Outsourcing Additive Manufacturing to China? #ask3dpl

Chinese Flag over Pudong. Shanghai, China © HD Grzywnowicz, 2015

 
 

 

Good morning #3dpl,

I’m currently studying Product Design at University of X here in the UK. I really enjoy CAD but don’t see myself as a part of big engineering company after I graduate. My dream is to set up my own studio with friends and specialise in customisable electronic accessories for mobile devices - I currently design customisable brackets for phones and tablets and sell them via Shapeways but I’m looking for a cheaper solution as I see I could be making more money if I got a cheaper service. I am currently preparing a Kickstarter campaign and, if successful, I want to look into outsourcing my production of first 10,000pcs and go further from there. I want to go as close to price per unit as possible.

I was thinking about outsourcing my 3D printing in China, for the rates are really competitive. I also like that oftentimes there are many tooling/RP services under one roof.

I was wondering whether you had any advice on the subject.

Best, James (…)

-via LinkedIN

 
 

  Dear James, 

Thank you for your question - I appreciate that you sought my opinion on the matter.

First of all, good job for opting for 3D printing for small batch production. It is much better option than investing in tooling for Injection Moulding, and much healthier for your company’s budget - there is nothing worse for any company than freezing the funds in stock that may or may not sell.

Unfortunately, I do see many ethical issues behind sending any parts for 3D printing to China, or any other country for that matter, which is this far away from where your business is located. Why would you send your data abroad and then have the final product transported across the world when you can have the parts done equally fast and at similar price, but locally? 

GO LOCAL

First of all, China doesn’t necessarily equal ‘the cheapest’ in the current economical climate. Back around the time of 2008 Recession, it was a sad necessity for many businesses whose products required high skilled labour to move production to the Far East in order to cut costs and remain in business. Labor costs were incomparably cheaper in the East, as was the cost of machinery.

However, as of 2012, we started seeing a shift here in the UK. Skilled labour costs in the Far East started to rise, and costs of goods machined locally became again comparable. What also changed was the public understanding of degree of positive results Fair Trade had on the economy on local levels. People started to become aware of the origins of the goods and pay closer attention to factors other than price. Rising cost of fossil fuel costs, extended shipping times, carbon footprint and even cases of cruel piracy along the African coast were all factors that started to justify moving the production back to the UK.

Additive Manufacturing's labour costs and cost of base materials means that cost of the 3D printed parts are comparable worldwide. It also makes the price very stable and predictable throughout the industry, unless:

A/ much lower quality, uncertified materials are being used;

B/ the technicians aren't paid a fair wage;

C/ the facility skimps on some essential costs like quality personal protective equipment (PPE);

or

D/ the company uses price dumping strategy to gain economical advantage, trying to undermine the existing providers within their field. (Think about what the multi-million-pound companies the likes of UBER are doing for the first months of operating in the new area, to stir the existing taxi prices).

All of these practices are unethical and damaging for any industry.

With such few variables, it is easy to compare costs of the services worldwide, as well as evaluate the environmental benefits like carbon footprint of getting your parts shipped across the world.

DATA SECURITY AND INTELLECTUAL PROPERTY (IP)

Secondly, consider the risk of data theft. If you send anything to China for manufacturing, be it a PCB board design or CAD for tooling for IM, you can be almost 100% certain to have your data copied, resold, or simply manufactured and distributed locally without your knowledge and permission. I am not an expert on International Law but from what I understood from the interactions with the customers I consult for is that laws guiding IP in China may vary depending on facility location and point of distribution.

That's how the power of your design and originality could be replicated to create cheap knock-offs later available through the platforms like eBay or Amazon.

While it is almost impossible to protect any CAD design (you can always try watermarking or modifying the original topology manually but this can be easily overwritten), there might be some legal ways you can protect your IP when sending parts for 3D printing in your own country by means of non-disclosure agreements (NDA), patents and additional layers of security that can be advised by a lawyer specialising in Intellectual Property. To my knowledge, no similar agreements are recognised and honoured in China, and in case of any dispute you, the foreigner, will ALWAYS be at a disadvantage when trying to prove your case and win compensation from a Chinese company.

Please bear that in mind before you even decide to send CAD data for a quote.

3D Printed Dragon, proudly printed and hand-finished in the UK ©HD Grzywnowicz, 2018 (You can read the full story HERE)

CulturE Shock

I wish I saw this point discussed more often in the open, but from my experience, especially in the UK, people are reluctant to talk about it for the fear of being assigned the “racist” label.

The topic of cultural differences controversial and polarising, but it is not to be underestimated when dealing with any manufacturer outside of your own business culture. Of all countries, China in particular deserves a spotlight for one particular reason: cheating mentality.

China is a beautiful country with rich traditions and wonderful, albeit turbulent, history. It is a cradle of culture and invention, writing and many philosophical and religious influences. There is also a less beautiful face of the country, frequently overlooked in business discussions: 骗子(Pinyin: Piànzi), lit: scammers/ cheaters/ fraudsters.

The Chinese ‘cheating mentality’ may be a difficult concept to understand for somebody coming from Judeo-Christian tradition where business was built on values fairness, transparency and justice for the fear of sin and its afterlife repercussions (Hell). Although dishonest people devising ways to make quick and easy money can be seen all around the planet, scamming reaches an entirely new dimension in China. It’s impact is epitomised by the 4 character compound idiom 能骗就骗 (Pinyin: Néng piàn jiù piàn), which literary translates as: 'if you can cheat, then cheat’.

