Solving the Chinese puzzle without getting burnt

Working with Chinese suppliers is a huge challenge. But it can be done effectively and the cost savings for NZ businesses can be in the order of 30-40 percent depending on quantity. A decade of dealing with Chinese manufacturing companies and four years of living and working in China have given kiwi Denver Lawson a unique perspective into the Asian manufacturing culture.

Mr Lawson recommends companies get raw or semi-finished product from China, then add value with finishing operations in New Zealand.

“This gives better control over the finished article. From a management perspective, it also means you are leveraging what both countries do best, and not trying to exceed a value expectation which would inevitably compromise the product, and your company reputation.”

And it is this hard earned experience that has led Mr Lawson to launch a new service to supply quality product from China from his validated supplier base.

He specialises in aluminium alloy forgings, castings of various kinds, Nikasil- type coatings, steel fabrications, and specialist machining.

“I have a personal relationship with each supplier, and am well known and respected. This gives NZ customers a unique opportunity to leverage this experience and stability – and improve their bottom line. It’s all about being competitive in a global economy.”

However, he cautions that “reasonable quantities” are needed, in the order of 5000 units/month or more.

Mr Lawson ran his design and engineering company in Chongqing, a thriving industrial metropolis in China’s southwest, from 2007 until the end of 2011.

As part of the approved supplier validation procedure, he contacted, met, visited, checked, worked with, and in many cases, rejected dozens of suppliers.

“The ones we ended up selecting were really good, but very difficult to find. Building a validated supplier base is tough, but success is impossible without it. We certainly kissed a few frogs,” he says.

It is no secret that the supplier situation in China for engineering SMEs with medium production quantities is fraught with danger.

It’s much more than just the language barrier, there are cultural reasons why offshore customers generally end up with bad product, says Mr Lawson.

“You simply don’t have enough clout to ensure proper processes are adhered to and so the end product is compromised. Usually this doesn’t happen the first time, but it will happen the second or third time you order. It is inevitable,” says Mr Lawson.

He also gives advice to engineering companies trying to set up a Chinese supplier system, and assists companies in developing workable QC systems for Chinese suppliers.

He is skilled in 3D conceptualisation and design, and 2D drawing – especially in the detailing of reference and QC drawings to eliminate cross-cultural ambiguity.

For more information:
Denver Lawson, iFFiTechnologies
Tel: 021 664 663,
Email: den [at] iffitech [dot] com

Kiwi engineering at its best

Denver Lawson designed and developed a small capacity motorcycle for entry level motocross use. He used some of the same suppliers that major companies like Yamaha, Honda and KTM use, as well as several Tier 2 suppliers.

“Not all the suppliers were from China,” he says.

"For several key components we used Taiwanese, Japanese or even German suppliers. It really depended on the best value chain, as well as the individual suppliers’ in-house capability and the complexity of the part and forming operations. Just as important was the part’s position in the safety matrix of the machine. All these need careful consideration when selecting a supplier and working with them.”

The motorcycle engine passed its endurance tests very well, which was a major vindication of the design and specifi cation detailing, as well as careful attention to supplier selection and Quality Control mechanisms.

“Manufacturing and QC intents have to be built into the part design from the beginning,” he emphasises.

“A project of that size was a huge ask for our small but dedicated team. We set up the R&D centre, the engine production line base and QC department, and finalised all the product testing, only to lose our funding just prior to production as the recession bit deeper.

“It was a huge disappointment for not just me, but also our 46 suppliers, who had also worked with us on what was, to the Chinese, an exciting project with a high technology value.

“Moving from a concept, to a working production system for a completely new design of motorcycle is a vast amount of work, and when the project involves the manufacture of hundreds of different, new parts the complexity cannot be underestimated. It took about two years longer to complete than we ever thought, but we did it. To me, this is Kiwi engineering at its best.”