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SOURCING WORLD-CLASS MOTOR COMPONENTS IN CHINA

by Michael Bloom
Chairman, Sinotech, Inc.

Presented at: Electrical Insulation Conference and Electrical Coil Winding Technology Conference
September 2002

Abstract: In order to build world-class motors at competitive prices motor manufacturers need to outsource motor components. These components include commutators, brushes, shafts, lamination stacks, magnets and wound coils. Due to its low labor rate, level of technology, and abundance of raw materials, China is generally accepted as a primary source for imported motor components. This paper will update material presented earlier and focus on the general issues of sourcing in China as well as the specifics of sourcing world-class motor components.

Key words: Chinese motor components, sourcing motor components

Introduction

Advanced motor design has helped to keep U.S. OEMs competitive in the world motor market. However, to maintain a competitive edge critical motor components must be imported from low cost sources. China offers a bewildering range of opportunities as well as risks. Many of the issues of sourcing in China are relevant to the manufacture of any precision engineered component and some issues are especially relevant to sourcing motor components.

General Issues

1. Why China?

   Obviously there are many countries that are candidates for overseas sourcing. China, however, combines advantages that are unique to the world's most populous nation. These include:

   • One of the world's lowest labor rates ($100 (production) to $800 (engineering) per month)
   • Abundant indigenous raw materials
   • A well developed industrial base
   • Aerospace and defense industries that are technology drivers for the industrial sector
   • A mature communications and transportation infrastructure
   • A stable economy
2. Taking the direct approach

   Some US companies have achieved remarkable success by working directly with Chinese factories. Unfortunately, this has been the exception rather than the rule. There are a number of reasons for this. First, trying to locate the right factory is exceedingly difficult. There are too many and they are scattered too widely geographically. To achieve the best price, it is important to select several factories so they can compete with one another. This means you really need to select several good candidates.

   Assuming you have managed to select the best factory and negotiate an acceptable price, how will you supervise the quality of the production? Experience demonstrates that it is crucial to either have your own representative on site, or at least set up a monitoring program. It is not that the factory is dishonest, but its standards are likely to be different from yours. We'll say more about quality later. If you do have a quality problem, and defective goods ultimately arrive at your shipping docks, you will find it expensive, if not impossible, to get a refund or correction. Unless you are willing to set up your own purchasing and quality control organization in China the direct approach is not advised.

3. Using third parties to aid in sourcing

   Third parties can be very helpful in advancing sourcing projects while providing protection and value added services. The ideal third party would have the following attributes:

   • Offices in the US and China
   • Native Chinese engineers and negotiators in China
   • A U.S. based engineering staff to support the technical communications with you
   • A program in place to assure quality
   • Laboratory affiliations in the US for first article tests
   • US and Chinese based logistic support for shipping, customs clearance, and warehousing
   • Legal recourse and product liability insurance in the US
4. Quality Assurance

   If quality control is not properly addressed, the sourcing project is almost guaranteed to fail. At the early stages of negotiations you should make it clear to the factory what the quality issues are. Besides the usual issues of dimensional tolerances, you should discuss surface finishes, weight tolerances, standards (such as UL/CSA approval), metallurgical considerations etc. These should be clearly stated in writing. Increasing numbers of Chinese factories are achieving QS9000 certification. However even factories that are not QS qualified are often willing to learn and implement QS procedures such Statistical Process Control (SPC), Capability Studies, Gage R&R's, FMEA's etc. if taught. It is suggested that at a minimum SPC documentation be submitted with each shipment and that an AQL level be specified.

   A third party provider can help greatly in assuring the integrity of the quality control process by performing on site quality audits. An in-depth audit can verify that quality control processes are in place and that they are being adhered to. The third party can provide a layer of surveillance over and beyond what the factory can provide. Some providers use test labs in the U.S. to verify that customer specifications have been met. Third party providers can also perform random samplings on production lots prior to shipment to guarantee that defective products are not shipped.

   A word about on-site monitoring. Chinese cultural norms make it very uncomfortable for a Chinese engineer or manager to verbalize negative feelings or admit problems. Production issues and delays occur that are not admitted by the factory. This is another argument for on-site monitoring by a third party.

Issues Specific to Motor Components

1. Commutators

   Commutators are available from China that rival the best domestic commutator sources. Commutators are typically composed of an inner core of phenolic resin and an outer copper shells cut into segments with tangs attached. Steel-core commutators and now being universally replaced by Mica tang-less commutators and are available as well.