Cheating and possibility of being cheated seems to be an innate part of regular interactions with others, almost an opportunistic game people play. As long as you can do it without ‘losing face‘, or: being exposed / humiliated in front of people that matter to you, it is perceived as almost commendable skill proving one’s wit and resourcefulness. People who can’t comprehend that fact are quickly cured out of their gullibility - the one who is not cheating will be cheated on. There also seems to be an element of national pride when the ‘cheetee’ happens to be a foreigner - if you ever read any guidebooks for tourists, you will find out that foreign tourist visiting popular Chinese locations are one of the most likely to fall pray to the scammers who play on trust and take advantage of friendly attitudes. Chinese authorities claim they are aware of the problem and try to protect the visitors but if you look online you will find very many who fell for a variant of ‘tea ceremony‘, taxi from the airport or the jade scam.

Pienzi are prevalent throughout Chinese society, but chances are that unless you fall victim of a scam, you won’t consider this to be a major problem. The country is ridden with scammers coming up with creative ways of alleviating others from the burden of their money.

How does is translate into business? Mostly into seeking quick, easy profit and cutting corners rather than building long lasting, sustainable relationships. Let me explain further.

The cautionary tale of Solidoodle

Cheating mentality can ruin any business in the long run. Good business is a two way relationship build on mutual trust rather than exceptionally ‘good deals’. Seeking quick profit means cutting corners where quality really matters. The language barrier can effectively prevent mutual understanding, different time zones can make the communication window very narrow, and sometimes even the lack of experience negotiating with overseas traders may backfire and can cost your business dear.

It is worth recalling the cautionary tale of one of the FDM hardware manufacturers, Solidoodle. Until this day it remains one of the most poignant examples of a 3D printing hardware company who decided to move its production to China, losing everything in the process.

Brooklyn-based Solidoodle founded and lead by Sam Cervantes, had been manufacturing low-cost, open-source 3D printers between 2011 and 2016. One of the unique selling points of the simple, minimalistic, industrial-looking hardware was its assembly point: Brooklyn, New York (coincidentally, the same place as Makerbot Industries). In late 2014, allured by the potential money savings, the company decided move the production of their latest model, the Solidoodle Press, to an overseas supplier.

The decision had understandably agitated the loyal consumer base who were trusting the brand to support US economy. Despite initial positive experience manufacturing custom components in China, Solidoodle struggled to achieve the same quality of the product compared to the previous generations assembled in the US. In the official statement released after the company became insolvent, Cervantes listed the numerous problems that ensued after moving production: lack of mutual understanding, quality control issues, and several major bottlenecks in production and shipment that resulted in machines failing to reach customers in critical periods, causing a waves of refunds. Racing for time and struggling to keep solvent, Solidoodle tried to keep afloat by making multiple redundancies. Reduced workforce further strained the company’s image, for they became understaffed to deal with numbers of customer complaints and did not have enough time to test the machines after late deliveries, resulting in rushed shipments of batches of inconsistent product. The company was forced to cease all operations in March 2016.

I don’t say this all would happen to your business. I am not saying that every Chinese supplier might be a scammer. All I’m trying to point out is that it is important to look at much wider picture than simple cost per part, as there is much more at stake here that it might originally seem.

Looking for a local 3D Service

So what would best thing to when you are ready to find a 3D printing manufacturing partner?

Firstly, I would recommend doing some research and pick the best 3D Printing Service for yourself, LOCALLY - you would be surprised how many there are around for you to pick from, and how affordable they can be. Most are going to have a quote for you within hours, others will take a couple of days to respond. If you don’t know where to begin, 3D Hubs might be a good place to start. 

If you already know more about materials and machines you’d prefer using for manufacturing your part, you can always reach out directly to machine manufacturers and seek their advice. Big corporations like Stratasys and 3D Systems not only offer their own print on demand services (respectively: StrataSys Direct and Quickparts), but they can also point you out to your nearest reseller who might be in a position to print the parts for you. If you reach out to smaller hardware manufacturers, they probably either manufacture on-site or will still be able to point you in the right direction to their trusted customer/manufacturing partner who would be happy to undertake similar projects. 

My last suggested solution would be to avoid going for mammoth service bureaus the likes of Shapeways, Sculpteo or i.materialise, unless their manufacturing facilities are local to you, for the same reason mentioned in the very beginning - they are centralised instead of local. I personally find large online bureaus impersonal and over-automated, devoid of human touch, which could be frustrating if you can’t upload the parts or receive any useful feedback. Having said that, I hear that this has been improving over the years.

Instead, try to google out nearest ‘3D printing bureau’, ‘3D printing service + your location’ or ‘3D print-on-demand service’. If that doesn’t render the desired results, drop me a line again and I can see what I can do for you.

Trust the industry professional - when in doubt, always opt to manufacture locally. It will yield best results for your business in long term, have a positive impact on the environment and it will help your local economy.

And frankly, you will feel much more in control of the design and your parts.

Tell me how it goes.

All the best,

 
 

The 3D Printing Lady

 

post scriptum. Thank you for sharing the link to such excellent piece of YouTube content - I am genuinely impressed by the quality and value some content online creators bring to the world.

 

     ©3dprintinglady.com


 

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