californiamilleghia said:
"once upon a time I ordered from China. In addition to specifying what factories were used we also had the right to reject an entire batch if the failure rate was above X amount."
And they will sell the rejects to someone else , they are not going to scrap them and eat the cost !
a friends company makes consumer electronics in China 100s of millions a year , they pay for all the design work , tooling etc ,
But he can go to the local Electronic market in any large Chinese city and 'His" product is for sale , some with blank boxes and some with his boxes !
Just look at aliexpress , you can buy all kinds of products, some are knockoffs, some out of the same tooling as the original.
BEWARE !
Um no.................not the way I do contracts. We inspected them when they arrived here, if they failed they were scraped and there would be no RMA as these were proprietary parts specific to our machines (slot machines manufacturer). Additionally there would be no retail market for the parts, so they couldn't sell them locally. It's a great incentive to have proper quality control when you know you're going to eat tens of thousands of dollars if you don't.
As for the cost, in my particular case it wasn't 100% about cost savings, at the time local suppliers were having capacity issues.
By the time you deal with the landed costs, the additional logistics and other factors you only end up saving between 3-5%. Of course when your are making 500,000 somethings that adds up to a lot of money.
The Chinese Government has a habit of changing the rules/regulations in the middle of the game. They make some really capricious decisions...........almost vendetta like.
While I may buy Chinese products, if it were ever solely my decision, I certainly wouldn't manufacture in China. That 3-5% savings isn't worth the almost 100% certainty that your product will be sold on the black market and your IP stolen at some level.