I don't think people realise that these days some of the best factories in the world are in China!

China has the money and infrastructure to spend large amounts of dollars on the best machinery in the world. They create amazing factories that can make anything, you just tell them the specs and the cost price. You can take absolutely anything to China, and you will find at least one factory that will be able to reproduce it to the exact same quality and specifications for a lot lower price. So much so, that you wouldn't even see the difference!

I think people should get off their high horses about Chinese manufacturing, just like they did in the 80's about Japanese manufacturing..

I agree with Dkatz. I see no other reason for moving production to China other than cost cutting and production volume. Logic and experience tells me, to do that, there has to be a compromise – That being quality. I’m a huge fan of B&O but the fact that their products are increasingly made in China or Korea is off-putting.

Terry - I am not saying that the Chinese are not capable of producing products. This is obvious with Apple products which are not bade quality to say the least but they are low level consumer products. No offense but an HP Laptop with Logitech Speaker Lapdesk is not what I consider to be high quality equipment! When I speak of quality I don't mean “specs” in fact most laptops have similar specs, it's about the build quality of the assembly. In this sense the Panasonic Toughbook which is built in Japan (they even make their motherboards in the same factory in Japan) of magnesium with a spillproof keyboard, shock sensors, a touchscreen, and super professional and heavy duty is a QUALITY ITEM.

The problem is that when you outsource you lose control because it is not your factory anymore. Yes they can try to be stringent and to an extent get somewhat decent quality but the BS8 does not commensurate the cost. It is manufactured for the same cost as units 1/5 of the price yet sold at 5 times more...

Moxxey – I have a lot of knowledge in manufacturing! I wrote my dissertation on outsourcing manufacturing to developing countries and on top of the years of research I have done, I have also visited dozens of factories around the world! British manufacturing is of excellent quality as is German. There will always be certain products which will lack in reliability as some British cars or even BMWs which are known for electrical problems. I have a Lotus which is handmade in Hethel, England and I love my car. It's been the most reliable car I have ever owned, moreso than my Volvo 760, Alfa Romeo GTV, Jeep Grand Cherokee, or others. I love knowing that the people who built it went through apprenticeship schemes training for years, that they are passionate about the company they work for and the cars they build. It's not something one can say about a company that hires people for tiny wages to build whatever for hundreds of companies like robots.

Apple differ from other manufacturers as you mentioned but they are still low level consumer products and reflect the cost. An iPod for 200-300 bucks is not that much, but if a handmade Danish/Italian/British/German Unit cost 1000 I would rather buy that to support the manufacturer that didn't outsource and that chose to support the local community and workers.

I will highly disagree with you on what you said about British workers not being interested in manufacturing. Most have been laid off because of outsourcing, it's not like companies are trying to produce in Britain but there are not enough workers to do the job. You are gravely mistaken if you think there are not extremely high quality and good British products. Look at Genesis car amplifiers which are completely handbuilt (even the circuit boards are hand soldered) in England. Their amplifiers are not that much more expensive than other brands which are made in China, yet they still turn a profit and the workers there are proud of their work. In fact not so long ago you could buy many British products for the same price as their outsourced counterparts, a case in point being Dyson which used to be made in England but is now made in Malaysia for 1/10 of the cost yet charging the same price if not more than when they were built in England! The companies are not trying to save the consumers money, they are trying to fill their pockets with lots more money! Hence there is a fallacy in your statement that it's all because consumers want cheaper products...

In terms of luxury brands, I don't consider Armani a luxury brand. Real luxury brands such as Louis Vuitton and Hermes don't outsource to China. My John Lobb shoes are bench made in England and so are Edward Greens which are the highest quality ready to wear shoes. There are so many insanely good quality British products that nobody can dispute. Rolls Royce is perhaps the best quality handcrafted car in the world, there are so many amazing products coming out of manufacturing in Britain that you would be surprised. Sunspel is another example, they make some of the best quality underwear in the world made in England! These are all truly high quality brands!

I don't worry about share prices or boardmembers or the CEO. This is exactly the problem with a lot of companies these days. They worry about their shareholders more than they do their consumers or their employees for that matter. If they can turn a higher profit and become mufti-millionaires In the process then why not make a higher profit? Who cares about the local community that suffers (look what happened to Detroit after GM pulled out to go to Mexico, thousands lost their livelihoods, many of whom worked for generations at GM) and the poverty that is then laid on to it or that the cities livelihood depends on its manufacturing sector?

