China Needs to Focus on Quality to Flourish
This week's Economist had a piece talking about the quandry facing the Chinese economy. With their population becoming wealthier, their position as the cheapest workshop of the world is no longer certain. The article argues that with innovation still not happening, China should focus on the strength of their supply chain network and of their rapidly growing domestic market.
What does appear clear, however, is that something needs to be done. The World Bank has recently released a report called China 2030, suggesting that the Chinese economy could be in grave danger of a sharp slowdown, as it moves from a middle income society to a high income one.
Alongside the grave warning is a road map for how China can transition to a high value economy, with quality at the heart. The Chinese government is expanding its CQE (Certified Quality Engineer) system, promoting a National Quality Award program and deploying a series of initiatives on Lean Six Sigma, quality invigoration programs, and national quality legislation. China is making strides to advocate quality, rewarding those who support the initiative.
Last year, Process Excellence Network reported that many companies are shifting work back to the developed world, due to concerns about the quality of product they're receiving.
"We are beginning to see orders return to our shores, from international companies worried about the technical expertise of manufacturing businesses in Asia.", Simon Griffiths said in an interview.
The quality philosophy is not just a top down dictate though; it is bubbling up throughout Chinese society. Professor Sun Ji teaches quality concepts at Tsinghua University in Beijing. Through her coursework, she sees first-hand how attitudes toward quality are changing.
“Quality was of almost no concern to Chinese manufacturers twenty years ago. Whatever was produced could be sold, high quality or not; the demand was that great. Today, manufacturers have a better understanding of the impact quality has on their business success,” Sun comments.
The process improvement philosophy is already well entrenched in many Western companies of course, and they are demanding that their Chinese partners adhere to the same standards. Bicycle manufacturer Trek is a prime example.
“We selected our suppliers strategically based on their core competency and the ever-growing challenges of producing the highest quality, best performing products in the industry,” says Stephen Anderson, lead quality engineer at Trek.
For China it seems, quality not quantity is what matters.