CSCMP's Supply Chain Quarterly
July 22, 2018
Forward Thinking

Poorly made in China

Comment
Although the furor over the quality of some Chinese-manufactured products seems to have died down, such problems remain a concern for many companies.

Although the furor over the quality of some Chinese-manufactured products seems to have died down, such problems remain a concern for many companies. For supply chain and procurement managers who do business in that part of the world, a new book, Poorly Made in China, offers food for thought. Author Paul Midler, who is fluent in the Chinese language, spent a number of years in China as a consultant. In the book, he describes his experiences in bringing together Chinese manufacturers and foreign importers in search of low prices.

Among the practices Midler observed was the tendency by some Chinese manufacturers to offer very low initial prices to get contracts from foreign importers. Once the deal was signed, he writes, the manufacturers looked for ways to cut corners in order to increase their profit margins. The practice is so pervasive that it even has a name: "quality fade." In addition, as soon as the importer became dependent on the supplier for a particular product, the manufacturer would abruptly raise prices, knowing that the customer could not easily walk away from the relationship.

Midler notes that Wal-Mart Stores Inc. often changes its Chinese suppliers to maintain quality. But most importers are not in the same position as the giant retailer, and only the savviest can exert sufficient leverage on their suppliers to keep their prices low and quality high, he writes.

Published by John Wiley & Sons Inc., the hardcover edition of Poorly Made in China (ISBN: 978-0-470-40558-1) sells for US $24.95.

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