David Collins, CMC’s Consulting Director, explains the three priorities for most Chinese manufacturers that need to improve. They should focus on these elements:
- Labor productivity
Today let’s talk about the overall manufacturing process and what’s really critical to making a good manufacturing process roll.
Obviously, the quality of the product is very important, and here in China frequently the managers think it’s “good enough”. They’ve been trained that way for years and years of getting out product that they needed very quickly to the very low-end markets that they were going towards. This is no longer true. China is becoming a much, much higher level place and the whole “good enough” attitude has to go away. In quality we see this a lot here.
The other thing is maintenance. Maintenance has never been a strong suit here in China. The ability to buy cheap equipment and then let it fall apart, and then buy cheap equipment again, let it fall apart, has been great. But recently we start to see that, as standards get higher here in China and as the overall quality and cost standards get higher, preventative/predictive maintenance is going to become very, very important. You can’t just let your production stop. No way to lose more money than not making product that day! So if your production stops, your machines aren’t working, things aren’t happening the way you need to do. You’re not making the product. People are sitting, doing nothing, while you’re fixing the machine. You have a huge mistake going on, and that needs to be fixed. Preventative and predictive maintenance need to become part of your corporate culture.
Secondly is how is the line set up? You can’t just throw people any more on the line and just say, “Oh, it’s cheap. I’ll just add 10 more people, 20 more people.” Chinese labor, as of last January, has surpassed the cost of Mexican labor now. So you might want to start thinking about how do you start to become efficient.
As you know Western Europe and the United States are the most efficient labor users in the world. China needs to start to grow that way if it’s going to grow its middle class economy and continue to move. So setting up the lines efficiently so that the people can do their work in a very good manner and a manner that doesn’t allow for a lot of waste from motion, from scrap, from setting, all of those things are important in putting the product together.
When you put those three things together, you start to get production numbers coming off the end of the line with high quality that you can bank on that are going to come to your customer when you want them. No more three-month waits, no more 30-day waits, no more saying, “Ah, I didn’t get it finished. We’ll ship it in a couple of weeks,” which is also something we’ve commonly seen here.
With those three things together, quality standard, maintenance, and good line setup, you can get your products on time the way you need to have them.