Wednesday, September 23, 2015

Proprietary Formula for Aluminum?

Quality Fade - When Manufacturers Cut Corners
Workers in China separating recycled materials

Paul Midler coined the useful term “quality fade” in his book Poorly Made in China.1 Midler was a recent Wharton business school graduate when he traveled to China in 2001 to use his business acumen and knowledge of Chinese languages to help Western companies do business in the booming region. His book and blogs are well worth checking out, but let’s get to his key finding, quality fade, which he defines as “the deliberate and secretive habit of widening profit margins through a reduction in the quality of materials.”

Here’s an example of how quality fade can work:
An American company designs a new high-rise building. Part of the company’s design includes aluminum supports to hold the concrete as it is poured. Desiring to save significant costs on fabricating the aluminum supports, the company contracts with a Chinese company. Now, the American company doesn’t just take it on good faith that the Chinese company will provide the goods according to specifications. The American company goes to China and oversees the initial rounds of production to ensure that specifications are met with precision. Satisfied, the American company’s representatives return to the States, and the company begins receiving the shipments of its perfect aluminum supports.
The first few shipments are completely satisfactory. Everybody’s happy. After awhile, though, the American company runs a test on the aluminum and finds its quality is compromised. In fact, some of the aluminum weighs 90 percent less than it should.
A serious fade from the initial high quality has occurred. What happened? According to Midler, what happened was a deliberate and unannounced change in the Chinese company’s manufacturing process.
The above account is true. Midler documents it in a podcast produced by the Wharton School of Businessand elsewhere. Midler claims that in an effort to maximize profit, the Chinese company simply scrimped on their materials but created a product that looked and felt like the product that the American company originally ordered.

Conflicts of Interest

Another problem with third-party testing is that some testing companies are incentivized to pass the products they’re testing. We’ve seen this time and again in the financial services industry and in scandals like Enron, in which underwriters and regulatory agencies profit more once a product passes inspection. Conflicts of interest abound, and in very few cases can consumers catch up to all the problems in the supply chain.

Trust

Quality fade can happen with any product made anywhere. The problem seems to be especially egregious with Chinese manufacturers lately, but no country, industry or manufacturer is immune.
As consumers, what can we do to protect ourselves against quality fade? It doesn't make sense that we would test the products we buy in the stores. We trust that the companies we buy from do that for us. On a certain level, we’re stuck with good old-fashioned trust. Familiarity with a product and a company, transparency in manufacturing processes, traceability – all of these may go a lot farther toward convincing us that we are getting what paid for than a gold sticker that says “Quality Assured.”
  1. Midler, Paul. Poorly made in China: an insider’s account of the China production game. John Wiley and Sons, Inc. Hoboken, New Jersey. 2011
OK, so how does this relate to The Sliding Door Company products, you might ask? They claim to own their own factory (in China).  
They must have quality control procedures in place, right?  Well, you would think so... but they apparently don't have as much quality "control" as they would like everyone to believe.  For example, there are "ramps" that go on the edges of their tracks.  These ramps are aluminum and go through a process called "anodizing" which applies a color to the ramps.  The factory was using wires to suspend the ramps and this process left a blemish (like a scratch) on the ramps.  Doron Polus, the CEO of TSDC, visited the Chinese factory to get to the bottom of this issue, only to come back with the explanation that nothing could be done about the blemishes.  The customers would have to live with them.  So in this case, a known quality issue that could be controlled is being ignored.  The factory had the last word here.  This is just one of many cases. 



Ingots of a known Aluminum Alloy
Blemishes are one thing, but how about structural integrity? Most TSDC products are made of aluminum - their door and panel frames as well as the structural members that support the doors and panels.  Aluminum alloy is graded by strength and treatment processes - as well as the composition of the alloy itself.  Here's a listing of Aluminum Alloys.  When something has a structural requirement, calculations are based on the properties of the aluminum alloy being used.  So, for example, a component made of 6061-T6 aluminum has properties known to engineers throughout the world.  Here's what the smelting process looks like when real ingots of aluminum alloy are being used.  The ingots are made of a specific aluminum alloy and products made from this foundry will have known strength characteristics.

So, what grade of aluminum does The Sliding Door Company use in its products? Let's check their FAQ page:
"Is the framework aluminum or wood?" 
"Our frames are made from our own, *proprietary formula aluminum*, which is light yet super strong and durable. Our aluminum is also more environmentally friendly than wood."
Alright then... No known aluminum alloy was good enough for The Sliding Door Company - they had to come up with a "proprietary formula" that I'll bet Alcoa would love to get their hands on.  I'm sure, when pressed in court, they will be able to produce this proprietary formula, and the test methods they use to ensure their products meet the properties and standards they expect from their proprietary formula aluminum.  I'm guessing they've applied for a patent... wouldn't you?

I'd like to offer another possibility... 
Share a Coke with The Sliding Door Company
This type of recycling of Aluminum is not uncommon in China. And products made like this are suitable for decorative and other applications - but NOT suitable as structural materials. TSDC's own engineering documents don't talk about a "proprietary formula" of aluminum when engineering calculations were made and signed by an engineer.  Lacking evidence of a "proprietary formula" I suggest the composition of the aluminum in TSDC products is unknown and certainly not acceptable for structural and overhead applications.  


So, what we have here could have been a case of "quality fade" but for the admission of The Sliding Door Company (through their "proprietary formula" baloney) that they actually KNOW this is going on.  Does this help their bottom line?  One can easily imagine that billets of certified 6061 aluminum cost a lot more than aluminum lawn chairs and beer cans.  
  




No comments: