4/10/2018

The Right Way To Approach Production Automation

Founded in 2005, Sunchine Inspection is one branch of Sunchine International; a Hong Kong based multinational company specializing in export-import consulting and quality management. Today, with two offices in China mainland and one office in Europe, Sunchine Inspection has become one of the best third party inspection companies in China, serving over 1,500 regular clients in various fields from all the Continents in the world.
The Detroit Free Press just published a good article, Robots descending on Michigan industrial workplaces in record numbers, that describes what happens in the US but has a lot of significance

BY RENAUD ANJORAN
for Chinese manufacturers too.

Let’s go through a few excerpts, one by one.
The immediate future is likely to be a combination of human workers amid automation and not a “lights out” factory devoid of people entirely.
Very true. General Motors fantasized about ‘lights out factories’ in the 1980s and failed miserably. It is not the right “True North” to have in mind.
[Robots are put in place for] focus on tasks that are “dirty, dull and dangerous”
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Yes! These are the tasks to automate in priority. Other tasks are usually best done by humans, aided by smart semi-automation, by mistake-proofing systems, etc. In some cases it is better to go to full automation, but that cost-benefit analysis should only be done after all the low-tech improvements have been made.
New robots come with “eyes” designed to allow them to scan parts for defects.
Vision systems have been used for 30 years and the hardware is now inexpensive (for most applicable, at least). These systems are a must for robots to recognize and pick the right parts, to recognize defects and put them aside, and so on.
Reduced regulations allow factories to drop some of the protective cages that once encased robots and kept them far from human workers. Now, some co-bots can work alongside assembly line workers, armed with motion-sensor technology and warning lights that make them slow down or even stop moving when a human gets too close.
This allows for the gradual replacement of low-skill assembly jobs by automated systems. Let’s face it, young generations prefer other types of jobs.
Last week I wrote an article about the right approach to production automation in this article: How To Get Your Manufacturing Automation Timeline Right. I introduced the 5 levels of automation and “the great divide” between steps 3 and 4.
What do you think?
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Why Supplier Self-Inspections Are Getting More Popular in China

Founded in 2005, Sunchine Inspection is one branch of Sunchine International; a Hong Kong based multinational company specializing in export-import consulting and quality management. Today, with two offices in China mainland and one office in Europe, Sunchine Inspection has become one of the best third party inspection companies in China, serving over 1,500 regular clients in various fields from all the Continents in the world.
BY RENAUD ANJORAN
In 2005, when an importer asked their best manufacturer for a report that shows their own inspection findings, they seldom received a document. They were usually told “no problems were found”. Getting a few digital photos by email was already an accomplishment.
Things have changed. In most industries, the best manufacturers are used to producing QC inspection reports for their internal use. There are several reasons for this:

It is a management tool — quality keeps production honest, and shipping a substandard batch requires multiple sign-offs.
The factory top managers have understood that savings a few bucks today and getting heavy chargebacks (or even losing a significant customer) in 2 months is not good business.
They sometimes decide to share their own reports with customers, as an attempt to avoid being inspected (since welcoming an inspector, unpacking, repacking, etc. takes a lot of time). And sometimes it works.
As a rational purchaser, I would certainly want to look at the opportunity to reduce, and maybe even eliminate, the QC inspections performed in the best factories that ship products for me.
From my discussions with a number of quality and procurement managers in China, more and more of them are coming to look at their supplier base this way:
Supplier self inspection best case
Category 1: low volume of business
These suppliers only ship products irregularly. The amount is low. Purchasers don’t even know if the same manufacturing facility is used over time. It doesn’t make much sense to get to know them better. No change for these ones!
Category 2: low quality risk based on historical data
These suppliers have demonstrated that (1) they are not likely to play games, and (2) their product quality is consistently good. As a reward, they can be extended a higher level of trust. These are the best candidates for supplier self-inspection.
(Let’s face it, random inspections don’t catch all issues. I wrote before about the 5 main limits of AQL inspections. It is an imperfect tool.)
This can be done in combination with a skip-lot inspection program (the buyer can decide to check 20% of the batches before shipment randomly and with minimal prior notice, for example).
Unfortunately, this category of suppliers might represent 10-30% of the total purchased amount. What about the other suppliers who also represent a substantial flow of business and that are not really good?
Category 3: suppliers that need to improve
You still need to pay for the inspections of their products, and pay for their quality issues (whether you detect them or not, they create delays, arguments, etc.).
But hopefully you want them to get better over time. If they show positive signs (the boss is motivated to make changes etc.), it might make sense to help them.
What you can do as the buyer
Try to set up an overall supplier development program. You could look at the categories 2 and 3 this way:
Supplier improvement program virtual circle
How can you push some suppliers for improvement? Here are a few basics…
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You need regular monitoring and data collection:
Audits of the factory’s quality system and processes
Most common defects per process/product type
Based on these data, corrective action plans can be set in motion and their effectiveness can be followed up. If they do this seriously, and if they get help where necessary, they can probably be awarded the privilege of self-inspections.
Now, letting a supplier check their own product quality should only take place under certain conditions. And there will always be limits to that approach. I’ll write a follow-up article on that… https://www.sunchineinspection.com/

