Are we done in China yet?Presented byRichard JiaEx Zarpac Inc. Executive

Pain ≥ Gain Low cost = low quality Consistence Surprises Total cost of ownership Overheads up Gap in cultures

Case study-1 Client in NA required bulky standard

conveyors hundred of meters For any standard section, NA local

vendor is cheaper than from China after including shipping cost and timing on delivery, plus risks on final quality and after sales service

No chance to win in such game

Continued Meanwhile the client had some customized

project going on though still part of conveyors

Our Canadian headquarters was auditing and supervising all drawings and production and FAT in China including crating.

Brain labor and overtime is still competitive Plus this sort of low end projects do not

need much on services and parts.

Case study-2 High end soup filler, build to print Imperial to metric Understand NA style drawings and

documentations Risk started from raw material, such SST,

food grade plastic or rubber There was almost no manufacturing

practice You have to be on site to watch

Continued Rework due to ill preparation, under

estimate from both sizes and mindset It took 2 years to deliver the filler on site Not worth it One time right from the very beginning

Where is the opportunity Industrial base and tradition Hundreds of graduates on mechanical

and automation from schools Seek and train up local partner, or

establish your own team We have learned enough from past,

know short cut

Case study - 3 Complex automated system for secondary

packaging involved robotics up to 6 axis We suggested the 1st prototype to be

provided in Canada, roll out in China. Rejected

Nightmare started at this point Local R&D, electrical programming

capability, supply chain, education, mix up lead to mess up

Continued More investment in cash from both sides Longer delivery OEE failure So much indirect expenses, expats, FAT

staff Mentally suffered

Best value model Fully understand what is the best from West and

China How to pick up and combine Quality, flexibility, safety and cost effective Well prepared home work is a must Communication is not easy at all Supply chain management Focus on valued added areas Professional 3rd party service Localized team with international thinking

What can we do Bridge, toll and shortcut Connections with vendor, government Direction of approaches Be 3rd man or contractor Influences on both sides