19 Replies Last post: Aug 4, 2008 6:54 AM by no1toolmkr   1 2 Previous Next
Click to view hoovertw's profile Supervisor 8 posts since
May 9, 2008

Jul 16, 2008 11:53 AM

Why Do U.S. Companies Outsource Differently Than European Companies?

Hi all,

Just joined MFGX and have had some interesting reading so far.

Have a question to ask. I have been in manufacturing in Taiwan and China since the 80's and seen many changes. I work with aluminum die casting molds for local and overseas customers and also assist companies to source good casters if they require.

In the discussions i've seen there is a lot of politics and blame on China for harder times at home.

My question is now! What is the difference between US companies and European? I am Swedish and the European companies seems to have a more responsible approach to out sourcing their products and require qualities to match what they get in Europe. They do also have a unspoken social responsibility towards the comunities they operate in, meaning that they wont lay out all their parts and or assemblies to for example China. It seems that the US customers are 99% looking at price, quality takes second stage as does their responsibility for their local suppliers who do give work to the American public.

I am not a political guy and I know that you can get excellent quality from China if you work the right way, and if companies took some responsibility in the social aspect they would not move whole production lines to places like China. Life or Success should be based on right price for right quality.

Hoover

Click to view aj's profile MFGxMaster 65 posts since
Mar 8, 2007
Hey, Hoover ... what kind of trouble do you envision for China? Economic, or something else? And do you see any single country challenging China directly in the future as the world's manufacturing base?
Click to view aschultz's profile Supervisor 4 posts since
Mar 21, 2007
Hey Hoover!

I had this same discussion with a buyer today. Here's the reality.....the Euro is stronger than the dollar. And when faced with this economic fact, Americans have to look at pricing first. Raw material and oil prices are going up and the value of the dollar is going down. More and more buyers are simply settling for satisfactory quality because they are losing their profit margins and it's harder and harder to be competitive. They can no longer afford their local suppliers and are turning to their overseas options AKA China. Whearas Europe is turning to the US because for some buyers they are now on the low cost country list. To me, its simply a reflection of our global marketplace and economics.
Click to view no1toolmkr's profile Expert 78 posts since
Mar 9, 2007

Can I jump in here?

I know your right about European companies outsource differently than US And I know for sure you can get quality parts from China as well.

As to why europe is like that? I don't know.

I can tell you this I don't quote european customers for several reasons.

1) they allways want shipping and duties paid

2) They want it quoted in their money.

3) I can't very often find them with a complete print. They have this unwritten rule that they get to make up as they go about what they realy want.

Take a look at a NASA or other high level US aerospace RFQ.

not only is it complete. it usually is accompanied with a CAD model with a descriptive understanding of whats important or whats not.

and THAT is why US companies are more concerned with the price. 9 of 10 times the drawing leaves nothing to question about what they want.

Europeans will say something like general tolerance .1 mm and then they "unwritten rule here"

expect that to be held every where from everything including where ever they wish to aply it,

or not.

You see, they get to over ride anything at their discretion.

By sheer interpretation of their drawings, They aren't interested in playing fair with vendors and make every attempt to dominate the business transaction by stipulating all the rules.

at least from this vendor, it just gets them ignored.

I have lots of options its not a big loss.

Click to view aj's profile MFGxMaster 65 posts since
Mar 8, 2007
Nice take, Hoover. Especially on the automotive situation. How are U.S. automotive products seen in China. I know that Buick (GM) was moving some product there. Any others? It's absolutely potentially huge for those guys, if they'd pursue it.
Click to view aj's profile MFGxMaster 65 posts since
Mar 8, 2007
Gotcha. During my visits to Shanghai and from what I hear from my contacts there, you're right in line with them. Manufacturers are seeing "the light" regarding building/assembling product close to the market (look at the "foreign" auto manufacturers establishing local plants in the U.S.). I can see a HUGE build up coming in China from all builders as the middle class emerges there.

Hoov, where are you at in China? What brings you there? How long have you been there?

AJ
Click to view no1toolmkr's profile Expert 78 posts since
Mar 9, 2007

Wouldn't that just blow away the UAW? GM moves to china for a more loyal following LOL Just goes to show how problems tend to be self correcting if left alone, I just love that. I'm not a big union fan.

Well anyways as far as the european market? maybe. but for right now I've pretty much got my plate full. I actually turn down or don't respond to over half my domestic invited RFQ's pursuing european buyers makes sense though I might be able to offer them a better deal beacause of the weak dollar right now. I'm deliberately staying small. no more than a couple employees and I'm going to automate all machinery to the point of robots running the machines. I figure its going to take me about 5 more years. Paying top dollar for skilled employess isn't making sense anymore. I can do more with a couple networked CNC machines than an entire work force of skilled labor and I'm getting better at it every day.

