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Kerstin Garbracht:
China goes quality

 Jul 22, 2010
„It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.“
attributed to John Ruskin as Common Law of Business Balance


Déja vu?

Germans remember well and British are supposed to, too: the effect of a seal of quality!

As of August 23rd, 1887, Britains happened to implement their Merchandise Marks Act, prescribing that the country of origin must be stamped on any imported goods. Thus they especially tried to protect themselves against cheap products from Germany which, in those days, was developing into an industrialised country. The Germans then used to reproduce British high-priced goods on a level, which the islanders denoted „bad & cheap“. Anyway, in those days, Germans had to work longer and at lower wages, compared to Britains. The latter neither liked the rip-offs, nor the associated underselling. Against this background, the label „Made in Germany“ was born, originally intended to attest poor quality and to safeguard the good reputation of British genuines.

Made in China: Tian'anmen in the centre of Beijing is one of China´s most famous landmarks
However, German products capturing the British market, more and more turned out to be of proper quality. Thus, backfiring primary intention, British consumers deliberately chose German commodities.

German entrepreneurs having recognised the potential of this trend, stamped „Made in Germany“ on all goods, no matter where they were supposed to be sold. Ever since, this logo has developed into an internationally acknowledged seal of quality.

„There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man's lawful prey.“
John Ruskin (English critic and social theorist, 1819 - 1900)

Made in China

Having been moved from Beijing to a territory regained from the sea, Shougang Jingtang is one of China´s most modern steelworks
Are the Chinese emulating this example? Breaking news grounds, the Chinese government has prepared new provision for their companies to invest in quality. They recognised that time is past for making money with cheap articles. Even Chinese consumers are willing to pay for quality, no matter whether luxury or convenience goods are concerned. This change of sign is a consequence of the continuously rising level of living allowing the buying criteria to be shifted from lowest price priority towards origin and quality. Absenting themselves from the low-price image, China launches a pretty fat purse developing „Made in China“ a seal of quality. Accordingly, a huge modernisation campaign is expected to assert China´s position in the world´s market. This affects both, new equipment as well as investment in quality tools. The new trend aiming at modernisation and increasing value creation has also been attested by Germany Trade and Invest. Once started in textile manufacturing, it has spilled over into many other industries, to especially name the metal producers, i.e. iron and steel as well as aluminium. Moving spirit behind this development is, by far, not only export, but home demand. Driven by improving economic status, consumers in the P.R. China also more and more prefer value-added products of high quality. As a consequence, producers have to react to this trend of increasing demand for quality or, their products, and maybe, the whole company, will vanish from the market.

Foreign companies do already have a technological lead in high-quality products and are, thus, well prepared for further growth. Should the Chinese manufacturers want to catch up, which is indispensable for surviving on both, home and international markets, they would be well advised to invest in quality. In the steel and aluminium producing segment, this requires appropriate ressources and independent supervising tools, such as quality execution systems.
Without enveloping quality assurance you never knew whether this slab entering the hot mill, might already be flawed with imperfections from the caster
„ Quality is never an accident; it is always the result of intelligent effort.“
John Ruskin (English critic and social theorist, 1819 - 1900)

Paradigm change in steel industry

Many steelmaking projects remain half done or less unfinished and will never be finalized, because steelmaking capacity should not be further expanded. The Chinese government, however, set up a programme giving quality top priority. This steel industry development plan indeed represents a 180-°-turnaround in strategy. Thus, companies shall be motivated to cultivate a corporate quality culture. Anyway, this target is not to be reached as easy as it sounds. Increased awareness of quality is often regarded as an ambiguous matter: getting marked a mistake, Chinese would lose face. Accordingly, persons in charge are currently vehemently defending themselves against quality monitoring and inspection. Obviously, there is a lack of understanding: assessing quality and distinguishing between different customer demands is by far not synonym for making mistakes. So long as the present situation continues to prevail, i.e., neither surface nor other quality aspects are certified, the P.R. China will not get rid of their cheapjack image.

Many quality data have their origin in the hot mill: apart from conventional geometric dimensions, parameters such as tolerance, flatness, surface roughness, edge conditions, temperature etc. are collected
Much awareness training is neccessary until the personnel is willing to accept the shift in attitude required for meeting the new quality challenge. Anyway, this paradigm change is indispensable to convince the teams operating along the entire process of generating top quality steel products. As soon as this lesson is learned, the perfect basis is provided to produce the quality demanded by the respective customers.
 
Some Chinese steelmakers have already understood and properly reacted to the signs of time in investing million of Euro in quality execution systems. Shougang, e.g., recently equipped their line with tools like logic designer and quality monitor supervising the steel from slab to galvanised strip. Other lines will follow. The quality data will be stored for a period of between 5 - 10 years. Here, it becomes obvious that future-oriented companies whose personnel is capable of adopting the premier level thinking need not balk at competition.

„Skill is the unified force of experience, intellect and passion in their operation.“
John Ruskin (English critic and social theorist, 1819 - 1900)


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