[googlryas]

If you ever try to get something built in China, you really need to know what you're doing, or the manufacturer will violate your specs all over the place in order to profit an extra 1/10th of a cent per unit.

But, big companies don't really have that excuse, because they should know what they're doing.

[ajsnigrutin]

Yep, suddenly they will change the type of plastic used, changed the ratios of plastics, use less copper (wires, pcbs), replace the brand name electronics with cheaper knockoffs and qa rejects from other factories, replace the type of glue, etc. Basically you need a QA team there to monitor every step of the production, or they'll try to screw you everywhere they can.

[arecurrence]

Reminds me of even Apple recently having problems with one of its suppliers pulling a bait and switch on lcd screens.

[solarkraft]

This sounds like perfectly efficient capitalism. Is it really not this way in other countries?

[jefftk]

You negotiate for one grade of steel, initial runs are that grade, but over time some manufacturers will start substituting a cheaper grade and hope you don't notice ("quality fade"). In most countries employees would see that as unethical, and companies would risk whistleblowing and fraud suits if they went ahead anyway.

[ajsnigrutin]

Yep, there's a great book "poorly made in china" [0], where they describe the immaculate production facilities, hygene standards, etc... and after a short time, stuff like this:

> Bernie was disturbed by the finger-in-bottle exchange, when I told him about it. “I hope they are washing their hands, at least,” he said. Since the bathrooms had no soap, I told him that it was not likely.

> I explained to Sister how this could be a problem. She told me that she understood and would address the situation.

> “I will tell the workers not to put their fingers in the bottles when you are at the factory,” she said.

....

> The hair gel that we produced at the factory was green. One day, I noticed that the worker who filled the gel bottles had a skin condition. His hands were covered with the slick formula, and beneath the green, shimmery layer, I could see that the skin on his hands was peeling. Small, raw patches of flesh were exposed, and you didn’t have to be a dermatologist to see that his skin was infected.

> “We should probably do something about this one,” I said to Sister, trying to sound calm, while in my head alarm bells were ringing.

> Sister did not see the point. “Why?” she asked.

> “It might be a health issue?”

> “But the worker has done nothing wrong. It’s just an allergic reaction.”

> Trying to press the matter, I suggested that the worker might contaminate the product.

> Sister twisted around the argument. “How can he harm the product when it was the product that caused him the harm?”

etc.

[0] https://www.goodreads.com/en/book/show/5116296

[tick_tock_tick]

How is fraud capitalism? A effective and working contract law system is one of the corner stones of capitalism.

[eru]

We have to be careful to distinguish between capitalism as an ideal, and as a description of what happens in the real world. (The same applies to socialism or any other -ism.)

Otherwise we will just engage in 'No True Scotsman' fallacies.

[chmod600]

True, but fraud is not at all specific to capitalism in practice or theory.

[eru]

I agree with that, but not everyone does. So at least being careful about _is_ and _ought_ (or practice and ideals) makes that discussion slightly less unproductive.

[solarkraft]

You'd probably agree that maximizing profit is a corner stone of capitalism. In practice this principle is way above staying within the bounds of morals or laws.

[throwaway9870]

No, perfect capitalism would include having perfect knowledge of the product, which is exactly the opposite of this situation.

[s1artibartfast]

This is definitely the case in med tech, devices and Pharma. Many manufacturers avoid China because you can set a spec but you can't trust the outgoing QA testing. You can do incoming QA testing, but then you are double testing and losing a lot of efficiencies when those things would be best done at the supplier

[londons_explore]

You do spot incoming QA testing.

And if you find any issues, you test the whole shipment.

And then you compare the results to the outgoing QA test results.

And if any results can't be explained by failures relating to shipping, then you fire your supplier.

You let them know ahead of time that this is the procedure you'll apply, and then they'll do proper QA testing.

[s1artibartfast]

In these industries it might take 5 years to switch suppliers. There are also specs that can't be tested at the finished good level, even destructively.

[eru]

Yes, that makes it harder.

You should probably run with multiple suppliers in the first place, so it's easier to switch between them? Of course, that extra overhead probably will eat into your cost savings.

[s1artibartfast]

People do that too, but even with all these mitigations in place, the risk just isn't worth it.

No major medical company wants to risk recalling defective product by using a disreputable Chinese manufacturer. Unknowingly selling counterfeit product is a pretty bad look to the FDA and consumers.

This is the main reason why many procurement departments have a no China policy.

[throwaway9870]

QA testing is easier said than done. There are few firms the in the world that could do complete QA testing on a TV for example.

[nazka]

Ya for instance protein supplements. If you didn’t know you have to be very careful about the origin and the process the company use to produce those. But because it’s very hard to test even with an independent testing company, you have all kind of speculation about which company to avoid and the ones that are good because you can never know. So if you see one company doing shading things or not being 100% transparent then even if the production line is fine it’s still casting enough doubt in the “expert” users to avoid to buy them. And again testing was easy then all this won’t be here. We will just test the protein powder and that’s it.

[MichaelZuo]

Mass spectrometry is relatively common nowadays It’s more likely no one wants to pay the hundreds of thousands or millions necessary to do a full test of a single supplement.

[stacktrust]

Milwaukee (TTI) is vertically integrated, i.e. they own their factories in China.

[JumpCrisscross]

> they own their factories in China

This isn’t as protective as one would imagine. Unscrupulous floor managers will still swap materials, run the crap and sell the good stuff.

[stacktrust]

Wow. How would floor managers benefit from that kind of swap?

[natpalmer1776]

Same way it happens outside china in other industries. You know a supplier who sells material / service for $BUDGET minus X, in exchange for swapping the PO you get a portion of X from the supplier via back channel means, while company is now paying $BUDGET for lower quality material / service that costs supplier less.

[karmicthreat]

Because the factory manager is the one selling product out the back door.

[bobthepanda]

By pocketing the difference.

[stacktrust]

Ah, pocketing the delta on input costs. Hopefully the drop in output QA metrics would be detectable via software.

[bobthepanda]

You also need to make sure QA is actually on your side, and vigilant.

As they say, heaven is high and the emperor is far away.

[umeshunni]

They sell the higher spec ones on the side to their buddies?

[stacktrust]

Wouldn't the lower spec ones fail QA checks on factory floor?

[fn-mote]

And as the other posters tell you, possibly failing QA checks is not stopping profiteers from attempting these kind of changes. Constantly. It's a numbers game. Expected profit based on how long until your swap is discovered.

[AnimalMuppet]

Not if the floor manager controls the factory floor QA checks...

[solarkraft]

... that's possible? Don't companies from outside china have to set up joint ventures with a chinese company?

[arecurrence]

Milwaukee is owned by Techtronic industries, a Chinese company