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| DynaSys InternationalDesigning and Selling Machines for Export to China
In its rush to modernize, China is purchasing high tech industrial systems at an incredible rate . Chances are that you soon will be selling something to a Chinese company. You will be successful only if you understand the problems involved in the China trade. If you don't your company could loose a lot of money or perish. While working in China during the past fourteen years, we have seen many cases of successful projects, but many more cases of failure. We offer these suggestions to help you succeed.
Rule number one - Always charge enough to cover the technology costs.What are the technology costs? Look at it like this; US company that is buying a plastic sheet line probably has plenty of experience in the production of plastics. They are buying equipment to expand production, not to get into a new business. Your job is to make the machines, make them run and get paid. A Chinese company would buy the same production line and place it in a new factory that has little or no experience in plastics. Your job is to make the equipment run and teach the factory how to make a product with your line. You are providing the technology training. You do not get paid until you can teach them how to make an acceptable product by themselves. In some cases you will be expected to provide a lifetime of experience in what you hope will be a few weeks. As the engineering manager in a Chinese telephone wire company put it, "Look at this wire. Who would believe we were all farmers two years ago!" Rule number one-A - Always charge enough to cover the unexpected costs.In addition to the technology expenses, you will probably be expected to startup the components supplied by others, such as, the raw material mixing and drying equipment, the gauging equipment and the auxiliary systems such as chillers and material transfer equipment. Don't count on your suppliers to help startup their own equipment unless you have an agreement with them before the commissioning. When you call, they will say, "It worked here. We don't know what you did with it or how you are using it. It's your problem." If you did not provide enough money for a reasonable startup and training period you will probably, lose money, abandon the project to cut your losses, never sell another thing overseas, or all of the above. If you have any doubts about your ability to complete the project successfully, don't take it. When selling to China it is better to refuse a project than to fail.
Rule two - Write a good contract.Know what you are providing. The customer will check every item in the contract against the equipment supplied and the specified performance of the equipment. They are looking for a mistake that can be exploited. If the motor on a machine is described as a 40 Hp AC motor in the contract, don't supply a 50 Hp motor and expect the customer will be thrilled with the free 10 Hp. He will be thrilled, because he knows you violated the contract and are at his mercy for acceptance of the production line. Independently check the Chinese translation of the contract to ensure it matches the English. On a recent project, the Chinese translation in a contract mentioned a touch screen. There was a screen, but it was not "touch" capable. The customer wanted his touch screen and would not sign off on the machine. The cost of the word "Touch" = 1 touch screen + programming changes + shipping + field installation +testing + travel expenses + the cost old screen, because it is too hard to get out of China. Customers in China often pick a product that is close to the edge of the production line's performance envelope as a test product for acceptance. Of course, you won't be able to make an acceptable product in the size he has chosen, so t hey will continue to test the line by making products that they will sell, until you solve the problem of why your line can't make that particular product. Oh, by the way, you must service the line for free until the line is accepted and the warranty begins. To avoid these problems, place a line in the contract that says in essence, the line is automatically accepted by the customer if the customer makes and sells a product with the production line. Carefully define the test requirements and parameters required for completion of testing. Be sure you can meet them and define the organization that will arbitrate or provide independent testing of the product in the case of a dispute . Don't forget that the English part of the contract must supersede the Chinese translation in a dispute.
Rule three - KISS, Keep it Simple Stupid.Chinese factories always try to buy the highest technology available without regard for the problems involved with running an overly sophisticated system in a third world environment. Your salesmen make more money if they sell a system with all the bells and whistles, but keep them under control. If all you need is a simple shoe box PLC and a few push-buttons to run your system, why are you providing touch screens, SCADA, servo controllers and complex serial interconnections with protocol adapting computers? If the competition is supplying a system that is more sophisticated than you would care to provide, let them. It's the best way to get rid of the competition. The sad fact is that the more complex a system the higher the probability of a failure. Rule four - Provide some spares.It takes about three weeks to get a replacement card for your ailing computer into China by the fastest means available, if you get it at all. Shipments of critical replacement parts are often returned to the US after weeks of waiting, because the shipping documents were not filled out correctly or because the customs official did not get the expected gratuity. One method you can use to ensure that this doesn't happen to you is to provide a good set of spares as part of the price of the line. The start-up crew can use these spares during commissioning and replace them later when time is not an issue. Another method is to use international standard controls. You can get replacement IEC components in many smaller towns in China, but you won't find a NEMA component anywhere.