The Electronics Market in Shenzhen: Everything Is Possible?

Founded in 2005, Sunchine Inspection is one branch of Sunchine International; a Hong Kong based multinational company specializing in export-import consulting and quality management. Today, with two offices in China mainland and one office in Europe, Sunchine Inspection has become one of the best third party inspection companies in China, serving over 1,500 regular clients in various fields from all the Continents in the world.
By Fabien Gaussorgues
Last week I came across the video of an amateur trying to build an iPhone on his own in the World’s electronics center, in Shenzhen (and more precisely in the HuaQiangBei area). This video can be found on Youtube (https://youtu.be/leFuF-zoVzA).

That American was able to build a working iPhone without any specific phone knowledge, without (barely) any electronic background, and simply by walking around from street shop to street shop.
I have been to this place hundreds times myself. I know it is exuberant and exhausting challenge. And yet it is possible. What he posted in that video is actually very realistic.
For people who have never seen it, it might looks like a typical story from a low-cost country (kitting refurbished parts together to make new products) but the reality is totally different.
The Huaqiangbei area, also called “Seg Market” or “Shenzhen Electronic Market”, is without a doubt the largest electronic market in the world. It was initially centered in the city’s tallest building (at the time), the SEG Plaza. The market is now hosted in tens (hundreds?) of buildings on multiple floors around that building. See the map above.
This area gathers all electronic-related items, from basic raw material to electronic components, spares, and complete products of nearly any kind (and including their accessories). In this article I will answer the most common questions I am asked about this market, and about Shenzhen as it relates to the production of electronic products.
Q: Can I get cheap and good-quality products in that market?
Yes, this is possible.
There are a lot of very poor quality products, and some can be considered as scams. But if you have time and you know how to navigate the market, you can find astonishing products for very low prices.
Q2: Can a buyer always negotiate the price?
You need to do your homework and have an idea of the price and the quality you need. Some suppliers add a 200-300% markup and can be asked for a discount. Others will not discuss about a discount, even for high volume orders.
Q: Can I find factories there?
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There are many traders on that market, but also many factories that rent some space and distribute their products.
Surprisingly, the visitor simply needs to ask “are you a trader or a manufacturer?” and will be told the truth in most cases.
Q: I want to develop a new electronic product. Is this market useful?
Yes and no.
It is possible to find ideas and various components just by walking around. You can find suppliers, get prices, and be given samples there. For prototyping, it can be an invaluable resource, as everything can be found locally (including, tools, measurement devices, and shipping materials).
One can also find manufacturers willing to assemble your product, as long as the quantity is reasonable.
Over the past few years, I was able to help many company move their projects ahead thanks to this level of convenience.
Q: Is it well organized?
Not at all!
There are location, or entire buildings, dedicated to certain products (e.g. cameras, computers, phone accessories…). But, in general, one can find everything everywhere.
In addition, it is nearly impossible to go through all the booths of the market! It would take months. Most shops are small booths of 2-3 square meters. Each building can have more than 100 stores per floor. It is possible to find special items, but it can be time draining also.
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Q: Is the electronic market going to move to South Asian countries?
I hear that question more and more. I don’t believe so.
What I see is more and more Western startups coming to China to speed up their product development.
The electronic market is actually not only in the Huaqiangbei area. There is an entire ecosystem built around electronics. In Shenzhen and Dongguan, an R&D team can find suppliers for all the parts they need: plastic, metal, components, PCB, accessories, cables, but also design houses, laboratories, shipping companies, and more.
Everything is in place for developing, producing, and distributing electronic products all around the world. It makes Shenzhen a place that simply cannot be avoided for the years that come, at least in this industry.
Q: Can I get by if I can’t speak Chinese?
The electronic market is full of foreigners with no Chinese speaking ability! Yes it is possible, and many shops employees can speak some English.
However, you will limit yourself to a higher proportion of traders (vs. manufacturers) and international companies (vs. local companies).
Q: Can I find the same components as in the iPhone, Samsung S8, etc.?
The components from these phones can be classified in 2 categories:
Copies — it is very easy to find cheap copies with similar quality, but it requires a deep understanding of what is acceptable. Let’s take LCDs as an example. There is a test to confirm the touchscreen performance by rapidly navigating all around the screen. If you skip that test, you might purchased a very low quality LCD.
Original parts — either smuggled from the Chinese factory, or from a used/refurbished phone. Both are generally OK from a technical standpoint, but should be handled with care!
Q: Am I likely to be scammed? Is it possible to “test” the components before buying them?
Yes and yes, definitively.
If you cannot test 100% of the parts before buying them, you will be scammed. For example, Bluetooth keyboards can work fine in the shop, but will disconnect systematically after 3 seconds of idle time once you get it to your office.
The seller will generally replace the wrong unit with a good one if you go back and complain. Make sure to keep the invoice and to write down the exact location!
Q: Is it better to buy small quantities? High quantities?
This is the beauty of this market. You can almost walk anywhere and ask for 1 piece. It works 90% of the time.
It is a wholesale electronic market, so quantity is rarely a problem. Make sure you control quality, as I wrote above.
Also, since many shops are operated by manufacturers, it is possible to customize the products (logo, color, shape…) if you purchased sufficient volume.
The best way to get familiar with this market is to spend one day there, looking around at all the opportunities. It is a unique experience.  https://www.sunchineinspection.com/

