[rescue] Slightly OT: Bad Cap Saga

[Curious George]

--- On Mon, 8/18/08, Geoffrey S. Mendelson <gsm at mendelson.com> wrote:

> On Mon, Aug 18, 2008 at 10:33:20AM -0700, Curious George
> wrote:
> > Well, we know the *final* manufacturer who sells to John Q Public
> > does!  Are you saying that the rest of the chain is all "caveat
> > emptor"?  So, the poor fool who walks into a Wal-Mart and "takes
> > a chance" on some cheap piece of kit is actually getting a
> > *better* "deal" than the rest of the folks in the chain?  :-<
> 
> Yes. But they are paying a higher price because of it. The
> companies who buy a component, whether it's a capacitor, or a
> board, or a complete unit, don't get warranties anymore, they
> just figure a certain failure rate and pay accordingly. 

And that rate is determined historically?  Or, just "wishful
thinking"?  I.e., if you don't have any recourse with your
supplier, how can you come up with a practical business
plan?  "Well, *hopefully* we won't have too many defects
and then we'll make X% profit..."

> > You don't have to "take it back for repair".  E.g., most
> > of the items that I've designed are *examined* when they
> > fail "under warranty" (i.e., to figure out *why* so we can
> > determine if there are component or design issues to be
> > remedied to reduce those costs in the future)
> 
> First of all, who examines them? Is Wal-Mart going to box
> up each broken DVD player and send it to the "Long March DVD
> company" in China?  Is anyone at the Long March DVD company
> going to care? The batch that went to Wal-Mart and is on sale
> today, was finished, boxed up and shipped six months ago. 
> They've gone on to three or four new batches, with different
> designs, different components, etc.

Remember, this isn't just about WalMart!

I.e, does Dell not care what's going on inside their "warranty
failure" machines?  (I've never dealt with a Dell machine
that had to be returned under warranty so I don't know if
they expect you to return the unit or just ship you a new
one, etc.)  How do they refine their statistics to decide
which of their vendors are giving them problems (i.e. warranty
costs) if they don't examine the product to determine *where*
the failure was?  (I assume Dell contracts a given machine out
to several different suppliers)  Don't they care about their
*process*??  Or, are you saying the nature of the business is
such that they *can't* care (i.e., that it is largely out of
their hands -- they are just MARKETERS)

> > How (seriously) do you come up with an "anticipated failure
> > rate" when you are using components outside their specs?
> > Rely on past similar "abuses"?  :-/  It would seem too costly
> > to *test* a marginal design too try to come up with a reasonable
> > confidence interval for this figure -- especially with the short
> > product development cycles nowadays...
> 
> It's a gamble. But engineers who are used to building things at 
> the edge of their specs, are used to it.

So, you're saying they rely on their *art*, instead.  :-/

> As much as you are used to knowing how
> much to overspec something so that you don't have to
> "beam down" a satellite for a quick repair. :-)

<frown>  I *guess* it's a different side of the same coin...
but, it really doesn't *feel* that way (any more than a guy
wearing *two* condoms feels he's "playing the odds" vs.
a guy wearing *none* is!  :-/ )

[apologies to list if that is off-color]

> > OK, I can buy that for "cheap" consumer kit.  (e.g., $100).
> > But, are you saying LCD monitors are just "produced" with
> > no testing or other means of quantifying your quality?
> 
> Yes, especially the $200 ones.

<frown>  So, where is the magic number?  $300?  $500?
When does it make sense to vendor to check his hole card
before placing his bet?

> > Ditto for PC's?  (I'll have to start looking at some of the
> > "failed" medical instruments and see if they are suffering
> > the same sorts of "bad cap" failures!)
> 
> Yes, especially the $200 ones.

That I would probably concede.  A $200 PC is really pretty
cheap (i.e. crappy).

> > The common thread in your examples seems to be "cheap" (as in
> > "inexpensive" and "not generally thought of as high quality")
> 
> Yes, that was my point from the begining.

But, these same vendors are making all sorts of kit.  Does
Dell use *radically* different suppliers for its high end machines?
(I'll concede they bottom feed on their low end machines but
is there much of a difference between the middle and upper ends?)

> > But $20 DVD players are different than $200 LCD monitors
> > or $500-1K computers!  People almost *expect* the failure
> > ("Well, it was only a $20 player, anyway... let's go buy
> > *another*...").  I'm not sure that extends to *everything*
> > made "for the (John Q Public) consumer".
> 
> No, but it's close in $200 LCD monitors and TV sets, and
> $200-$300 computers.

So, how does a vendor like Dell decide where to care?  Is it
driven by cost?  Sell price?  Quantity?  Or, just "margin"?
I.e., when does Detroit get concerned about the ECU's in their
automobiles?

