Tuesday, November 25, 2008

Chinese Democracy

I have various alerts set up to receive information about China. Since Guns N' Roses finally released the long awaited "Chinese Democracy" album, those alerts have included information about China's cool-reception to Axl and company's latest work. Check out one report from the AP here. To make up your own mind, visit G n' R's myspace page where you can listen to some streaming MP3.

Ok, I'm a fan of G n' R. Not a crazy fan, I haven't bought the album yet, but as a young man, I did stay up late to watch Headbanger's Ball on MTV, and very clearly recall the release of "Appetite for Destruction." Remember Headbangers Ball!?!

Saturday, November 22, 2008

What is your favorite Chinese beer?

Since it's Saturday, let's talk about something near and dear to my heart -- beer!

I'm a beer fan. I brew it, drink it, savor it, and am also a bit picky about what I drink. That also means I'm not really a fan of most Chinese beer. Very light, bodyless, strangely-flavored pilser is available in the US, so no reason to go to China to find it. That said, on a hot Chinese afternoon, an ice cold Tsingtao tastes awfully nice!!

Wherever I go, I try the beer. My favorite in China, so far, is Harbin Beer. It's not so different from the rest, and I'm not sure really why I like it. My impression was just that it was crisper an fresher, maybe a little maltier than others, but it's been awhile since I had it.

What's your favorite? Take the poll on the right sidebar! If I haven't listed your favorite, please comment. If you comment, feel free to tell me your favorite all time beer, regardless of the origin!

Friday, November 21, 2008

Do You Need a Supplier Contract?

No. If everything is going really well, and always will, then don't bother. You, my friend, are an enlightened master, but you don't need me to tell you that.

For the rest of us, likely you do. There are scores of articles about how to source product from low-cost countries. I've written several myself. I usually dance around the topic of contracts, and am even uncertain about what to tell my clients. I do have experienced legal advisors that I trust, and I count on them to help me figure these issues out.

Let me give you a couple of scenarios, one with a contract, one without. Please do seek legal advice before you finalize a sourcing project. As the old saying goes, an ounce of prevention is worth a pound of cure.

Scenario 1: I source a small stainless retaining clip. The value of the clip is a few pennies. The mould only cost me $200. My staff performs QC checks prior to each shipment, and I buy sufficient quantity to cover 90 days of supply. My relationship with this vendor is great, and I've used him for a couple of years. I also know that I could likely move this project to another vendor in less than 90 days, and that my mould cost will be less than $1000. I have no contract, but do issue detailed purchase orders with each order. I'm comfortable with this arrangement.

Scenario 2: I work with a partner to source a large aluminum casting for the automotive industry. The cost of the mould and tooling was over $30,000. The part is complicated and we ship monthly. Of course, relationship and VERY pro-active project controls are necessary. My risk, however, is tremendous if there is a problem. I certainly need a contract on this one!! If things go wrong, I will need to recover the tooling, which my partner and I own! I'll need to recover damages, as I would likely miss shipments if I needed to move the project. With the right team, legal remedy is possible in China.

The last contract that I worked on in China cost about $4,000. Expensive, yes, but if your tooling costs $30,000, it's worth it. If you don't include vendor disagreements as part of your failure mode and effects analysis, perhaps you should. The corresponding process control could be a well-written, enforceable contract.

Monday, November 17, 2008

Ready to Enter the Matrix?

Do you work in a matrix organization? If you work for a Western company, most likely you do. Matrix organizations are those that pool functional groups under a manager -- electrical engineers work for the EE Manager, salespeople work for the Sales Manager, etc. In addition to that, product or project managers take required people from each pool, and organize them around a goal or project. Matrix organizations allow for project teams to be tightly focused on a goal, but also allow like skills to be pooled together, which contributes to skill development and sharing of ideas. I think matrix organizations are the most effective structure, but they are also confusing to staff. As you may have noticed, each person may report to two different managers -- their functional manager, e.g. the Electrical Engineering Manager, and also to a Project Manager.

Most Chinese companies that I have worked with are organized around a more hierarchical structure, usually functional. Your Chinese employees may not be familiar with the matrix organization, something that you take for granted. Try dropping your new Chinese engineer into your matrix, without any orientation program, and you can be certain that he will feel confused by seemingly conflicting demands and a complicated reporting structure.

If you want to retain your best Chinese employees, take the time to make sure they understand how your global organization works. It's likely your company is a matrix of some kind, and your Chinese employees will need some time to understand the benefits of the matrix organization.

Friday, November 14, 2008

Help with China HR

Staffing issues are always among the top concerns for business leaders. Due to rapid growth and huge demographic changes, the problem is amplified in China. Several clients have asked me to interview their China-based staff for suitability as well as interview candidates for key positions. I believe that my interview techniques and style have allowed me to be very effective in identifying top performers for critical positions.

Today, I'm also going to let you in on one of my other secrets -- Encourage (Ningbo) Management and Consulting Company. The owner's name is Helen, she's Ningbonese, and one savvy business woman. I've worked with her on several staffing projects, and have had good success. Visit her website and send her an e-mail, I'm sure she'll be happy to help. Of course, please do let her know that I sent you!!

Wednesday, November 12, 2008

CSA International Opens Lab in GuanZhou

From Marketwatch, CSA has officially opened a test lab in GuangZhou -- read more here. Most of the work I've done which required CSA certification was done in the US. This could be a more time- and cost-efficient option for any of you exporting to North America. There are several high-quality electrical power supply manufacturers in Guandong Province, and I can think of several nice scenarios utilizing the GuangZhou-based lab to achieve and maintain certifications on those products.

If any of you have visited, or used the new lab, please let us know!

Wednesday, November 5, 2008

China's Human Rights Action Plan

China Economic Review just pointed me to this Financial Times article, "Beijing promises human rights initiative." According to the article, human rights groups are skeptical that the plan is anything more than hollow talk. Still, we have to be hopeful that the economic prosperity now enjoyed by many Chinese will be followed by expanding individual liberties, and an end to the government censorship of media.

I'm not a fan of the Communist Party, but President Hu has done an admirable job of guiding China during these tumultuous years of rapid growth. The National People's Congress, during the last session, expanded property rights laws and strengthened the judiciary.

On that note, I'm ever thankful to have been born in the good old USA, where my liberties were long ago guaranteed by a group of very wise men. We've elected a new President, and it is my sincere desire that our expression of liberty is an inspiration to the Chinese people, whatever form their government eventually takes.

Tuesday, November 4, 2008

Mei Wenti!

Those of us who have worked in China are used to the familiar response to just about any request -- "mei wenti (no problem)." Most often, it really means the problem is huge, but I'm not telling you about it. It's important to be aware of different common sayings, especially when the language and cultural barrier is wide. My western co-workers and I used to say that 'yes,' 'uh huh,' and 'ok' from our Chinese suppliers meant only "I hear you" not "I understand and agree."

While reading Mechanical Engineering this month I came across an article by Mia Doucet called "What Part of Yes Don't you Understand?" Mia is right on the mark, and nicely describes how "yes" is most often used as a neutral constant, and almost never signifies agreement. I've added Mia's website to my "links" list. From it, you can access many of her articles, though at this time, the article I described is not yet in the list. I expect it will be shortly, as another article published in Mechanical Engineering earlier this year is available.