I'm trying to move away from being a job shop. I'm starting to market some special tooling as my own line of product. Looking for a higher profit margin. I can do the job shop parts probably better now than ever and with less skilled labor and compete better than ever however the opportunities that are revealing themselves now look just too good. I think I can hit the global stage with marketable product, specifically perishable tooling.

One of these days I'm sure the global environment will be one but untill then I don't like the way the europeans outsource. I've never seen an RFQ that didn't ask for it to be quoted in the euro or one that didn't want it DDP My information maybe skewed a little though because the only european RFQ's Ive seen have been on MFG or sourcing parts. And I don't believe I should ever have to submit my interpretation of the drawing and the quality I think its asking for. I feel I should be able to make the part on the drawing without ever talking to anyone about what they want.

The drawing or print should describe every conceivable aspect of the part in every way. Isn't that the purpose of having a print? anything less to me is just a sketch and I don't quote sketches.

Click to view no1toolmkr's profile Expert 78 posts since
Mar 9, 2007

Hey Hoover where'd ya go. thought you wanted to join this american show and tell us how good the european and asian way is so good. So far I think your losing the argument and ran away.

Ya got a better game than that don't you?

and its not that general tolerances aren't reachable I think they are. Its that its not clear what a general tolerance is. I'll say it again. a european drawing is not clear about what it is they want. and what the **** do you mean I got to buy a european standard to understand it. Thats like totally stupid how on earth do you expect someone around the globe to get that one right?

Click to view no1toolmkr's profile Expert 78 posts since
Mar 9, 2007

Ok I googled ASTM and they wanted 30 buck or so for a download of the standards however I've allways been able to find ASTM standards in the machinist handbook for free. There are some standards that you buy into like QS9000 but they are not realy a standard its a policy of procedures and paperwork documenting an inspection process, not a standard. There is one thing that comes to mind when I think global and standard and thats the plackards on trucks and shipping containers, you know the radio active skull and cross bones and the oxidizer and fuel plackards. those are inrternational standards developed by the UN. I think. ASTM is an international standard thats been around a while and not necesarily an american standard. it covers things like class of a fit for a screw thread both metric and inch. which is comonly published in different books and you don't have to buy it.

Also I've said it in another discussion I think, Latin is a language adopted as a standard for medical text so that the world can read on about all the new things discovered by a global comunity and that was done in the 18th century I believe. No I don't believe anyone here is selling a set of standards you have to buy other than a set of joe blocks or something. I'm not convinced that a buyer can or is going to be able to use a standard that requires a perspective suplyer to buy into to be able to interpret the drawing. Thats beyond retarded in thinking and doesn't go well with a global market and flies right in the face of open sourcing. Its not even suportive of getting accurate quotes from your own local vendors much less around the globe.

I'm a journeyman Tool Maker of 30 years. I can make pretty much any tool you could imagine for any purpose. I aprenticed on machines that didn't even have a DRO I learned to figure and back figure math quicker than most people can find their calculator. Today I have an entire tool shop full of networked CNC machinery. There is nothing you could imagine that I couldn't make here. Read some of my other discussions and blog you'll figure out who I am and what kind of tools I can make.

I'm going to say it again, the purpose of the drawing is to convey all aspects of the part so that it can be manufactured. There is no reason for any amount of colaboration if the drawing is complete. anything less than a complete drawing is a sketch. Even a sketch can have all the information necesary. A drawing that has reference to a hidden or proprietary code of standards is simply asking for problems. Any company using such a standard isn't genuine about globally sourcing their parts. They are extorting money and time that doesn't belong to them.

Its too easy to just make a drawing that anyone can understand. Even if they speak a different language. I don't know chinese or latin but I bet I could make a perfect sketch that a man in China could use to make my part accurately and I could do this without even trying. There is more than a sufficient number of ways to dimension and tolerance a drawing accurately and completely So I'll hold my ground on this. Buyers may indeed be looking for vendors to work closer with them to develop their stuff and I've more than once made recomendations or sugested changes to help the manufacture of their parts, the more I do this the more I realize that the buyers are just taking advantage of what I know. I simply find a way to get them to pay more I guess. however i'm not going to put up with this being deliberately incorporated in the drawings. I should not have to colaborate with anyone about the interpretation of a drawing. I'm finding it more insulting than ever if a company is deliberately incorporating the need to colaborate in their drawings by loosely sketching the part so as to require colaboration on the interpretation.

I think that as time goes on and open sourcing becomes more prevelent the corporations that are distributing this trash will get spanked because its not a working formula. Its a recipe to steal from the vendors.