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China’s Product Recall Guessing Game
By Paul Midler | August 20, 2007
For those anticipating another recall, the question to ask may be: Which industry is next? I was asked to pick some industries - talk about being put on the spot - it’s like asking a geologist to predict an earthquake. Who knows where the next quality crisis is coming from, especially since China is home to so many different product segments. But pressed for an answer, I came up with a summary of conditions, and from that list of conditions, I selected a few sectors that may be more prone:
- Heavy Products
Laboratory testing does not prevent production shenanigans, but since everyone is still counting on more testing to help us prevent further recalls, I just want to point out: The majority of product testing is done at laboratories that are far from the point of production. Sample products are sent to laboratories by express courier, and it is easier to ship a stuffed animal than a leather couch. Inspectors from the third-party testing company can go on site, but such visits are often not cost effective. Long story short, heavier products get tested less frequently than lighter products. It’s an industry blind spot. - Products That Have A High Salvage Value
When suppliers consider reducing the specifications of a product, they always take into account the associated risk. The supplier has to consider what he will do if his buyer learns about the quality fade. After all, he doesn’t want to suffer any loss from a rejected shipment. If an order can be unloaded elsewhere at cost, or better, his risk is low – and the buyer’s on the other hand is high. - Chemicals
Be concerned about chemicals. They are hard to detect, and third-party testing provides limited assurances. Bear in mind that the laboratory must be told exactly what it is that they are testing in the first place. You can’t send a sample and tell them ‘just make sure it doesn’t have any bad stuff in it’. You have to know what kind of bad stuff to look for. Take an example: An importer of beds from China did not imagine that they should test for insecticides (the importer’s supplier had sprayed the bed with insecticides to prevent infestation). Even if the bed company had tested its product with a reputable third-party testing company, it is unlikely they would have thought about that one test. Another case. A woman claims she received chemical burns from a pair of flip-flops made in China and purchased at Wal-Mart. The case has not been proven, but it is doubtful that the importer would have thought to test for ‘some unknown chemical residue’ on the flip flop. - Products That Rely On FDA Approval
Factories in China often claim to be U.S. FDA-approved when sometimes they are not. Certificates can be faked. A factory can claim they have approval when what they mean is that they are in the process of gaining approval. Or, a factory can have approval but decide to cut corners anyway. America’s FDA is an overgrown and under-funded agency that has enough on its plate with prescription drugs. FDA does not provide pre-market approval for many products where it has oversight, and it is not particularly rigorous about testing products on store shelves. U.S. FDA doesn’t approve factories in China itself. That job has been outsourced, actually, to a government agency inside China. As we have seen with the execution of China’s food safety chief, such approval processes may be influenced by graft, which undermines safety assurances.
There are a many industries to which one or more of the above apply. Anyone who wants more specific details can send an email me at: info[at]thechinagame[dot]com. Here are four industries among several that have one or more matching criteria:
- Furniture
It’s heavy. Instances of formaldehyde use, insecticide and other chemicals in amounts that can harm. The industry is fragmented on both the manufacturing side, as well as on the distribution side. Testing kits for home use are much more widely available inside China than they are in the U.S., and for good reason. - Health and Beauty Care
Who knows what goes into some of the health and beauty care products made in China. Manipulation of chemical compounds are particularly challenging to testing laboratories. HBC products are not heavy, but their margins can be thin. This means importers are not likely to run too many tests. HBC is loosely controlled by U.S. FDA, and off-brand products in this segment are particularly worrisome. - Construction
A bridge under construction in China was compared to the collapse of a bridge in Minneapolis that was already decades old. What it should have been be compared with was the failure of two concrete projects under construction in the U.S.: (1) Fontainbleau Casino in Las Vegas (Aug 6). One floor gave way on the construction project, causing a small chain reaction leading to the collapse of three floors. (2) A bridge in Arizona under construction suffered a partial collapse (Aug 9). The construction company had never experience such an event in over 50 years of business. An increasing amount of construction materials are brought in from China for use in concrete construction projects. China exports shoring systems as well as girders, and other parts. Two concrete projects collapsing in the same week is not a trend, but it’s cause for some attention. Heavy products that do not get tested often, and the salvage value of many recyclable metals is high. - Tableware
Factories that produce ceramics must be FDA approved in order to sell into the U.S. Some manage to sell into the U.S. market though they are not approved to do so, and there is little oversight by the FDA. Some housewares that I have seen include a sticker that suggests that the product is not meant for use with foods. Similar products on store shelves in the U.S. do not carry such stickers, and there is little oversight.
Topics: Testing, China, Quality Fade |
August 24th, 2007 at 1:40 am
Carl Crow wrote about “quality fade” in his 1937 “Four Hundred Million Customers”:
“Chinese manufacturing almost invariably follows one disastrous cycle. The manufacturer starts with new equipment, turns out a good product and builds up a fair sale for his goods. When he has accomplished this much it seems to be impossible for him to resist the temptation to work off poor materials, the quality of his product deteriorates, his sales fall off, his business fails. Then someone buys him out, starts over again and runs through the same cycle…”
See our post with a longer quotation here: http://www.feer.com/tales/?p=572