7 Days in China-years can seem like a lifetime.

Some weeks are better than others.  Some are just down right awful.  This last week was one of those weeks, where everything goes wrong.1. A Fight!  A Fight!  One of our factories has been complaining since we paid the deposit that we are too strict with our QC.  We’re not doing anything out of the usual (for us) but the factory is just not doing what they agreed to before we every paid them a deposit.  This isn’t new, we have this argument all the time.  What is new is the fight that our QC manager and the factory got into—actual fisticuffs!  I’ve seen many a screaming match.  I’ve seen gang fights on the streets.  I’ve seen brawls on the bball court and I’ve seen people get chased out of town with machetes or butcher knives.  But I’ve never seen factory professionals in white shirts and slacks go at each other with their bare knuckles.Luckily, we had a second QC engineer in the factory that got in the middle and broke things up and mediated the immediate situation.  But we still have an active project.So what to do?We are always very clear that we support our QC people so that there never is a question as to who defines what acceptable quality is.  Also, we also try to be honest and fair with factories—we need them to do business.  And since we make money on re-orders, it make sense to keep them happy during/after the initial is being produced.  So we have to balance these to things by not sending our manager to this factory again, but also not giving in to any of the lower quality standards that the factory is trying to get away with.  This way both parties save face.  Someone else comes in to negotiate the argument for us and the factory manager gets face.2. We had an employee take off for maternity leave.  Of course we knew that this was coming and so three months earlier we hired her temporary replacement—thinking that we could keep both once the new-mom returned.  So after a three-month investment into the new lady and only three weeks into the 2-month maternity leave the replacement tells us that she’s leaving too.  “This job is not what I expected it to be.  It’s too hard.”  You didn’t realize that 1 or 2 or even three months ago?3. After a couple of frustrations, we decided that we need to have a back up for our international shipper.  For the most part, we’ve had a good experience with the old company, but they’ve made some changes in their staffing of their China office that have cause a few problems and made us a bit uncomfortable lately.  So we’ve been shopping around.  Well, of course the old company realizes what’s going on as we try out other companies’ services.  But instead of calling us to see what they can do about the relationship and see how they can keep our business, they go the opposite direction.  They call us, tell us that if we’re going to be using someone else they not only wont give us terms on any new shipments but that ALL shipments currently in transit will be held in the port of entry at $150 a day until all outstanding bills are paid in full.  This amounts to more than 10 container loads worth of shipping bills (current shipments and shipments still under payment terms), so it’s a substantial number.We’ve had this happen before—twice as a matter of fact.  Because of the rules regarding shipping companies in China, they are usually set up independently or at least relatively autonomously from their foreign “home” offices.  This means that they have independent billing and collections, customer relations rules/norms, service centers, etc.  It also means that when it comes to where you’ll be paying your bill they are basically competitors with their own companies in other countries.  The China office always want you to have a “China” account and pay in China, that way the get more of the money.  Sometimes they make up some story as to why we need to change our billing to China.  Other times they are just flat out honest about their dishonesty—“You pay in China or we won’t show up for package pick up or delivery.”  One large shit-colored company has a rather bad reputation for holding shipments hostage until companies with offices in China change their billing to the China company’s billing system.Good thing we had a couple of back up 3PL’s ready to go!4. Different price, different quality, different sizes—same PO.  Yup, that’s what we got when we ordered a small qtty of stock items for a larger project.  They shipped less qtty, larger sizes and at a higher price than what we ordered.  When we called they said, “Sorry we were out of what you ordered.”  We asked if we could send it back and we’d wait until they had what we ordered.  They said that since it had already been shipped to us (from one Chinese city to another) that they wouldn’t take it back.  Of course we argued that we didn’t ask for it (the wrong order) to be sent to us, but that went no where.  Yup, we had to order it again, from someone else.5. Factory refuses QC visit.  We use Asia Quality Focus for specific engineering-QC needs in locations across China where we don’t have our own employees.  We order man-days and they show up and do a great job.  Sometimes, too good.  Last week we had a factory call us and say that the 1. The independent testing company (not AQF) that rejected the product because it didn’t meet spec’s is wrong and that the pipes are correct.  And 2. The AQF QC engineer was too strict (boy, never heard that before) and was “trying to find problems” rather than “approve the order.”  Never mind the fact that we do not hire QC to either find problems or approve orders—just check orders.  Or that pipes are tested electrically and the process is standardized.  Or that the QC and testing company are not related.  Or that the same QC engineer never goes back to the factory twice.  Or that they get paid salary, not by the day.  Or that the factory agreed to repair/replace/finish everything that was marked as “fail” on the QC report anyway.  The factory says that they won’t do any orders again that require independent testing or 3PQ—that pretty much means they don’t want any more orders from us.6. Factory says that if we don’t change to better materials, they won’t do the re-order.  Factory is complaining that there are too many rejects because the quality of the materials are poor.  Of course, they sold us the “best” quality materials when we placed the first order and that’s why the costs were higher.Now, we’d be glad to upgrade as long as new materials pass the same tests as the previous materials.  And as long as the new materials match the same look as the previous product that has already been sold.  But, while tests have been passed, “look” to match previous production runs is NOT the same.  The factory can’t figure out why different colors of the same SKU number are a problem.  Client can’t understand why the factory thinks that this is acceptable.7. Rejected materials equal retaliation.  A new buyer called us this week with a problem—production is done, but the quality is not acceptable and so the buyer doesn’t want it.  But the factory won’t do anything for them unless they buy it or pay about 2x as much for a re-order.As much as I rail on factories for not doing what they agree too, this is not the factories fault (well, the poor quality is but finding out about it when the shipment is ready to leave China is NOT)—checking product for the first time only when it’s already done is just not a smart way to buy product from China.The longer you wait in the production process to do QC the more difficult it will be.  We never advise any clients to just do a single day of QC at the end of the production process—it’s just a waste of money.  At that point, when everything is completed and ready to ship, you really only have two choices—accept or reject.  And if you reject product that is completed it will be sold to re-coup costs, you’ll probably not be able to get any of your deposit back and you won’t be offered a re-order since they don’t trust that you’ll accept it or pay for it.  From their point of view, there is no security in working with you if you’re not going to “partner” with them—which means that you recognize their investment and make one yourself (pay the balance and take the product).  From a safety perspective you just don’t ever want to be in the position of seeing your product for the first time when it’s already completed.