As I mentioned Apple is an exception due to supply although cost is greatly reduced and profit margins are a lot higher. Although there are companies that manage to mass produce at a low cost and still meet supply and demand. A good example of this is American Apparel that produces all their products in the USA from US grown cotton. They charge about the same and actually less than many comparable brands that are made in China. There are always products you can buy for a comparable price that are made in the developed world. Another example is the German made champagne flutes I bought for $9 for a set of four brand new at the supermarket today, they are cheaper than Chinese ones I have seen for twice or three times as much and much better quality! There is even a vacuum manufacturer that brought manufacturing back to the USA called Riccar:

Some very interesting points and again, I agree with you.  Could the whole outsourcing thing be a symptom of a “throw away society” these days. My impression is that many want the latest and greatest gadgets with all the bells and whistles as cheaply as possible. Who cares if it only lasts 3 years instead of 30 years.  It will be replaced anyway when the next model is available.

Dkatz wrote:

Moxxey – I have a lot of knowledge in manufacturing! I wrote my dissertation on outsourcing manufacturing to developing countries..

I'm sure you did. That's something people tell me all the time. "hey, I mastered in this...!".

Well, this is my business. Tech publishing. Many years in this business, in a real-life environment.

Dkatz wrote:

When I speak of quality I don't mean “specs” in fact most laptops have similar specs, it's about the build quality of the assembly.

When you design a product, you create a specification. This specification contains detailed information about how the product should be manufactured - the materials you want using, for example. The specification also accounts for the cost of the materials, which is why you don't get moulded rubber on the back of the BS8, as an example.

It is HP and others who decide on this specification, not the manufacturer. Apple, HP and others do not decide "what can my manufacturer produce? Ok, we'll work around their limitations". It's the other way around. Apple design a product and a manufacturer is found who can meet these specifications, the job plan. 

It's us consumers that demand poorer quality materials, simply as we demand lowers prices. As a result, HP and others specify poorer quality plastics, simply to bring the manufacturering costs in on a level where they can make a (good profit).

As I said in another thread, when Apple, B&O and others specify, say, a rubber for their products, the manufacturer doesn't turn around and say "we can't do that, we can't source the material" and Apple/B&O turn around and say "ok, let's do it in a cheap plastic instead!". That's not how the process works - your disseration research should have given you these basics.

The build quality is specified by the company designing the product. The primary reason that Apple, B&O, HP and others are using Chinese manufacturers, is simply to do with ramping up production to a level - and price point - where they can make a decent profit. If you knew the first thing about Apple, B&O and other luxury brands who manufacture in China, you'd also know that they would never compromise on quality, unless they had to raise the price - which is why the BL4000 level BS8 can come in at <$1000.

If you want to blame someone for poor build quality, blame consumers for demanding super-cheap prices and wanting products that, frankly, they can replace sooner rather than later. 95% of consumers do not want top quality superbly made products which they'll keep for years. 

From what I have read even now in China, the average wage has risen significantly factories are struggling to keep there costs down as low as they could do due to labour costs.  I think China are more than capable of producing a well made product, at a great price.  Its labour costs that kill manufacturing, hense why no british car manufacturers are left( also the fact that they were crap)!  Its a bold move for B&O and I hope it works for them as I wouldnt pay £1500 for something made in denmark when it can be sold for 2/3 of the price if made in china!  

In the future I think we will be making more stuff in africa after china is to much! Give it 10 years and someone will build a plant there producing something or another!

Dkatz wrote:

The problem is that when you outsource you lose control because it is not your factory anymore. Yes they can try to be stringent and to an extent get somewhat decent quality but the BS8 does not commensurate the cost. It is manufactured for the same cost as units 1/5 of the price yet sold at 5 times more...

Firstly apologies for only responding to a short excerpt of you post -

Having Engineering, Manufacturing & Quality in the same building can actually have exactly the opposite effect! Finding problems in product which are ready to ship can create interesting issues which can result in the product being shipped anyway, knowing only a calculated percentage are likely to be returned. Other scenarios can and do occur with similar results - the rationale is often called a "business decision".

It is entirely possible, and I've seen it happen, that having product built by a third party results in standards being set high and being rigidly maintained. Any issues arising can be in effect "blamed" on someone else and product held until corrective actions have been put in place (and any resulting charges billed).

Having manufacturing and quality departments under the same plant manager is always an interesting watch!

Nickyg63 wrote:

 

In the future I think we will be making more stuff in africa after china is to much! Give it 10 years and someone will build a plant there producing something or another!

That will probably be the Chinese...and in a lot less than 10 years....

