Another business post rant

A few days ago I was directed to a supplier’s website.  I took a look.  Some of the products were quite nice.  Their selection quite broad. I was interested.  I contacted them.  I requested a look at their company catalogue.  To my surprise, I was told I needed a password to gain entry.  Having already seen some of their product, my appetite whetted, I told them a bit about my company background. 

I got the password.

Upon “entry” I was quite impressed with the range of product.  Working under the old adage, 

“Chinese know Chinese”, I could see why a password was required.   And if I were in their shoes, I’d do the same.

A few days later, having caught my breath, I began ordering samples from them.   The response I received surprised me somewhat;

“Out of production”

“Out of stock”

“No inventory”

WTF?  Seriously?

I couldn’t help but ask the question: 

“If it is out of production, why is it still in the catalogue?”

First to even have a password was unusual.   But I get it.

Next, you wanted a list of my credentials to gain entry to your “selection” of product.  Ok.  A bit of shameless grandstanding if you ask me, considering there are a hundred factories just like yours, making similar product, but fair enough.

But to have the gall to then tell me with a straight face that you don’t even have the product listed in your catalogue is simply beyond logical explanation.

But I kept asking for samples, and they kept telling me the same.

Finally, I gave up.  I eventually only found about 20% of what I was interested in.

The supplier then sheepishly admitted,

“We haven’t updated our catalogue since 2012…….”

Once I read those words I simply bust out laughing, alone, in my office.

All these “factories” are basically nothing more than assembly shops.  Some mysterious guy builds the key components, only ships them in red and black, and everyone else uses them to assemble their final product in their own “factory”.  

To me the definition of a “factory” is the ability to build your own parts, regardless what you may do with them later on.   Usually final assembly, but not necessarily.  Even better though if you have your own tooling factory as well. 

Turns out the same product I’m seriously looking at buying right now is the same product many other factories have as well.  They even use the same material.   Plastic on the body, zinc on the tip.  The same design, the same material….even the same color.

“You can have it any color you want as long as it’s red or black.”

When people talk to me about innovation in China, this is only one story I counter with.  The herd mentality.   I’ve tried to ask them, beg them, to use other material.

Mag alloy for instance.  Mag alloy is lighter than zinc.   Why not use mag alloy? 

“Too expensive”, is their reply.

This technology, to make matters worse, is two years old. 

What gives?

Many customers are just like me; we will give you an idea, never a drawing(which will be stolen, or copied), and you will create the design from that.

The Chinese are expert at new designs, or new ideas off a previous concept.  Most foreign companies, as a result, especially the small ones, rely exclusively off the product expertise of their Chinese supply base. 

“What functions are best? Ask our Chinese supplier!”  The Chinese are quite often the best to bounce ideas off of.   Giving insight as to how to cut costs, or speed a product to market.

The Chinese are now even respecting patents. 

“We’d love to sell you that model.  You know the one in our brochure that you really wanted….but 

I’m afraid it’s under patent to another customer!”

Oh really?

“Mind explaining then why it’s in a brochure?”

So why the hell, after all the good I’ve said above, am I complaining?

Because every factory in the damn province has the same design as the other guy.  There is little differentiation, or building upon a model to make it progressively better.  No improved functionality.

I have firsthand experience regarding Chinese innovation.   Every time I see a laowai Wumao on LinkedIn extolling yet another Chinese achievement I want to roll out a huge fucking grain of salt into his sandbox.   Innovation exists….it’s just not continuous.  More often they are waiting on the laowai customer to bring them something to the table. 

Problem is we laowai have gotten lazy.  Everything is in China.   First we said we’d only take production there to bust the unions.  Then it was in order to avoid bankruptcy.  And finally US companies have just come out and said it;  because American workers are a pain in the ass, with their 60 minute lunch breaks and HR niceties.   Nevermind if the Chinese counterpart wears sandals, is 19 years old and only has a 9^th grade education.  He knows how to operate a CNC machine just as well as the guy back home with a mortgage to pay and a kid to put through college.   My guy over here in China hasn’t even had a girlfriend!  And yet he makes in one month what YOU make in 3 days!

Well…the above is still true, but sadly not as much as you may think.  Smaller companies yeah it’s everywhere.  EVERYWHERE.  But American companies in China have standards too, and trust me, they have nobody wearing sandals and nobody with only a 9^th grade education running a CNC machine. And the Chinese they do have working for them are all pretty fucking smart, up and down the line.  But I’ve digressed in a big way. 

We laowai are all lazy now.  Once the factories shut down we told ourselves “we’ll still keep the designs”, but once the American Senior Managers realized along the lines of, “hey, the Chinese know how to run Auto cad and Solidworks, too!”, those designers back in America took a beating.

And now we’ve basically given up on ideas, too. 

The Chinese have the ideas,  man.  We’ll just go to tradeshows and tweak what they have to suit our needs.

That is, America is now nothing but a country of clerks cutting purchase orders.  The engineers are gone, only the accountants and lawyers are left. 

And that all makes sense until we go to the trade show….and see every booth has the same damn thing!

And a thousand different factories have it.  And for Me and You, that’s a good thing, cause now it’s a buyer’s market.  And the Chinese know it’s a buyer’s market.   And there is nothing they can do about it.  And that means we can save money right?

But at the cost of what?

Remember my Socks Analogy?

Is it really worth taking a way a guys’ job just to be able to say you’ve cut the price of a pair of socks at Wal-Mart .25 cents?

The Chinese themselves are overrated.  China has prospered so quickly all the world thinks every Chinese is a founder of Alibaba.

Anyone that says China is good in business, and more clever than the laowai should actually go to China and try to actually buy something.  Being able to copy a Coach purse doesn’t make one clever in business if 50 other shops within 5 minutes’ walk have the same damn thing.

Today I received the samples I was expecting.   Nearly identical to what I have now, except a different color but with a hook on the end.  Not bad.  And it’s plastic rather than zinc.    And that is the extent of the innovation.   

And my boss loves them.