   When a commutator factory is audited we suggest beginning with incoming inspection of the copper and resin raw materials. Does the factory have material certifications for the copper? Does the factory have a metallurgy lab to test the hardness and purity? What is the source of the phenolic material? Is it from well known supplier such as Rogers, Sumitomo or Matsushita?

   The copper shells are stamped from rolls of copper using progressive die stamping. Check to see if this process is well controlled. There are two methods of molding the cores into the shells: one method injects resin pellets directly into the shell and the other method first molds the pellets into "cookies" and then the cookies are melted and injected into the shell. The second method produces superior results.

   The best factories do a 100% visual inspection of the commutators and perform 100% breakdown testing using a hipot tester.

   Transitioning from a domestic source of commutators to a foreign source is more difficult than it may seem. In the U.S. the commutator industry has coalesced to just a few manufacturers. Many of the resins used in those manufacturers' commutators are proprietary and are identified solely by a proprietary code. Success in moving to an offshore commutator source depends upon re-specifying the resin.

   The selection of the resin is critical. For example, a resin that works well with smooth shafts may fail with fluted shafts because the elasticity of the resin may not allow for the min-max dimensions of the fluting. The best way to check the elasticity of the resin is to actually run the subject commutators on a production line with samples greater than 300 pcs and see if there is any sign of cracking when the shaft is inserted.

   At this time there are some proprietary long-fiber resins that are difficult to match. However, this can often be overcome by use of a bronze insert sleeve. New medium- and long-fiber resins will soon be available in China.

   The commutator should undergo a high speed spin test to verify the robustness of the part. Still, the commutator is best tested in an actual motor. The commutator factory should be supplied with samples of the motor, several shafts, and some original commutators, as well as the motor's operating characteristics including: operating voltage, torque and current at no load, torque and current at rated load, torque and current at locked rotor and noise level. The commutator factory should be capable of performing the same tests and matching results.

   Many commutators are used in automotive applications where QS9000 standards prevail. Although we have not seen any QS9000 certified commutator factories, some factories are ISO9000 certified and have sophisticated Quality Assurance departments that can provide QS9000-like documentation including full PPAP submissions. We believe that commutator factories who cannot provide acceptable Process Flow Charts, Control Plans, Statistical Process Control, and Production FMEAs should be eliminated from consideration.

   From a commercial perspective for commutators up to about two inches in diameter tooling costs for individual commutators should range from $5,000 to $15,000: a considerable savings over domestic tooling costs. About 120 days should be allowed for tooling and test with production starting 30 days later.

2. Graphite Motor Brushes

   Graphite motor brushes and copper-graphite motor brushes are pressed from a compound of graphite and copper powder and then baked. The surface incident with the commutator shell is then ground to shape. Before the graphite is pressed the copper wire lead is inserted to the proper depth, locking it in place. A spring with the wire lead running through it may be placed between the brush body and a keeper at the end of the lead.

   Making brushes is a relatively simple process. On the occasion of a factory audit it is suggested that the auditor begin with raw material inspection starting with the storeroom(s) for the graphite and copper powders as well as for the lead wire. Check for the organization of the storage as well as material certifications. A chemistry lab should be on-site to verify the material chemistry.

   Manufacturing brushes involves inherently dirty and dusty operations so do not expect clean room-like conditions. Look for well calibrated ovens with calibration certificates traceable to a national standard.

   As is the case with commutators, migrating from a domestic source of brushes to an imported one is not as simple as it might seem. The carbon/copper formulations specified by US sources tend to be proprietary. It will be necessary to re-specify the compound. It is best to submit the actual motor to the brush factory as well as samples of the current brushes and a torque chart. A chemical analysis can be performed on the current brushes and then actual motor performance can be tested to assure the correct compounding. Measurements of bulk resistivity and mechanical hardness and density will also be made to aid in this process.

   Wear analysis is helpful but potentially difficult to perform. Since many factors affect wear, including the chemical composition of the brush, the amorphous structure of the brush, the spring pressure, and the abrasiveness of the commutator, wear is best measured in an actual motor under normal or accelerated life testing.

   The brushes should be subject to a pull test on the wire lead. The exact length of the wire lead should be specified as well as the number and size of strands in the wire and the copper alloy to be used.

