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Junior Varsity
Uli Behringer of The Music Group Q&A
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<blockquote data-quote="John Roberts" data-source="post: 51280" data-attributes="member: 126"><p>Re: Uli Behringer of The Music Group Q&A</p><p></p><p></p><p></p><p></p><p></p><p>I have often found myself a defender of off-shore manufacturing here and on other forums as a healthy business practice when properly managed. In my experience blame for any associated quality problems should fall on a failure of manufacturing process control, marginal design, or poorly specified raw components, not which country a SKU happens to be assembled in. While there are bad actors around the world. </p><p></p><p>Speaking of first hand experience I have actually worked with and been inside several factories in China (including Kwanasia). It is human nature to stereotype all Chinese factories as the same, and some may be tiny fly by night operations, but Kwanasia is a large world class ISO-9001/ISO-14000 operation with many large western customers from other than audio industries. They are owned by a publicly traded company and have their own website for anyone who is interested. I never personally experienced quality problems with Kwanasia (in connection with my old day job). Note: I have also seen small businesses fail when they purchased a container load of crap from some incompletely vetted manufacturer purely on price, because they trusted too much and verified too little, so caveat caveat emptor. </p><p></p><p>I think it's on page two of "manufacturing for dummies" that any factory needs adult supervision at critical stages of the process, whether that factory is 25 miles away or thousands of miles away. China is just the most recent of a long list of low cost manufacturing centers (India, Korea, Taiwan, and who doesn't remember 240 Japanese Yen per USD?). The major issue with offshore mfg. is communication, across different cultures and languages, and the all to common tendency of small companies to have incomplete process documentation because the factory workers already know how to build it. These days as a tiny company, I only do a tiny fraction of my manufacturing offshore, because i can not afford the overhead cost to have boots on the ground on the other side of the world, while I can take advantage of some very tightly specified processes like bare PCB, and some metal parts that are adequately defined by CAD files, but even then we must be diligent. </p><p></p><p>I'm sure Uli could tell us stories about manufacturing in China with his expanded operation there that would curl our hair... While I don't ask or expect him to share all that. Congrats on getting Midas engineers to locate over there. Western engineers are very useful to have in house over there. </p><p></p><p><strong>If I could ask another question before he answers my first, what are Uli's expectations about long term yuan appreciation, rising wages and standard of living for Chinese workers, and the upcoming central government leadership transition?</strong> IIRC his factory is located away from the more populous manufacturing center so he may not see the same strong wage pressure as soon as facilities there, but the trend across the entire country seems to be toward higher costs and deteriorating exchange rates (at least wrt USD).. Hon Hai is building new factories in the north away from the coast and buying lot of robots. I think the car companies are already building factories in Africa as the next low cost manufacturing frontier. </p><p></p><p>JR</p></blockquote><p></p>
[QUOTE="John Roberts, post: 51280, member: 126"] Re: Uli Behringer of The Music Group Q&A I have often found myself a defender of off-shore manufacturing here and on other forums as a healthy business practice when properly managed. In my experience blame for any associated quality problems should fall on a failure of manufacturing process control, marginal design, or poorly specified raw components, not which country a SKU happens to be assembled in. While there are bad actors around the world. Speaking of first hand experience I have actually worked with and been inside several factories in China (including Kwanasia). It is human nature to stereotype all Chinese factories as the same, and some may be tiny fly by night operations, but Kwanasia is a large world class ISO-9001/ISO-14000 operation with many large western customers from other than audio industries. They are owned by a publicly traded company and have their own website for anyone who is interested. I never personally experienced quality problems with Kwanasia (in connection with my old day job). Note: I have also seen small businesses fail when they purchased a container load of crap from some incompletely vetted manufacturer purely on price, because they trusted too much and verified too little, so caveat caveat emptor. I think it's on page two of "manufacturing for dummies" that any factory needs adult supervision at critical stages of the process, whether that factory is 25 miles away or thousands of miles away. China is just the most recent of a long list of low cost manufacturing centers (India, Korea, Taiwan, and who doesn't remember 240 Japanese Yen per USD?). The major issue with offshore mfg. is communication, across different cultures and languages, and the all to common tendency of small companies to have incomplete process documentation because the factory workers already know how to build it. These days as a tiny company, I only do a tiny fraction of my manufacturing offshore, because i can not afford the overhead cost to have boots on the ground on the other side of the world, while I can take advantage of some very tightly specified processes like bare PCB, and some metal parts that are adequately defined by CAD files, but even then we must be diligent. I'm sure Uli could tell us stories about manufacturing in China with his expanded operation there that would curl our hair... While I don't ask or expect him to share all that. Congrats on getting Midas engineers to locate over there. Western engineers are very useful to have in house over there. [b]If I could ask another question before he answers my first, what are Uli's expectations about long term yuan appreciation, rising wages and standard of living for Chinese workers, and the upcoming central government leadership transition?[/b] IIRC his factory is located away from the more populous manufacturing center so he may not see the same strong wage pressure as soon as facilities there, but the trend across the entire country seems to be toward higher costs and deteriorating exchange rates (at least wrt USD).. Hon Hai is building new factories in the north away from the coast and buying lot of robots. I think the car companies are already building factories in Africa as the next low cost manufacturing frontier. JR [/QUOTE]
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