Massive land grab going on there ( and elsewhere) as China aquires oversees assetts.  Keep an eye out :-o

They are seemigly after resources at the moment - but once you own the land....

http://www.independent.co.uk/news/world/asia/fears-of-chinese-land-grab-as-beijings-billions-buy-up-resources-2095451.html

Moxxey – My dissertation was on how outsourcing manufacturing reduces control over the manufacturing process as you give up control to a third party. It was mainly however about how outsourcing manufacturing has caused a separation between rich and poor both in the developing and developed world. 10's of Millons have lost their jobs in the US alone in the past 20 years due to outsourcing manufacturing. This is all they knew how to do, retraining everyone in services is just unviable hence the unemployment rate rising. To top this off many in the third world are suffering too, yes their wages might cover basic food and amenities but they don't live an amazingly good life. On top of that the factory owners make hundreds of thousands, maybe millions off the thousands and thousands of people who work for pennies for them. Hence the separation between rich and poor, factory owners (less than 1% of the populations) getting richer whilst the rest of the population stays in poverty. In fact China has a lower rating than many African countries in terms of both development and poverty levels according to most international organizations and NGO's. They don't have the labour unions we do, I would pay 10 times more for a product because I respect companies that pay their employees well!

I have many friends who have their own companies, some that manufacture in their own country in their own factories and others who do outsource. The ones who outsource admit to me that they themselves think their product would be better quality if it were not outsourced (one of them is actually in publishing as well but not tech publishing). None of them have actually seen the factory (although this is not always the case, some big companies do go to China to visit the factories). None of them have LOWERED the prices to reflect the change to outsourcing for the consumer, some of them have even raised the prices whilst making a huge profit. My friends who didn’t outsource, such as my friend who manufactures nail nippers and cutting supplies in Japan, expanded and rebuilt his factory in Niigata, Japan so that he could meet the growing demand for his products. He created an even bigger workforce and has visited many factories in China, he could not find a single one that would manufacture to the quality that he demands.

That being said I have yet to find a laptop that's better built than a Panasonic Toughbook as far as build quality. I have yet to find a cotton softer than Italian ringspun cotton made in amazing Italian mills, have yet to find a wool finer than the super fine micron wools from New Zealand that win prizes everyear, have yet to see any kind of leather from China that even closely matches that of Hermes. Have yet to find glass as good quality as the ones you get from Murano in Italy.... The list can go on and on and China has yet to match the quality of those things... Why is it that the best violins in the world are made in Cremona? That nearly all audiophile products are made in developed countries? That all super professional photography and film equipment is made in developed countries? If China could match that quality they would and those products would be made there...

As mentioned before if China was so great and consumers were so stupid, then why are all the companies keeping the higher end stuff to their own manufacture? Why do Sinfoni and Audison make amps in Italy when they can make them in China for 1/10 of the price and make 10 times the profit? Why did Silicon Graphics make computers in the US from mostly US components and US made circuit boards, etc... (I have I owned many silicon graphics machines and parts) whilst the “consumer brands” made theirs in China? Yes perhaps part of it can be blamed on the consumer, but I am willing to pay a higher price for something that is not made in China.

Today I bought yet another thing – beautiful handmade Italian ceramic plates on sale for $2 (normally $8 which is still not expensive). Why would I buy Chinese ones for the same price? My point is you don't have to pay an arm and a leg to buy things which are not made in China if you are a consumer seeking cheaper products!

I don't think Apple is that much of a luxury brand, it's just an average consumer brand in my eyes. B&O is a luxury brand and that's why I can't see them making a <$1000 product of any sort (with the exception of MP3 player, headhphones, remotes or other accessories), especially if it is made in China. As I said, people who buy B&O are not average consumers like those who buy Bose and that's why I don't want it to become that kind of brand. People who bought B&O and paid $5000-10,000 for a pair of speakers were NOT the average consumers demanding lower prices that you are talking about. If they were they would not buy that! This is exactly my point!

Nicky – If you cannot pay 1500 quid for a Bang and Olufsen product why are you even a B&O enthusiast? People who buy B&O are people who are willing to pay thousands for decent quality speakers. The average wages are kept super low in China even if the have gone up they are still low enough for people not to go to other countries. There are still a few small British car manufacturrers that are independent such as Morgan. British cars are all made in Britain STILL, Rolls Royce, Bentley, Lotus (which I have and love and think is the best company in the world), Jaguar, the list goes on and on, they might be owned by a foreign company but they are all made in Britain mostly by British workers!

Nobody has answered my question yet about the Beosound 2 and Headphones...