I don't want to overblow it. But shopping for the most basic item of home health can hold lessons about broader management practices. I've been unable to buy a reliable digital thermometer in the US. I finally obtained it from India. Here's how it happened.
Last month Anita and I came down with the flu. Our old glass and mercury thermometer took too long for an accurate read of temperatures. A couple of good digital thermometers we had bought more recently (one in the US in 2000 and another in India in 2004) had been passed on to our children.
So I went to a CVS pharmacy to buy another digital thermometer. There were several types on display - store brands as well as the better known Vicks brand. They varied essentially in the time they took to record temperatures, ranging from 5 seconds to a minute. They all claimed on their packaging to be accurate within 0.2 degrees F in accordance with federal standards.
The problem is, they weren't. The CVS brand I first bought for $6 was off by over 2.5 degrees when compared with our reliable mercury thermometer. Moreover, readings varied widely on successive tries. Then I exchanged it for the Vicks brand for $14. Same story. I then visited Rite Aid pharmacy and bought another which was also hopelessly inaccurate. Finally I talked to the pharmacists at both Rite Aid and CVS about this. The Rite Aid pharmacist said he had received many complaints about all the types and brands of thermometers that they carried, and couldn't recommend any one of them. All were made in China. It was the same thing (and the same Vicks brand) at Walgreens. The reliable "Made in USA" digital thermometers I had bought seven years ago were as extinct as the mammoth.
The CVS pharmacist said the only ones likely to work were the old glass types filled with liquid (a mercury substitute, since mercury thermometers are now banned here for safety reasons.) I finally bought a glass and liquid type which thankfully works fine though it requires 3 minutes to record temperatures. The brand name is Geratherm and it was the only one not made in China, but in Germany instead.
As we still preferred a faster-reading digital thermometer, Anita called her brother Prakash who happened to be visiting India at that time. He easily picked up a good digital thermometer made in Taiwan from a local Indian drugstore and brought it back to USA for us.
At present, corruption and the "anything goes" culture in China makes it easier to get away with poor quality manufacturing and adulteration of goods. Does this mean goods coming out of China are necessarily inferior? Not at all. There are articles about Japanese companies that flew their quality experts and manufacturing teams into China and thus ensured top quality. The best laptop in the world at present is the Chinese made Lenovo ThinkPad X300, according to BusinessWeek (March 10, '08).
The problem lies in the attitude and priorities of the US managers who procure from China. Instead of stressing high quality at an acceptable price they seek the lowest price for acceptable quality. And "acceptable quality" often means whatever does not get the procurer into trouble in the time he holds that position before moving on. In our digital thermometer case the outsourcing manager(s) at Vicks and the buyers for the drug store chains probably got kudos and promotions for having cut costs and boosting profits in the short term. By the time it became known that these thermometers were junk these people were probably in other positions and never held accountable.
This story repeats with countless products sold in the US by a whole range of companies. The practice flows from top managements that do not track the consequences of their executives' past decisions and reward short term performance. US CEOs are themselves driven by quarterly targets and myopic goals. This can apply to small, private companies that deliver services as well.
One such example of short term opportunism trumping long term interests is in medical tourism, an area of healthcare services of special interest to me. There are several small companies offering their advice and services to outgoing US patients. They can be strongly tempted to steer patients to hospitals and clinics based on the fees they realize, while compromising the quality of treatment. The danger extends beyond the obvious ones to their patients' wellbeing and to their reputations or legal exposure. Just a couple of well publicised mishaps can shake the confidence of medical tourists and severely damage the nascent medical tourism industry as a whole. That's a whole lot worse than a pile of junk thermometers being returned to drugstores.