Following a series of tighter consumer protection laws, makers are emphasizing product safety while contending with the high cost of compliance.
Faced with stricter safety regulations BGV A3 in key export destinations, companies in China are allocating more resources to product testing and emphasizing high-quality materials despite the pressure these are putting on manufacturing outlay.
For most suppliers, adopting complicated and far-reaching directives is not the main challenge, but the high expense of compliance is.
Many of the new safety standards require makers to conduct more tests on a greater number of chemical substances. As a result, certification fees for some products have risen by as much as 50 percent, and even doubled in a few cases. CPSIA evaluation for toys, for example, can cost up to $1,000 per model depending on the complexity of the design.
The average toy company now spends $60,000 to $100,000 on examination fees every year. One of the biggest toy makers in China pays more than $2.9 million annually on testing, much higher than the yearly revenue of small suppliers.
Lamp specialist Heshan Mingkeda Industries Co. Ltd spends about $3,000 for SAA certification alone, which takes one or two months to acquire, according to the company’s sales manager Mini Yip.
In many instances, fulfilling safety requirements involves replacing infringing materials with compliant substitutes.
Suppliers of food-grade products, for instance, have already stopped using BPA, an organic compound found in many plastics. In a range of consumer goods, further modifications include the shift from PVC to POE, and from PC to phthalate-free PES, glass and nontoxic silicone.
Battery makers are striving to develop or source safer anode and cathode materials. Some have begun to replace conventional lithium cobalt oxide formulation with lithium iron phosphate, an alternative with lower environmental impact. Other efforts are aimed at improving protection against overcharging, discharging and heating.
But in most instances, “safe” alternatives are costlier than the originals. 3P PVC for instance, is 30 percent more expensive than regular PVC but is 30 percent cheaper than 6P.
Similarly, A5-grade melamine goes for $2,200 per ton, three times as much as the same volume of the A1-grade variant at about $735.
In some cases, imported materials, which invariably cost more, are favored over domestic equivalents. Imported PP, for instance, is 20 to 30 percent higher than domestic versions, at $1,800 to $2,100 per ton. Overseas-sourced organic fabrics, likewise, are 20 to 30 percent more expensive than local variants.
Despite the high outlay, some companies prefer to source abroad for consistent quality. Foshan Geuwa Electric Appliance Co. Ltd sources 80 percent of materials and components for its blenders and juicers overseas, while the rest are purchased locally.
Besides higher raw material expenses, makers have to contend with increases in indirect costs, particularly those related with monitoring the supply chain to ensure that all manufacturing inputs meet specifications.
According to Tim Corrigan, president and CEO of the Quality Assurance Institute, “The root cause of the problem (of product quality) is control of the raw material, application contaminations and subfactories. To fix this requires an overhaul at many factories. The solution calls for significant transparency, diligence and dedication.”
Generally, material vendors are able to offer third-party certification. But for those that cannot do so, companies need to send their own QC staff to supervise the production at the material suppliers’ factories.
More exporters are now limiting their sourcing to suppliers that can provide certified inputs. Still, collection and documentation of every component utilized requires time, effort and money.
In addition to testing and materials quality, manufacturers are also enhancing their in-house QC facilities.
Lai On Products (Industrial) Ltd, a Hong Kong-owned maker of crayons, modeling clay and paint has set up a microbiological laboratory at its factory in Shenzhen, Guangdong province. Certified by the China National Accreditation Service for Conformity Assessment, the lab is comparable to a chemical-testing facility. The supplier also sends its products to third-party agencies to ensure compliance with ASTM D-4236 and F963, Toxicological Risk Assessment, EN 71, CPSIA, California Proposition 65 and REACH requirements.
Some baby stroller factories are now equipped with wheel performance, dynamic durability and drop-testing facilities. At the same time, many stuffed toys and children’s garments makers are purchasing more needle detectors.
Any measure to comply with safety regulations undoubtedly adds to the cost of production. Suppliers estimate material and certification expenses have risen