   Commercially, brushes are very inexpensive to tool, typically less than $1000. Production costs are dropping as Chinese factories move to more highly automated processes with the adaptation of presses that auto-insert wire leads and form the brush to shape without grinding. Even fairly manual processes can be made more efficient by carefully designing the pressing mold to reduce the amount of grinding required. Remember that brushes may require two different grinds: a curved grind in one plane and a straight grind in the orthogonal plane.

3. Motor Shafts

   Motor shafts represent one of the most challenging motor components to source in China yet one that offers great benefits. The difficulty in producing motor shafts is that the geometry of the shaft may be complex, straightness is key, hardening is often required, shaft alloys may be difficult to find in prototype and small production quantities, and the tight tolerances are very hard to hold.

   As for shaft geometry consider that some shafts have segments of the shaft whose axis is offset with regard to the main axis of the shaft. Some shafts require knurling: a process that uses custom-built knurling dies. Hardening itself is not inherently difficult, but since the grinding must be done before the hardening and the hardening changes the mechanical dimensions slightly, this can be hard to compensate for. If case hardening is required, look for a factory that has facilities for induction hardening through insertion of the shaft into a RF energized field.

   Almost any alloy can be formulated in China but a mill run may be required and this represents a financial risk to the factory. There are two ways to solve this problem: 1) produce the shaft during the initial sampling stage using alloys that are available in China; or, 2) send the alloy rods from the US to the factory for prototypes and an initial production run.

   A caution here. Many Chinese factories can produce several hand ground samples precisely to specification. This proves very little. To provide consistent high quality shafts the factory will need a highly automated process with a good deal of fixturing. There are very few of these factories in China. We recommend that the factory produce 1000 shaft samples and the user select 10 at random and send them to a metrology lab to do a dimensional checks and to a metallurgy lab to check the physical characteristics, including: hardness, tensile strength, yield, etc.

   Chinese shaft factories are close to QS9000 and the same comments made concerning commutator quality systems and QS9000-like documentation apply to motor shafts.

   Commercially, the cost of tooling a shaft in China is very low (less than $2000) since there is really no tooling per se, just fixturing. Production cost reduction of up to 50% below US domestic prices are realizable with lead times of up to 90 days. Knurled shafts take longer since the factory may have to produce the knurling die.

4. Lamination Stacks

   Lamination stacks are readily available from China. They are typically made through a progressive die stamping process where rolled raw material passes from die site to die site until the process is complete. There are two issues to consider regarding lam stacks: 1) most raw material in China is metric dimensioned so it may be difficult to get lam stacks in small volumes with English dimensioned thickness; and 2) many Chinese factories are not highly motivated to sell lam stacks since many of these factories also produce motors that represent higher profit margins. Still, lamination stack can be purchased with considerable savings.

5. Motor Magnets
   1. Ceramic Magnets China is simply the most economical place to make magnets. Even companies such as Hitachi make their magnets in Chinese factories so it makes sense to buy directly. Ceramic magnets, especially arcs, are produced in the largest volumes. Although magnets are produced throughout China, there is an area of Zhejiang Province where such factories abound. But our experience has been that not all magnet factories are created equal. Ceramic magnets are pressed into a mold from a slurry of Strontium Ferrite or Barium Ferrite, the magnetic poles are oriented using a field coil during the pressing process, and the magnets are then baked and ground.

      The composition of the slurries is considered proprietary by the factories and provides a competitive edge for the factory. Many motors are requiring leading edge specifications of Br = 4000 and Hcj = 4000 (MMPA grade 3.8/4.0) [1]. Currently not all factories are able to provide this. Furthermore, correlating magnetic measurements between the factory's laboratory and your own or a third party lab can prove difficult. It is important to exchange precise information about measurement methodology. For example, the magnetic characteristics of arc magnets vary along the surface of the arc. In order to take measurements it is necessary to cut round samples from the arc. All parties should agree from where on the arc the samples should be taken, as well the size and shape of the test coils.

      Another method that is sometimes more practical is for the test engineer to take the actual operating environment of the magnets (i.e. magnets glued inside a motor tube) and take flux reading using a fluxmeter with coil or Hall effect sensor. Then, tubes with magnets installed are sent to the Chinese factory as a benchmark: if the factory's magnets produce the same flux reading the magnets are deemed acceptable.

      Another problem to be addressed is that often the end user has never actually measured the magnets currently in use. Instead, the engineer sends the specifications of the current magnet to the Chinese factory which then attempts to match the specifications. If the original magnet exceeded the specifications then the assumption can be wrongly drawn that the Chinese magnets are deficient. It is for this reason that Chinese factories often ask for samples of the existing magnet when a current magnet is being replaced.

