An In the Field Perspective on Made in China

An operations manager for a multi-national manufacturer in Guangzhou China, for which he is closing in on five years and the end of his contract reflects on his view changed of China.
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I am an operations manager for a multi-national manufacturer in Guangzhou China, for which I am closing in on five years and the end of my contract. It is hard to believe that the more than 5 years have come and gone so quickly. To be certain I am older—hopefully wiser—and I hold a different world view than when I arrived in China on Mother’s Day 2008.

People often ask what is different in China today than when you arrived. Of course they are generally seeking information on social change in this country of nearly 1.5 billion people. And I promise there is any number of things socially that have changed.

For one, Paulaner Braurie™ in Munchen (Munich) Germany opened a restaurant here in Guangzhou. One would imagine that this would be popular with the local Ex-pats (which it is). However, you would be amazed to come in on any given night and find the place humming with local Chinese patrons. At first they came out of curiosity, but today they are regular patrons enjoying German food and bier.  

Walking the streets of Guangzhou is a real experience as well. All of the wild hair that is popular in the rest of the world has made it here too. In the shopping malls we find Louis Vuitton, Coach, Chanell, Dunhill and much more. The streets are alive with BMW, Porsche, Benz, Alfa Romeo, and the like. This is a culture gone consumer in a big ticket way.

However, this is supposed to be an article revealing the difference and similarities between moldmaking in North America and South China. So, first I must qualify my remarks, which are limited to my experiences with toolmakers which whom my company engages for moldmaking projects. There are many shops that I have not visited and so characterizing all through my limited vision is unfair. If you have had similar experiences, then we are on the same page. If your experiences differ, please let the readership of this and other magazines know.

I currently manage a multi-national manufacturing operation in Mainland China. We have injection molding as a core competency and maintain our own tooling, but do not have any moldmaking facilities in house.

I have been involved in moldmaking, mold design and injection molding for the past 38 years, which some may think qualifies me as an expert, but I realize just how little I know …although I am still willing to share my knowledge and experience with others.

The Arrival
When I first came to China in January of 2006 on a business trip, I was expecting to find bright new factories filled with the latest technology in machine tools. I further anticipated humming operations turning out molds and dies that would rival any in the world. After all, these folk were eating our collective lunch in the U.S. and Europe. What I found was a mixture of modern and old—new equipment and techniques held back by a societal view that “everyone must have a job” to contribute to the common good.

There were CNC die sinkers in almost every shop we visited; and, at every machine there was an operator loading and unloading electrodes in H-blocks while the machined burned in “Fully Manual” mode. The tanks were not flooded and the die-electric fluid ran out onto the floor in any cases. Once shop thought that they had entered the “modern age of moldmaking when they added two Fanuc CNC jig drills.  This was their entry into Moldmaking of the 21st Century.

To be fair, there were other shops we visited that had true state-of-the-art equipment as well as some novel approaches to mold building. One even went so far as to have two identically equipped toolrooms that were pitted against each other for P & L (Profit and Loss) competitions.

The equipment was second to none that I had seen in the U.S., yet they still didn’t get the concept of palletized electrodes and cavity blocks to reduce setup time. Of the six companies we visited, there was one that had embraced palletization of cavity and core blocks, but they still had an operator at every machine.

Two years later when I moved to China, things had pretty much remained the same. Nice equipment, but still that nagging mindset that says “Everyone must have a job.”
In the late 1970s and into the 1980s we built molds pretty much the same way in the U.S. At that time I was working for the model car industry (hobby kits)—something your kids and grandkids may not understand. We built molds with blind pockets and cavity and core impressions burned or machined into solid blocks to fit the holder shoes. But then people started using window pockets and setting blocks flat on surface ground backing plates. No more shims to compensate for spindle deflection and waviness in the pockets. Then came wire EDM and window pockets really came alive. So did laminated inserts with replaceable segments and straight walls. Oh, how we moved ahead.

But here I was 28 years later and these folks were still using 1980 approaches to building molds. On top of that they were using copper electrodes to burn cavities. Slow, inefficient copper in all areas not just where the detail warranted it.

Hard mills were used to machine the electrodes, but not trying to cut steel in a hardened condition. Blind pockets abounded and shims were the order of the day—.002” here, .010” there, whatever it  took to get the insert to sit somewhat flat.

Today’s View
Fast forward to 2013. So what is different today? As Wise Old Solomon wrote in the book of Ecclesiastes, “There is nothing new under the sun …” There are still just as many molds built in shops that are using 1980 approaches today as there were five years ago. There are just as many operators manning just as many CNC EDMs and burning with just about as much copper. Some have moved ahead and continue to try and forge new directions; however, the vast majority remains in the past.

