Tuesday, September 23, 2008

Tainted Milk Crisis and What You Can Learn



The pictures and stories about kids with painful kidney stones from tainted milk are extremely difficult to see and read. I can hardly imagine how mad I would be if my children were in such pain caused by a (seemingly) intentional act. Of course, those responsible should be prosecuted to the full extent of the law.

What can companies outsourcing to China learn from this latest crisis? Here again are my suggestions for avoiding quality problems in China:

1. Build a relationship with the supplier. All the detailed specifications in the world cannot protect your company from an intentionally bad action. Getting to know your suppliers and allowing them to know you and your company builds trust and shared values. OPSA has always encouraged our customers to get to know the factories we use for them and to visit as often as they want.

2. Have detailed specifications. They are still important. Supply contracts are an extension of your documented expectations and can also be helpful.

3. Get third-party inspections. Catching quality problems when you open the container is better than having your customers find them, but finding them in China before they leave the factory is much better. Because of the distance and cultural differences involved in dealing with Chinese suppliers it is very important to have additional inspections.

4. Communicate early and often. In addition to your specifications you need to be in consistent communication with your suppliers (or the link to your suppliers) to make sure all is well.

5. Finally, be a good partner. People cut corners when they are desperate. Listen to your suppliers. Be open to investigating when they say cost pressures are impacting their ability to service you well. "Bully" purchasing may get results in the short-term, but in the long-term is a losing philosophy.

Let me know if you have specific questions about quality assurance in China and I'll do my best to help.

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