      When specifying any ceramic magnet be sure there is a specification for the maximum allowable chips. With ceramic magnets chips will always occur, but the acceptable chips should be well defined.

      One variable that that is often not addressed in sourcing motor magnets in China is the surface porosity of the magnet. Two magnets can have identical dimensions and identical magnetic properties, yet the difference in surface porosity can cause problems in installation. Typically arc magnets are glued to a magnet tube using an epoxy adhesive. The viscosity of the epoxy needs to be matched to the surface porosity of the magnet since the magnet absorbs some of the epoxy. Simply put, the replacement magnet may not glue well unless its surface porosity is considered.

      Commercially, ceramic arc magnet tooling is typically $5,000 to $10,000 depending upon the size of the magnet, the number of cavities per mold and the number of molds. Tooling time is 30 - 60 days. Production savings should be 20-40%.

   2. Neodymium Magnets

      Until recently neodymium rare earth magnets (NdFeB) imported from China were faced with a licensing problem. Fully licensed neodymium magnets were only available from one or two sources and prices were barely competitive. Sumitomo and General Motors invented the neodymium magnet and held most patents. Sumitomo licensed one neodymium factory group in China who in turn licensed several US distributors. Actually, some US companies have used a number of illegal and questionable schemes to import unlicensed neo magnets, and some shipments have been confiscated by US Customs.

      Now Sumitomo has licensed additional factories in China to sell licensed neodymium in the US. This has drastically increased the supply of fully licensed neo and prices are falling rapidly. Prices may drop low enough to open new applications to neodymium magnets that have been cost prohibitive in the recent past.

      Most of the neodymium magnets coming from China are produced in modern, well run factories. The basic formulations are well understood and do not vary much from factory to factory. However, there is a big difference in the quality of plating. Neodymium magnets need to be passivated. They oxidize and disintegrate in the presence of air. Plating with nickel is often used to passivate the exposed sintered part but if there are pin holes in the plating, especially at the corners, the magnet may fail. Therefore, in sampling neodymium magnets from China be sure to pay close attention to plating uniformity and thickness.

      Commercially, the neodymium market is very volatile at present. For licensed material, savings of 50% or better over last year's prices should be possible.

6. Wound Coils

   Armature and stator winding is not a stand-alone service provided by Chinese factories. Instead, motor assembly factories typically have winding workshops within the factory. The key then is finding a quality motor factory with excess capacity and the desire to sell its winding services.

   Caution should be taken with selection of equivalent wire and insulating materials such as tape and paper. Fortunately, companies like Phelps Dodge offer the same magnet wire in China that are offered in the U.S. but Chinese equivalents are often less expensive. Even if insulation types are offered that are by definition acceptable, wire should be tested by an independent laboratory for its thermal properties, high voltage breakdown, etc. Tests should be performed to detect pinholes in the insulation.

   For windings that require UL/CSA tests be sure to check the list of UL approved products. In some circumstances the specific insulating materials and even terminals and crimp fittings do not allow for substitution. In that case it may still be economically feasible to provide those components from US sources, the wire from Chinese sources, and do the winding and assembly in China.

Conclusions

China offers considerable cost savings: a requisite to remaining competitive. Motor components can be successfully sourced but at the cost of increased vigilance and increased transit times. Commutators, brushes, shafts, laminations, magnets, and wound coils are but a few of the components that can be successfully sourced.

There is also opportunity for the fabrication of other mechanical components such as end bells and motor tubes as well as for brush assemblies, and complete wound armature and stator assemblies. Many of the general issues and specific issues discussed can be extended to the sourcing of all motor components from China.

References

[1] MMPA Standard 0100-01, Standard Specifications For Permanent Magnet Materials.

Michael Bloom received his BS in electrical engineering from The City College of New York and an MS in Counselor Education from CW Post College of Long Island University. His professional career includes teaching and counseling as well as technical journalism as President of the Technology Communications Group. In his current position he is founder and President of Sinotech (USA) Inc. and Director of SinoTECH International (China) Ltd.. Sinotech is a major offshore manufacturer of various motor components as well as other mechanical and electromechanical parts.

Appendix A - Why China?