Earlier this year I had an opportunity to visit a new company owned 100-percent by foreigners. I thought now this should be a fantastic place—a melding of new equipment and a modern approach to staffing machine utilization. What I found was just another Chinese mold shop. Now the management was Western (well, the owners were), but that was about as close as we came to seeing anything earth-shaking. They were putting in a new CMM cell to measure electrodes that had been machined on 3-R™ toolchanging pallets, but after measuring the electrodes and ensuring that the geometry was 100-percent spot on, they were to be removed from the pallets and used in “H” blocks to burn cavity and core impressions. The shop was as crowded as any I had ever seen, and the approach remained caught in a time warp.

The China Threat
So herein lies the question: “Do American moldmakers really have to fear China as a threat to “high-tech” mold building?” The answer is: Yes and No.  Yes, there are shops and shop owners who are looking at what is happening in the industry and adjusting their approach to toolmaking to meet the demands of their customers. They are finding ways to leverage technology and modernize the design approach that will rival those of America and the U.S. They still have an advantage of lower labor rates (now ~4500 RMB/Month on average), but those rates are continuing to rise as the populace wants more of the things that a consumer-driven economy provides.

The truly successful companies provide a turn-key business model including product development, tool building, molding, finishing, assembly and logistics. They are drop shipping to customers—not just the molds, but finished goods that are ready to go on the shelf for sale to the consumer in America, Europe or wherever. Their staff speaks remarkable English and understands how “serve” is integral in customer service.

And NO, you don’t have to worry that your lunch will be eaten by these shops forever. Harry Moser has already written numerous articles outlining the escalating costs of importing molds, but what I will add is that for as much good as is available in China, the old adage remains true: “Long after the smell of a sweet deal goes away, the stench of poor workmanship remains.”

Because as W.C Fields once quipped, “There’s no such thing as a free lunch.” A few points to remember as we close: China will not always have the lowest labor rates—someone else is cheaper already; the rent on buildings continues to increase along the coastal regions of the country forcing companies to relocate to the interior (most employees do not want to relocate leaving a labor vacuum when a company reaches the new location; infrastructure (roads) is still being developed to get goods to the sea ports; and, electricity costs are on the rise in China and may actually be higher than in some parts of the U.S. or Europe); you will never hear a Chinese businessman give an emphatic “No” to a question—that ends the negotiation. What you will hear many times is “Yes, yes. No problem,” and my Chinese/English lexicon translates that to mean: “Yes, I heard your words; yes, you must have a point; and, no I didn’t understand you and any problem is surely yours!”

Final word: shop owners and customers who want to do business in China—or wherever the market is developing—had better plan on spending additional time building relationships, validating expectations and troubleshooting projects.

Scott L. Peters is Operations Manager for a multi-national manufacturer in Guangzhou China. He serves the Mold Making and Mold Design Division of the Society of Plastics Engineers as Division Chair Elect. Scott is the owner and founder of Molded Marketing LLC. He makes his U.S. home in Owensboro, KY.


Management Style Comparison
“How does managing a factory in China compare to managing one in the U.S.?” To be honest, I haven’t managed a full operation in the U.S., so I can only guess at what that is like. What I can tell you is that managing is managing no matter where you are. There are certainly cultural and language boundaries, but people are people.

I like to joke that I am on a 5-year MBA program. And well I think at times, so are the people I work with. We seem to be in constant teaching mode: how to provide customer service, what good production really looks like, why keeping small partial cartons of production over-run is costly, and so on.

In general, the people want to do a good job. They just don’t really understand what that means in a Western Mindset. To the common Chinese worker a good job is meeting the production standard, and if some bad product makes it in, well that should be alright—most was good.

They save every scrap of material in the hopes that it can be used in future production. Even resins that have been dried to death get returned to the raw material warehouse for future use. What a joy it is to find that your first three or four hours of production were made with previously dried resin that has now degraded. Can anyone spell cost of quality??

Instructions must be given in simple single steps. Written is better. Clarifying questions are the norm: “What is it you heard me tell you?” Then repeat again. Processes may be agreed to in the morning, trained on in the afternoon and restated the following morning because things just happen. The people really do want to do a good job, but they just don’t see how the Western Quality Requirements make sense.

To get a glimpse of what it is like, I suggest reading “Barefoot in the Boardroom” and “Poorly Made in China.” Both of these are favorites of mine. As I read through them I found myself laughing out loud because it seemed impossible that anything like what was being described could really happen. But then in the next moment I was crying—why?—because I was living it.

I have found that in the Universities of China rote memorization of facts and figures is taught. What is not always given in the classroom is application. That is left to be picked up on the job. Additionally, true critical analysis is a lost art form on the Chinese worker. They will do whatever they are told, but don’t expect too many of the “Why” questions to be asked—at least not by the rank-and-file workers. However, there are exceptions to the rule. I happen to have several in my Manufacturing Engineering and Customer Service Teams, but remember that this is a society dominated by government fixes, and the thinking that “Everyone must have a job,” and sometimes it just has to be in your factory.