JEC concept

From “Made in China” to “Moulded in China.”

JEC is a concept that is gradually being developed and implemented by a medium-sized Chinese mould manufacturer called QY (Quality) moulding.

JEC [check] stands for:

Japanese quality                                      

English / European-style communication

Chinese prices

A more representative industry than mould making is hardly conceivable in a country dubbed the factory of the world. At the basis of all mass-produced plastic parts and products lies a mould. A mould is a tool consisting of two steel plates that are hollowed out in a certain shape. When these mould plates are pressed together, i.e. when the mould closes, the hollow part is filled with heated plastic. The injected material consequently adopts the form of the cavity. After the material solidifies, the mould opens and a plastic part is ejected.

QY moulding sets itself apart from other Chinese mould manufacturers by the fact that it has succeeded in exporting to the Japanese market for a good number of years, serving clients like Sony and Casio. During this period, QY moulding was able to carefully study Japanese management systems like Kaizen and Just-in-Time-Manufacturing, as well as getting used to the procedures and requirements for making products suitable for Nippon. Japanese products are renown for being of the highest quality in the world.  

Because the popularization of smartphones had a negative influence on Casio camera sales, QY moulding lost this important account and had to start looking for alternative markets. The choice fell on Europe, and more in particular The Netherlands, home to a crowded and excellent proof market. Management felt that Chinese pricing would suffice to be successful in the low countries. They were wrong. It soon became apparent there was a missing link. Japan is a cultural and linguistic neighbor. Despite historical sensitivities, communication was a relatively minor issue and the market at boardable distance. This was not the case for The Netherlands. The venture was at imminent risk of failure, a situation countless Chinese peers are facing every day. QY moulding was eventually able to overcome its difficulties by focusing on and remedying the communication problem, proving that Chinese companies are getting smarter and educating themselves.

Of the three JEC ingredients, communication is the tribological crux. Communication equals power. In an earlier post I claimed that brand activation occurs when optimization flexes into innovation. In the case of QY moulding, it can be argued that optimization is effectively adding the Chinese-English communication element to the business mix, allowing QY moulding to survive in a foreign market and learn about new materials, technologies, and even product development. In the last 35 years, numerous Western companies have paid their dues when it comes to dealing with China. When their counterparts say “yes” it sometimes means “no.” When they hear “it’s not a big problem,” alarm bells go off. In turn, the Chinese have learned from these interactions. QY moulding is developing a recipe to counter this mistrust and is now building an organization based on the JEC concept.

The difficulty with theorems like this is fulfilling the promise. The Chinese are masters at ruling by slogans. They are also masters, in the moulding industry, at fabricating perfect samples. The quality of these samples can, alas, not always be reproduced by the Western client. This is frustrating for the buying party who, in an ideal world, wants to unpack the tool purchased, install it on the machine, and recuperate his investment within the shortest possible delay. The problem could be solved by having a capable injection moulder, preferably a Westerner, involved in the trials in China. However, the injection moulding process is higher up the value chain, requiring ever-increasing knowledge of materials, especially of engineering and recyclable plastics. In other words, it is an expensive add-on and workarounds are readily found by your average Chinese toolmaker.

The European communication ingredient is even higher up the value chain than quality control. What is QY moulding doing to lift JEC from a hollow acronym to a working model and what are the challenges that the company is facing? Striving for Japanese quality and Chinese price-setting have been part of the company strategy for many years. It is the European communication aspect that is food for more comprehensive reflection and analysis. Marketing, sales, and even CSR are issues that come to mind. But also, or even more so, the ‘trust’ factor. How does a Chinese company that nobody heard of before gain trust from its clients? Step one is establishing a legal entity in the geographical area you are going to operate in. That is easy. For QY moulding, step two was the realization that pricing alone was not enough to sell moulds in Europe. If one cannot make a semi-intelligible phone call or write a semi-comprehensible email, this should not have come as a surprise.

Trust and transparency can be achieved by localizing, just as European and American companies need to localize in China. This means hiring capable local staff and gaining the confidence of that staff and business partners. It means developing marketing collateral aimed at local markets. Europe is not one country. It is a patchwork of different markets that require individual approaches. It is looking beyond the magic words “purchasing order” and establishing trust for the longer term. Trust in terms of quality, trust in terms of pricing, and trust in terms of communication. Sales targets and turnover are good. Trust is better. QY moulding is aiming to achieve this by aligning the internal organization linguistically, culturally, technically, and financially.

The questions being framed, and, when possible, measured, reverberate along the following lines:

Are we crafting and selling Japanese quality? Do the samples meet European expectations and do we also master and monitor the injection moulding process? Are we listening and learning from the client? What precautions are taken not to slip back into old habits of slackness on the work floor or falling for the luring quick win inspired by purchasing orders?

Are we using European standard software solutions within the organization to guarantee smooth communication and are we unburdening the client? Are we taking away the client’s often justified concerns in dealing with China? Are we explaining sufficiently clearly what is the motivation behind certain situations and business practices? Can we rely on a team of believers who have proven track records in Europe and America?

Does our pricing reflect what can be expected from a Chinese company? What are we doing to remain competitive vis-à-vis local European suppliers? Are we innovating? Are we thinking about CSR?

Are marketing, sales, and back-office united in driving home the JEC message? How is the organization communicating with the Chinese factory on the one side and overseas clients on the other? Clients are not afraid of problems. They are afraid of problems that are not being addressed and solved. If a “yes” is actually a “don’t know.” “maybe,” or a “no,” the client wants to hear it. “Call a mould a mould,” if you will.

A Chinese saying goes [Hao shi duo mo,]* meaning “good things require careful polishing.” From the very beginning, QY moulding has paid due attention to the optimization of its moulds. It is now working on polishing its business model to achieve growth. “Moulded in China.” Check. [JEC].