1. Labor rate
   The wage rate paid by Chinese companies varies from $100 per month to $800 per month for labor ranging from blue collar assembly to white collar engineering. This is the labor rate that is calculated into the cost of the product. Foreign owned Joint Ventures (JVs) pay the best salaries and positions with JVs are highly coveted. American companies cannot directly hire Chinese citizens. Instead, labor companies hire Chinese nationals, pay the required benefits, and charge a management fee to the foreign company.
2. Abundant indigenous raw materials
   Most raw materials are available in China as native products. For example, natural rubber, steel and aluminum are all native. However, due to the growth in the Chinese economy, even native materials are often insufficient to meet the demand, so China has become one of the world's major importers of scrap iron, aluminum, copper, and steel.
3. Well developed industrial base
   Since China was isolated from trade with the west from 1949 until the beginning of President Nixon's ping pong diplomacy in the 1970s, China developed a highly self-sufficient industry. Aided by the Russians during the 1950s and 1960s, many large industrial facilities were built.
4. Aerospace and defense industries
   Spurred by the need to develop militarily, China built many factories that are "mil-spec". Certain regions of China, such as inland Szechuan and cities such as coastal Dalian are particularly noted for these plants. As the military standoff with the Soviet Union faded, China converted many of these factories to civilian production.
5. Mature communications and transportation infrastructure
   Ten years ago, telecommunications with China was fraught with problems. Phone lines were scarce, connections noisy, and costs prohibitively high. Now fax and voice communications between the US and China are cheap and reliable. Connections via Internet are becoming more common, dropping costs substantially. Broadband is common in cities with ADSL most common. Lack of roads was a problem but now many superhighways are in place or under construction between metropolitan hubs. Ocean shipping from coastal cities is fast and reliable with typical transit times of 21 days to US west coast ports .
6. Stable economy
   The Chinese economy is surprisingly stable. For example, although China has experienced periods of high inflation due to double-digit growth in its economy, export prices have remained surprisingly stable. By international agreement, the ratio of the Chinese Renmenbi (RMB) to the U.S. dollar is held fairly constant. Quotations to US companies are almost always in US Dollars. With it ascension to the World Trade Organization exchange rates may vary if the Chinese Yuan is allowed to float against world currencies.

Appendix B - Ideal Attributes of a Third Party Provider

1. Offices in the US and China
   A company based solely in the US is unlikely to produce the same results during the negotiating process as a company with on-site negotiators. One of the arguments for going "Direct" is the expectation that a direct negotiation will produce lower prices than using a third party since the third party will take some profit. However, this is not typically true. A good on-site negotiator, armed with knowledge of the culture, long-term experience with the factory, and a portfolio of projects completed and under way is almost guaranteed to get a better price. Sourcing cannot be done well at a distance . it requires face-to-face meetings.
2. Native Chinese engineers and negotiators in China
   Communications takes place on many levels: verbal and non-verbal. US based negotiators, even in face-to-face meetings with Chinese counterparts, are at a disadvantage. The best results are achieved when Chinese negotiators, working for you, understand your goals, are given the broad parameters, and are set free to accomplish the goals according to Chinese precepts.
3. U.S. based engineering staff
   As in most of life's complex activities, given the opportunity for something to go wrong , it will . and at the most inopportune time. It is exceedingly frustrating to work directly with China via phone, fax, or email, and not have someone to talk with during your working hours, or to have to communicate with someone who speaks English haltingly. A U.S. based third party provider avoids this problem.
4. Quality assurance program in place
   Even more than in the US, assuring quality from China requires constant vigilance. The quality program should demonstrate to your satisfaction (see below) before engaging the services of a third party.
5. U.S. and Chinese based logistics
   There is a lot of detail work connected with the importation of products from China. Errors in documentation can cause significant delays and can be rather expensive. The third party provider should be well versed in these issues and should not merely tell you to "call your customs broker". Some third party providers can handle the transaction from shipping, through customs clearance, to surface shipping to your receiving docks. Some can even provide warehousing and provide JIT and Kanban delivery to your production line from their warehouse.
6. Legal recourse & product liability insurance in the US
   In the US, we have a legal system that protects both sides in a contract dispute. Under pressure from the World Trade Organization, a group in which China seeks membership, China's legal system is improving rapidly. However, litigating in China is still a quagmire. However, if you work with a third party who takes legal title from the Chinese manufacturer and then re-sells to you, you then have legal recourse in the US in any dispute that may arise. Also, considering the litigious climate in the U.S. purchasers are often concerned about product liability insurance. Such insurance is not offered by Chinese factories, but may be offered by third party providers.

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