that if they’ve spent time or money on “your” product and they are not satisfied with the ROI (and let’s be honest, who ever is?!), you will see “your” product elsewhere.The second point hits directly to the heart of production in China--if you’re not there monitoring or, at the very least, doing spot checks via 3PQ you cannot with any good faith be assured that you’re going to be getting what you ordered.You can have the most detailed and finely finessed PQM ever made, but if you’re not there to make sure that each step is followed, it won’t be followed. You have to devise step by step incentives to make sure that the important processes are followed.
SIDE NOTE: “We won’t pay if it’s not correct” is not really an incentive. It’s actually the opposite, it's a disincentive--motivation to cut as many corners as possible. If from the beginning you’re threatening to not pay, what incentive does the factory have to invest in everything you’ve requested? They would rather hedge their bets and put in the cheapest possible components out of the fear that you’ll not pay (they’ll then sell the product to another client or into the local Chinese market).
So... assuming that you're not in China to do it all yourself, what do you do?Scheduled third party testing gives you significant presence in the factory but only if you’re testing both before you start production and during production. Leave either of these two testing times out and you’re in for a serious fight. If you only test samples before production you’ve not only wasted your money but you’ll never know if the factory has meet those standards in Production. If you only test during production and you have previously approved, but non-tested samples to start production you’d better pray things pass. If they don’t the factory will tell you that they meet the approved standards and it’s your fault for not testing the samples before approving the start of production (which is true).Third party management can be a huge value if you’re out of the country and expecting things to be done correctly. Not only do you have the value of fluent English, but someone that is responsible for the quality of the product outside of the factory but inside China!The key to 3PQ, testing or an outside manager is to tie the PO payments to the reports/results from these 3P agents. For example, QC is of little value if the factory will get paid regardless of the info in the QC reports. Similarly, if the factory can “work with you” directly and can ignore the requirements of the project managers you’re going to get exactly what you can see over Skype and not what you’re paying your management company to do for you (i.e. you’re not going to get what you ordered).