Sourcing from China 101, Part 1: Do You Need a Sourcing Agent?

Founded in 2005, Sunchine Inspection is one branch of Sunchine International; a Hong Kong based multinational company specializing in export-import consulting and quality management. Today, with two offices in China mainland and one office in Europe, Sunchine Inspection has become one of the best third party inspection companies in China, serving over 1,500 regular clients in various fields from all the Continents in the world.
BY RENAUD ANJORAN
A few years ago I wrote a 15-part course that was sent automatically, lesson by lesson, to interested readers. These days, such autoresponders are a thing of the past and we will switch to something different. But, rather than ditching these courses, I will update them a bit and publish them, one at a time. They are still quite relevant to new buyers. 
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If you are starting to buy from China, your first decision will be: should I manage this by myself?
If your team can’t dedicate 1-3 hours a day (per supplier) to follow what happens in China, you might need help from a sourcing agency that can handle these tasks:
  • Identifying new suppliers that can make your products at the right price and quality levels;
  • Helping develop new products/styles with these suppliers;
  • On-going management of the supplier relationships (communication, quality control, shipments follow-up, crises if any).
You actually have 4 options:
Options: Sourcing Agent vs. Buy Direct from China
1. Purchase direct
This is what 80% of importers try to do. They want to control the whole process, and avoid paying commissions to any middleman or agent.
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If you are organized enough to manage suppliers (as you will learn in the next emails of this series), and if you can satisfy the minimum order quantities (MOQs) of suppliers, this is probably the best option for you.
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2. Use a commissioned agent
Thousands of individuals in China are trying to make a living by providing this service. If they are from the right industry, you can use their network and save a lot of time. They can also act as your in-country representative.
Unfortunately, over 90% of them get a hidden commission from the factory. This is “normal business” in China. As a result, when things go wrong, they often tend to defend the factory!
Dan Harris has a similar view of most agents:
I often describe China sourcing agents with the following: “Ninety percent are crooks or incompetents and most are both of these things. But ten percent are worth more than their weight in gold.”
3. Purchase from a trading company
This is a good option if you cannot satisfy the MOQs. A trading company can place production in a smaller workshop that accepts small orders. Aside from this particular situation, I don’t advise to work with a middleman.
I wrote about some downsides of working with a trading company before.
4. Use a service company
Some agents provide a service and charge a fee. Everything is transparent (supplier names, process followed…). It will be an investment for your company before production starts, but it is a good option if you forecast large orders down the road.
Such agents used to be very rare but I am sure it will become more and more common. The best ones tend to work like a procurement office and to be well organized.
Qualifying an agent
Here are a few questions to ask sourcing agents before you engage one:
  • How will they get paid, and by whom?
  • Will you be able to visit the factories before/during production?
  • Can they provide referrals or testimonials from satisfied customers who are using his services and who buy the same type of product as you? Make sure to contact two of them and get confirmations.
  • Do they do quality inspections by themselves? Or do they resort to a specialized third-party? Will you get a report every time?
  • Will you get an update every week on the production status?
  • Can they share their management system with you? You need to make sure they have processes in place. The vast majority of agents don’t follow any established procedures.
  • What guarantee do they offer in case a supplier scams you? If shipments are behind schedule? And if you receive junk product in your warehouse?
  • Are they located in the area where your products will be sourced? (Do a quick search on globalsources.com and you will have an idea about the main area for your product category.)
  • If you keep re-ordering the same products from the same sources, will you pay less for his services after the first order?  https://www.sunchineinspection.com/