Rule five - Design for an easy installation.How can you design for an easy installation? You probably design your systems so that you end up with a long terminal strip in the cabinet with all the terminals marked to match the wire numbers. The installation crew must read all your drawings and try to determine which wires need to be pulled between terminal points. A better method is to wire to a terminal block that is a matching image of the terminal block in the remote panel. All the installation crew must do is wire terminal 1,2,3 in the main panel to terminal 1,2,3 in the remote panel. There is no room left for interpretation by the local electricians who were farmers two years ago. An even better method is to use 24 volt logic and provide low voltage cables for the hookup. This makes the project easy to test using color-coded test cables in your shop. All the installation crew has to do is hook up by the wire color code. Remember that wrong tag numbers get placed on opposite ends of the same wire all the time, but a red wire is always red at both ends. Most panel interconnect wiring in China is placed in trenches below the floor. While this produces that beautiful uncluttered look, your cables will be subjected to floods when the pipes break, signal and power leads together, and attack by hungry rats. Conduit is always better, but there is very little conduit in China and most Chinese factories are either too cheap to use it or the farmers turned electricians have never seen it. If you are in a joint venture and will own a part of the factory you should consider supplying the necessary conduit and fittings with the system. Don't forget that they use metric pipe, maybe you should too. Another very important thing is , don't use fuses unless absolutely necessary. You will never find a Class CC rejecting fuse anywhere else in the world. Use small din rail mount circuit breakers or manual motor starters instead of fuses. They are available everywhere in the world. If you must use semiconductor fuses, provide plenty of them as spares. Also, while you're testing be sure the circuit breakers and overloads you selected are the correct size and not nuisance tripping. Rule six - TEST! TEST! TEST!Many companies ship a partially tested systems in order to make the profits necessary to ensure a good year (on paper) for the company and a fat bonus for the executives and salesmen. The resulting high cost startup during the next year will lower profits, result in little or no bonus money, and many long Friday afternoon soul searching sessions. Never, Never, Never ship an untested machine or expect to solve the few remaining simple problems in the field You will fail!!! Assign someone to create a test and inspection sheet for every component including those components not supplied by you. Visit your supplier's factories to watch the testing and bring the inspection sheet that you developed for their machine. If your not doing this now as part of your quality control efforts, it's time to learn how. The lower line frequency, 50 Hz, causes many problems. A transformer, power supply or contactor that is rated 60 Hz and not 50/60 Hz will burnout after three weeks of operation. If you use a transformer to raise the line voltage back to 460 VAC on a drive system that is now being operated on 50 Hz power, all of your AC motor overloads will trip and some of your blower motors will burn out!
Last rule: Determine who is going to do the installation and how much will it cost in both money and human terms.Do your engineers have the time to spend checking wires, rotating motors, flushing systems or are they busy designing systems and making money for your company. Do they like strange food? Will the sight of men dancing with men bother them? If they ask for a hotel room with a view and get the room with a vole will they be on the next plane out? These things can't happen? We've see all of these things happen and more than once. One startup engineer went home after one week in China, because the delicacy he was offered for lunch, silkworms, bothered him. He also thought he was in a homosexual hotel because men danced with men in the disco and they kept asking him to dance. He had no idea that this was just a charming old Chinese custom. How do you handle the startup? Hire a group of engineers that are use to conditions in China to perform at least the early part of the startup. Save your big guns, the guys with process knowledge, for the end of the startup. Don't burn them out during the first skirmishes. Allow money for this during the planning and sales stage and you won't be struggling to commission your machine after all your engineers have gone home to look for another job. While you are at it, try to figure out how to cover the warranty period without loosing your shirt. Warranty problems can quickly break the bank, because Chinese factories often call for assistance for the smallest problem. When your engineer travels half way around the globe, spends three days getting into the country and three days getting out, how much do you think the faulty fuse he found really cost your company? We estimate $3,000 to $5,000. (Remember, I said no fuses!) The company commissioning the project should have assistants in the Far East that can be trained on your machine during the installation. They can travel to the job site at a lower cost during a breakdown and quickly solve the problem, saving you money and improving your image in China. This is where DynaSys International can help you!
China is a huge market and you can capture a big portion of that huge market if you do your homework. Before signing that first big contract, get some advice from your contacts in other companies that are working in China or from the export assistance division of the SBA office near you. If they can't help you, call DynaSys International, we know China and 29 other countries!
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