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Typical Pitfalls of Outsourcing

 

Whoever tries to transfer production to the Far East without professional engineering involvement really has one of two choices, both of which can potentially increase cost and damage reputation.

1. Build-to-print

If you have a full set of drawings, you can insist on a rigid ‘build to print’, but this severely limits the scope for cost reduction as it often necessitates shipping raw materials to the Far East as they are unavailable locally. It can also introduce quality problems where simpler machinery or manual methods are forced to imitate automated assembly.

2. Rely on supplier

More than a few clients have had their fingers burned (in one case literally by an overheating transformer!) by asking manufacturers in China to supply an equivalent (either from drawings or a working sample), making substitutions of the supplier’s own choice. From initial cost indications this may appear attractive, but this approach is usually disastrous as it is very unlikely that the product will meet its original specification under all the conditions for which it was originally designed. We are all aware through first-hand experience or anecdotally of the catastrophic failures, re-calls and losses arising from this approach.

Examples of pitfalls

To take two genuine real-life examples of the above, consider something as ‘simple’ as enamelled copper wire. Under the first scenario (build-to-print) a product designed using IEC-standard wire would be required to use the same wire when assembled in China. But IEC standard wire is uncommon in China (where wires are normally produced to Japanese standards), so either the wire must be imported specially, or produced locally as a ‘special’ at high cost. Either way, this increases material costs and also makes it far less attractive for a manufacturer.

Under the second scenario (relying on supplier) there is a real likelihood of a dangerous substitution. The IEC enamelled wire with highest breakdown strength is known as ‘Grade 3’. An equivalent enamelled wire in China produced to Japanese standards would be ‘Class 1’. A ‘Class 3’ wire, on the other hand, has the thinnest coating of enamel with the lowest breakdown strength. It is certainly possible for this subtlety to be ‘lost in translation’. If a ‘Class 3’ wire were substituted for a ‘Grade 3’ wire then there would be, at the very least, the danger of premature breakdown failure.

 

 

 

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