Sourcing from China 101, Part 2: How to Identify Potential Suppliers?

Founded in 2005, Sunchine Inspection is one branch of Sunchine International; a Hong Kong based multinational company specializing in export-import consulting and quality management. Today, with two offices in China mainland and one office in Europe, Sunchine Inspection has become one of the best third party inspection companies in China, serving over 1,500 regular clients in various fields from all the Continents in the world.
BY RENAUD ANJORAN
Now I am assuming that you have decided to source in China by yourself.
One key point I want to communicate is this: you need to follow a process. You CANNOT browse a website, send a few emails, respond, and see where it takes you.

If you want a written checklist that you can adapt and follow, you will find an example here. It deals with sourcing, development, production, and transportation (but it is not applicable if you develop your own product).
But let’s look at the sourcing process first in more detail. It includes 2 steps:
  1. Identifying potential suppliers;
  2. Screening these suppliers and verifying the last candidate(s).
For now, let’s focus on the first step, which itself includes 3 sub-steps:

Sub-step 1. Drawing your ideal supplier profile

Ask yourself a few questions:
  • Do you need a supplier with strong engineering capabilities (to develop new products)?
  • Do you need them to have a wide range of designs that you can choose from?
  • Do you want them to focus on low cost? Or on high quality?
  • How big should they be? This is a very important criterion for the reasons discussed below. You will encounter factories belonging to these 3 levels, and their performances and prices will be vastly different:
Here is my general advice on the topic of the supplier’s size:
  • If your orders are very small, you might need to work with a trading company that will place your orders in a level 1 factory and (hopefully) follow production closely.
  • If your orders are large enough to work directly with a manufacturer, but not big enough to be interesting to big factories, go for level 2 (250-800 workers, roughly).
  • If your orders are considered large and you find the big companies actively fighting for your business, then level 3 is good for you.

Sub-step 2. Go to online B2B directories and/or trade shows

If you can get the opportunity to go to a trade show (Canton Fair, China Sourcing Fairs, and so on) that deals with your product category, go there! Ask a few open questions, the objective here is to eliminate any supplier that doesn’t fit with your ideal profile.
If you can’t physically get to a trade show, you will need to use B2B directories. Beware! They function like the yellow pages (suppliers who pay more, get their products featured more prominently). There is not as much effort to avoid listing bad apples as you might think.
Make sure you look at the information inside the profiles, to target only those suppliers that correspond to your ideal profile. For example, by keeping only suppliers with a minimum capital of 1 million RMB or above (this information is available on several supplier directories, I believe), you are eliminating 99% of trading companies from your search results.