> > So, in effect, these folks (the people who ultimately sell the
> > items to you) have placed their company's fate almost entirely
> > in thehands of these suppliers -- and are *comfortable* with
> > that relationship?  :-(
> 
> Yes, they know what to expect. They live on small margins already, and
> if they can get a lower price, it matters. If they sell devices with
> a 90 day warranty and all of them fail on the 89th day, they are really
> pissed off, but if they fail on the 91st, they smile and sell you
> another one. 

So, they operate like a Bank Robber, Confidence Man, etc. -- i.e.,
reaping whatever gains they can *while* they can yet, all the
time *expecting* to get bit sooner or later?

> > Every time I've had to meet with a Japanese supplier there have
> > been *lots* of reassurances ($$) exchanged prior to beginning
> > any sort of serious relationship (since this was potentially
> > a significant "dependancy" being established... if the Japanese
> > company just saw us as "one of many customers", we weren't
> > very reassured since an entire product line could end up
> > depending on how faithfully that Japanese company held up
> > its end of the arrangement!)
> 
> But that's a different class of device. Just the fact you are
> talking with the Japanese puts you in a class above the Koreans
> and Tiwanese, and two classes above the PRC. (and three classes
> above India, but they don't export much yet.)

That assumes their is something inherent in each of these classes
of suppliers that is immutable.  I am not sure the Cynic in me
believes that.  E.g., there was a time when American quality meant
something.  Now, americans are just as happy to produce crap as
anyone else.  What's to say the Japanese won't follow the same
pattern?
 
> > But, these same problems are manifesting *in* PC's.  So, why
> > is it OK (to the cheap DVD seller) to one seller and *still*
> > OK (to the PC vendor)?
> 
> Same thing, different device. People learn to expect the
> same reliability
> from all devices from cheap PC's to cheap DVD
> player's to cheap MP3 players, telephones, etc.
> 
> Look at Kitchen Aid mixers. Hobart sold the brand name in 1993 or 1994
> and they are made "in the USA" with Chinese made junk inside. Yet people
> insist on spending $1,000 for one that sells in the U.S. for $300, while
> an equivalent Kenwood, made in the EU, has 3 times the power, 
> works much better and lasts as long as the old Hobart ones.

Hobart obviously has a "good brand (name)".  An asset to a firm
but one that can quickly be lost and *slowly* recovered.  So,
the trick (?) is to ride the name *down* the curve for as long
as you can...  then hope it is someone else's problem.  (cf the
US car industry)

> BTW, Hobart still makes the same mixer as the KA, it's
> now about $2,000.
> 
> > Again, these are inexpensive devices.  What happens if the same
> > quality issue presents with large LCD TV's?  Or, PC's?
> > I wonder how that sort of problem would be met here in the
> > US if it afflicted these new "HDTV converter boxes"?
> > (imagine 1 out of 5 ATV user losing their TV reception because
> > of a flaw in that design... (I'm told several boxes have
> > noticeable firmware bugs))
> 
> They won't care. They will just go to Wallyworld and buy a cheap HDTV 
> and say it was the problem with the old TV anyway, and it was old, and
> I'm not going to spend another $40 to keep that POS going.......

Yes.  A less than ideal example -- except for the *magnitude* of
the sales volume in a small time window.

> > I seem to recall Gateway having a big problem with Plasma
> > screen TV's -- clearly a "consumer item".  Yet, *they* were
> > sued for failures that were "out of warranty".  And, I
> > believe it was probably a big issue in their demise.
> > I think this reinforces my "what is 'cheap'" notion as
> > a threshold for pain for most consumers.
> 
> It depends, Plasma TV's IMHO stink anyway. But they just got stuck on
> the wrong end of a product liability suit.

IMO, here is no "right side" of such a suit -- both sides get
screwed (though the lawyers always get paid!)

> IMHO the suits all should
> have been dismissed, but you can get away with a lot in the U.S.

And, you have to reflect that in how you approach your business.
If you don't care if you are DBA <name> two years from now, you
can probably make a killing screwing over customers.  That may,
in fact, be what's hqappening currently as there are lots of
new brands in the marketplace now -- many of which I suspect
will not be around for very long (either by design or by lack
of concern)

> > Perhaps if iPods cost a few kilobucks, Apple's response
> > would have been less palatable (for all parties).
> 
> Of course. They replaced the batteries on dying powerbooks.
> 
> > No.  I just don't like threats of lawsuits when a device fails
> > and a customer's production line goes down for several *hours*
> > (note:  not *days* or weeks!) and he's looking at how he's
> > going to recover those losses -- and *you* (me) are the only
> > likely candidate!  :<
> 
> That's a different issue. You are selling to a different market.

Yes.  But I don't want my inattention to what's happening in
The Industry to leave me any more exposed than I need to be...