The last decade has seen a significant increase in the importation of semi and fully fabricated steel-based products coming in from lower labour cost countries such as China. The reason for this surge is driven largely by the higher cost of labour in fabricating product locally and at times capacity of local manufacturers to meet some types of fabricated items.

In this article, we discuss the 6 biggest mistakes we have seen with importers of metal or steel-based products into Australia:

Mistake 1: Assume that manufacturers are all ‘large’ and ‘specialised’

Most China-based manufacturers do not specialise in any particular type of sector. For example, a manufacturer who fabricates stainless steel commercial kitchen stoves this month may fabricate electrical junction boxes the following month. The common denominator in this case lies with the fabricator’s access to stainless steel sheeting and other raw materials, competent labour who can operate tig welders, appropriate punching machines and CNC bending machinery.

The mistake most Australian clients make is that they assume that their ‘commercial kitchen stove manufacturer’ is only manufacturing kitchen stoves day-after-day. This means that these manufacturers may not necessarily be across the requirements of fabricating, say, an electrical junction box which needs to comply to a particular IP rating, ensure that the rubber seals used are UV rated and that the din rails will support parts used here in Australia.

To achieve a level of consistency necessary to produce either the commercial kitchen stove or the electrical junction box requires a level of detail from the drawings, an ability to check that the finish product meets those drawings and a range of other issues which come about from the simple fact that this manufacturer simply does make this every single day.

Mistake 2: Assume that quality is consistent

China is still largely a developing country. It’s not economically homogenous like Australia where the standard of living in Perth is more or less the same in Melbourne. Leaving aside the massive glass and steel towers in Shanghai and Beijing for a minute and you get the real China – largely agrarian, comprised of hundreds of thousands of smaller towns and villages. It is in these small towns (sometimes villages) that most steel fabricated products destined for Australia comes from.

The reality of the matter is that most Aussie clients simply can’t absorb the volumes of products expected by a Chinese manufacturer located in a Tier-1 city like Shanghai or Shenzhen. We’re a much smaller country with a much smaller population. Cities like Shanghai and Shenzhen pump out products in mind-boggling volumes destined for the much larger markets in the US and Europe. Unsurprisingly, that’s where the export production machinery is focused at.

This means that the kind of manufacturers who are happy to produce product in smaller volumes for the Australian market are in Tier-2 cities like Hangzhou (Zhejiang Province), Nanjing (Jiangsu Province) or Tianjin.

What this also means is that repetitive manufacturing (doing the same product over and over again) is at a much lower ratio. Mistakes occur more frequently due to a higher turnover of staff in smaller cities (due to lower salaries) etc.

Tier-2 cities export less to western developed countries. This means that manufacturers have a different view of what is regarded as ‘acceptable’ from a quality perspective.

In my earlier years working with Chinese manufacturers in Ningbo, I too struggled with quality issues while the suppliers I worked with got frustrated with me as they viewed my expectations as extreme or unreasonable. I’ve lost count of the number of times where I’ve been sorely disappointed with quality issues resulting in me having to reject whole deliveries and have them returned to the manufacturer. In my case, I had the luxury of inspecting and returning defective product to a manufacturer as I was based in China. Once the product leaves China in a container, there are very few options left to rectify defective product.

Mistake 3: Poor preparation for metal parts prior to coating application

China based manufacturers are under perpetual pressure to reduce the cost of their products due to the intense pressure driven by the sheer number of suppliers. One way out of this is by cutting corners.

This can be done by reducing the amount of time spent on preparing metal surfaces before they get powder coated or wet sprayed – or in some cases no preparation at all. Metal which is not subjected to adequate sand blasting or acid washing is one such example.

The way exporters work is that they will take a photo of the product before it gets packed and based on a sampling exercise of sorts (usually delivered by photos), the supplier gets paid. This is where the problem starts as a poorly prepare piece of steel will rust in the 3 weeks it takes between the time it leaves port in China and arrives in the port of Sydney.

There is little recourse left once money is paid and once the product arrives into Australia. The only viable options left include:

a. Client undertakes remedial work at their own cost.

b. Client disposes off the whole product at their own cost.

Mistake 4: Assume that all products are sourced from the same factory

A lot of clients are not aware that the supplier they believe they are in contract with may sub-contract out that work to another factory. This opens up a broad range of issues ranging from accountability, consistency and quality control – issues which crop up when things go wrong.

This usually happens with factories where the supplying factory may be unable to meet the order due to capacity constraints and in turn may sub-contract out the work to a neighbouring factory. This is especially so where a number of factories may be in close physical proximity with each other – where some factories may be owned and operated by different family members.

Problems occur when quality issues are detected and that is when the finger-pointing starts!

Mistake 5: Assume that packing will be done properly

Importers unfamiliar with how Chinese factories work get caught out repeatly for this one.

Manufacturers in China are largely not motivated to pack your products in a manner which reduces damage to the product. They are motivated by using the cheapest materials to pack your product as many view that any damage to the product while in transit to Australia is not their responsibility.

Similarly, most manufacturers are also not aware of Australian OHS laws. Poorly constructed pallets and framing holding heavy metal products can potentially give way once they arrive in Australia exposing your team to dangerous situations such as the risk of crushing and collapse of heavy objects as items are being forklifted out of the container.

Most manufacturers are also not aware that unpacking in Australia usually only involves a single forklift driver and a spotter. Across most parts of China, packing is usually conducted by a generous number of labourers.

Mistake 6: Overdependency on a manufacturer for Quality Control

Export is a business transaction which ends once the product is packed into a container. For most Chinese manufacturers, all QA evidence leads up until this point beyond which they are not responsible for.

What most customers based in Australia can’t see are quality issues which can seriously impact a product’s ability to be used or re-sold. Errors such as the wrong tolerances, wrong sizes, incorrect material (say, stainless steel 304 being passed off as stainless steel 316) etc are elements which are near impossible to check unless you personally inspect the goods before they are packed.