Sub-step 3. Motivate potential suppliers to respond to you

Most suppliers get too many inquiries and need to choose which ones they respond to. Here are a few tips to get their attention.
  • The first message should be short, less than 8 lines if possible (including the product description), and with a VERY CLEAR call to action (“get back to me if you want more information about our needs”).
  • If you have a product specification sheet, share it with them and get their feedback. You should expect them to ask questions about manufacturing, like material specification or, if they don’t accept your tolerances, etc., if they say, “it’s fine”, this is not always a good sign.
  • And then… Follow up fast in responding to their questions, and finalize your screening process within 8 days. After that, your inquiry, in their eyes, will have gone cold.
  • If possible, call them (most of them have a Skype account and they all have a Wechat account — these 2 applications allow you to make calls for free if both parties are connected). Show that you are human and that you are investing your time to get to know them.
A big mistake to watch out for
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Some potential suppliers will offer a price that is much lower than average. How is this possible?
  1. Some suppliers want to start developing a product with you, and they will use tactics to increase the price along the way (usually after the deposit for the first order has been wired).
  2. Some other suppliers simply don’t know what the costs are. They have never made this product, even though you found it in their showroom. They will wonder where and how to manufacture it after you have sent them a PO. This is also a bad sign.
So, how to do?
You will likely see several very similar quotes from different suppliers: that’s the “market price”. Eliminate all the “outliers” that gave prices 20% higher or lower than the average. (If you are consciously looking to buy above the market price to get above-average quality, keep the highest quotes).
End of the identification phase
Ideally, you have compiled this information in an Excel spreadsheet, with data and comments. (Contact me if you don’t have time for that, and I will put you in touch with someone who can help.)
The next step is to screen most potential suppliers out, and to verify the last one or two in more depth. That will be covered in the next post in this series.  https://www.sunchineinspection.com/

Can You Trust the Measurements from Your China Factory?

Founded in 2005, Sunchine Inspection is one branch of Sunchine International; a Hong Kong based multinational company specializing in export-import consulting and quality management. Today, with two offices in China mainland and one office in Europe, Sunchine Inspection has become one of the best third party inspection companies in China, serving over 1,500 regular clients in various fields from all the Continents in the world.
BY RENAUD ANJORAN
The Quality Progress magazine ran a well-written article about measurement systems in their September issue (it is entitled ‘A Study in Measurements’ and was written by Neetu Choudhary).

If you purchase products that have to comply with strict measurement requirements, this is an important topic.
Let’s look at a classic situation.
A production operator measures a few pieces and finds they are within spec.
An inspector measures a few pieces from that same batch and finds a few of them out of spec.
Another inspector, sent by the customer, measures a few other pieces from that same batch and finds most of them out of spec.
The usual reaction? “Production never stops quality issues”, “the customer’s staff is too strict, they are probably trying to get a kickback”, and so on. Very frustrating.
And yet, there is often a clear origin to these discrepancies: different ways to measure the same product.
Let’s start with a breakdown of all sources of variation that come from the measurement process itself.
Sources of variabilityThis graph illustrates nicely the difference between accuracy and precision:
Accuracy vs. precision
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The author writes:
Accuracy is the closeness of a measured value to the true value and is comprised of three components:
Bias. The difference between the average measured value and the true value of a reference standard.
Linearity. The change in bias over the normal operating range.
Stability. Statistical stability of the measurement process with respect to its average and variation over time.
And what about precision? When there are doubts about the validity of a measurement system, precision is usually checked first through a gage repeatability & reproducibility study (GR&R study).
A GR&R study typically doesn’t take more than 1 hour of the operators’ and inspectors’ time, if they are given a clear plan to follow. It doesn’t require them to check hundreds of pieces. Usually it is planned this way:
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This type of study shows several types of differences. The source of many frustrations is typically reproducibility, and that concept includes mainly 2 types of differences:
Between different people (what do they find when checking the same product?)
Between what a person finds the first time she checks a product, the second time she checks the same product, etc. with the same instrument, in the same conditions, etc.
One can go very deep with this type of study, but in most cases it is not called for. Specialized software such as Minitab can take care of the calculations.
What type of conclusion can it help you draw?
If 30% of the variation comes from the measurement system itself, there is a serious issue! Any decision taken on the basis of measurements is going to be questioned, and for good reason.
In such a case, you will need to make changes such as changing/improving some of the measurement devices, ensuring proper calibration, writing a clear work instruction (how to measure a product), get your customer(s) and suppliers(s) to confirm it, train operators and inspectors, and so forth.  https://www.sunchineinspection.com/

2/18/2018

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2/13/2018

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