Does China expose the concept of Quality Fade in QSR food products?

 
Aug. 13, 2014 | by Darrel Suderman

What is the concept of Quality Fade?

I first read about the concept of product "Quality Fade" in the July 25, 2014, issue of The Wall Street Journal in an editorial entitled "Buyers and Brands Beware in China." The concept was first attributed to China manufacturing expert Paul Midler. Midler has defined Quality Fade as "the deliberate and secretive habit of widening profit margins through a reduction in the quality of materials." According to an article posted on Wharton Knowledge, importers usually never notice what’s happening; downward changes are subtle but progressive. The initial production sample is fine, but with each successive production run, a bit more of the necessary inputs are missing.

What is maddening to importers is that quality fade often occurs in the last place an importer thinks to check. One American company had been importing a line of health and beauty care products for over a year when the cardboard boxes that held its product suddenly started collapsing under their own weight. There was no logical explanation for the collapse except quality fade, and the supplier in this case blamed sub-suppliers for replacing an acceptable cardboard box with ones that were inferior. The factory owner who practices quality fade knows exactly where he stands with his customer in these cat-and-mouse games. He has virtually nothing to lose and only margin to gain.

Get rich quick

In an effort to reduce risk, American companies are also looking to suppliers that are larger and seem more capable. The unfortunate fact about China’s larger factories, however, is they charge more for product than smaller factories do. It is as if economies of scale do not apply in China. There are several reasons why China suffers from such a problem, and one has to do with the role government plays in manufacturing.

Playing it short

Some blame quality problems and product recalls on the relentless pursuit of lower prices. Importers most often go to the cheapest supplier, so the supplier who quotes low and quietly cuts corners on quality is the one who wins. Honest suppliers who prefer to quote higher and offer a better quality product lose out. The supplier who obfuscates catches orders first — and most often.

OSI’s Husi Food Company

The fallout of using outdated meat has been widespread across several well-known QSR chains like Yum! Brands' KFC and Pizza Hut, McDonald’s, and others. Despite this quality process breakdown, the Wall Street Journal reported on July 25, 2014, that "McDonald’s Stands By Friend (OSI) in Crisis." But why?

False sense of food safety security with faulty supplier partners

The tendency of major QSR brands to stick with long time suppliers exposes a false sense of security with faulty supplier partners. One cause of this false sense of security is the close personal relationships that make people trust their supplier from long relationships – rather than continuously rotating outside corporate auditors and internal QA personnel. It also reveals that QA plateaus are reached in the American and international system that assumes continuous QA progressive improvement – but that’s not the case. For example, I thought American food manufacturing food companies understood and practiced lot tracking. But I recently discovered a major food company that DIDN’T!

Let’s flip the US food quality system upside down in foreign countries

For those who say that the international US monitored food quality programs are great – they are not! Let’s flip the international food quality system over like a mattress in foreign countries. If we don’t, more executives will be charged with criminal intent.

For more information our 3-day Advanced Batter and Breading Technology Workshop Oct. 7 to 9 at JBT FoodTech in Sandusky, OH, or The 10 Pillars of Food Innovation in Denver Oct. 21 to 23, 2014, contact me at dsuderman@foodbevbiz.com or 303-471-1443.


Topics: Equipment & Supplies , Operations Management


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