How to manage with quality control in China? This case will introduce with some typical problems concerning establishment of quality control system which can face any company located in Europe and working with China

1. How to manage with quality control in China? This case will introduce with some typical problems concerning establishment of quality control system which can face any company located in Europe and working with ChinaBy Anna Taskaeva www.china-business-connect.com @BusinessChina0 e-Learning China Business

2. Characteristics of the Company Company “Italiana” finds customers in garments field (especially for baby and sky jackets). Now company is developing in a positive way. It has to agreement with the factory in Shanghai and with the factory in Dalian. The experience of the company “Italiana” in China is very short - only 2.5 years and it has one Chinese partner, but she lives in Milan. For “Italiana” the quality is basic, because it collaborates with the most important companies for baby in Italy, company cannot make any mistake with this kind of customer, but in the past the factory that “Italiana” collaborated already made a lot of mistakes. So it is the reason that company must present on field. Now “Italiana” is thinking in which way is better to do it, and company should also value the costs, and absolutely check who make the quality control, whether it use the same standard for us to proceed or not. In fact “Italiana” will prepare a practice test to the candidates in Shanghai.

3. During these two years “Italiana” has learned many things about the Chinese culture, and has found it very beautiful and deep under many aspects, but also there are lot of differences between Italian culture and Chinese and this differences must be know, otherwise is not possible collaborate with this country.

4. PROBLEM Company “Italiana” allowed to connect the factories directly with the customers. Company “Italiana” want to find a way of quality control in China. “Italiana” doesn’t have the organization in China for handle customers.

5. Requirements of “Italiana” to Quality control system NOW pay it (him or her) for each mission LATER (in some months) hire him or her, because “Italiana” will be able to handle more customers directly.

6. Time How to establish Quality control? Where to locate Quality control? Financial costs THE ISSUES

8. Where to locate Representative Office? Shanghai area Very expensive rental costs SOHO complex It is much cheaper Building maintenance Internet and all utilities The status is not so respectable in case if invite guests))) Qingdao area It is a port city between Dalian and Shanghai Rental costs are much cheaper Livable environment Beijing -You are more respected if your RO located in capital -You will have the most updated information regulatory and policies -You can connect with all institutions on the first hands basis Very expensive rental costs

9. The Options Recruit QA manager, located in China, who will help to setup RO and maintain it Use services of merchandising company which works with China for many years Not so easy to find good services and control their activity Economize money and time

10. The Options Establish a partnership with different companies in each city or with a national Quality control company like SCS which will do quality control The main advantage of this option is that “Italiana” pays just for each job (!!! Not giving them salary)

11. The Options Use pre-shipment inspection by the 3rd inspection company

12. Plan of actions 1) Set up the RO in Qingdao areaand at the same time establish pertnership with different companies in each city or with a national Quality control company like SCS which will do quality control. Doing this doesn't mean western companies are not as good as the local ones, all “Italiana” wants is to ensure its products will come to the quality it wants and it is important in the long run to build its business worldwide. Company needs a Chinese (agent) to know the cultural context, the mentality and the kind of tricks most suppliers may apply to international traders. 2) Company “Italiana’s” manager in the RO is preferably a Chinese who knows the trades and kinds of trading behaviors existing in China. Also through Chinese manager it is easier to learn from him on various issues about Chinese. 3) The most important issue is to provide company with trained and trusted staff. With careful selection, Chinese emplyees may be very loyal.....

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