By Everette Phillips

In the 1980s, on one of my first trips to Asia as an engineer, I was in Japan visiting some of the plants that make Seiko watch components. Part of my job was to help transfer precision watch manufacturing equipment and adapt it to new markets oriented toward custom equipment for making calculators, electronic auto parts, and medical equipment.

We were working with a special shaft made to reach out 700 mm and to rotate. The precision requirements were in the 0.0001-inch range, and the engineers I had been working with were heaping praise on the nearby precision machine shop that made some of the shaft’s key precision components. 

When we later went to visit the machine shop in Tokyo, I was expecting a surgically clean facility not unlike some of the Seiko Instruments facilities where I had been working. I was surprised when the car arrived at a group of high-rise apartments, and my host told me that we were close. We then pulled into a small parking lot in front of a large single-story building with a tin roof. The parking lot and building were surrounded by tall apartment buildings with balconies that looked down on them. It reminded me of one of those cartoons where, after a solitary homeowner holds out on a new development, his little house is surrounded by towering skyscrapers.

As we entered the building, I saw that the floors were dirt. But the building felt larger than it looked, and had a light and airy feel. There were many CNC machines operating, each sitting on its own concrete pedestal. I had seen concrete floors, and wooden floors in GM's massive transmission plant in Michigan as well as in New England manufacturing centers built in converted multistory mills. But this was the first facility where I had seen dirt floors.

Had I not had the prior experience of working with excellent products from the facility before I visited, the dirt floors would have put me off. I would have been inclined to judge the facility with a strong negative bias because of the dirt floors.

Today, as I travel in Asia, I still come across facilities with dirt floors. In China, where whole communities are being torn down, reconfigured, and rebuilt, I have come across facilities that look like they are in a war zone, with neighboring walls torn down or streets that end and start randomly.

You cannot judge the production of a facility by its appearance; you must judge it by its performance. Facilities grow and expand rapidly in China, and each entrepreneur strives for a "showcase" facility. Many achieve this dream, but it usually means that in addition to their existing three dirt-floor facilities of 60,000 square feet, they have added a new 30,000-square-foot showcase modern facility with 10,000 square feet of offices.

Western managers sometimes complain to me that they were shown one facility but that their production was done in another. Sometimes, I think this is simply a case of a vendor trying to put its best foot forward. But sometimes, it is also a case of sleight of hand. 

The best protection -- and the method I use -- is to require a first article when a manufacturer with which I am working proposes any change in equipment, location, or subcontractor. I have employees in China, and regular plant visits help me easily identify if the active production location changes. There are other signs in the documentation we require and in our production management systems that we use to spot changes. When you have regular interaction, you tend to notice the subtle changes that point to a change in equipment, production team, location, or subcontractor.

When you have a focus on best price with highest quality and timely delivery, you then have to decide what your priority is regarding the appearance of plants used by suppliers and contractors. Although I know that quality and appearance are often aligned, and while I appreciate the teachings and lessons of Lean manufacturing, I want to emphasize that floor type does not always correlate to quality of output -- especially in Asia.

Everette Phillips is CEO and president of Global Manufacturing Network, a provider of contract manufacturing, sourcing, and logistics services for products and components with a focus on items with special engineering requirements.