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68 MILLION CHILDREN FORCED TO WORK,
DEATH AT WORK EVERY 15 SECONDS
ASIAINSPECTION Q2 BAROMETER
Actual child laborer discovered by AI in 2014
HONG KONG, APRIL 7, 2015
ASIAINSPECTION (AI)
A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER
THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD TO
SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN,
today announces its 2015 Q2 Barometer, a quarterly synopsis
on outsourced manufacturing and the quality control services industry.
ASIAINSPECTION SAW DEMAND FOR ETHICAL AUDITS INCREASE
BY 65% YEAR OVER YEAR.
The ILO published that
EVERY 15 SECONDS SOMEONE DIES
AS A RESULT OF AN OCCUPATIONAL ACCIDENT OR DISEASE.
Factory accident witnessed by AI during an inspection
UPCOMING G7 SUMMIT TO REACH AN AGREEMENT
ON SUSTAINABLE AND ETHICAL GLOBAL SUPPLY CHAINS(1)
.
If this becomes fully implemented, the burden would be on brands and
importers to ensure that they adhere to these global standards.
In France, a law passed in late March that will potentially force all large
corporations to be socially accountable through their supply chains,
including subcontractors.
A key challenge when tackling ethical accountability
is the ever growing complexity of supply chains.
According the Center for Business and Human Rights at NYU,
unauthorized subcontracting remains rampant in Bangladesh creating a
LACK OF TRANSPARENCY FOR BUYERS & CONSUMERS ALIKE[2]
.
AI PROVIDES GPS COORDINATES IN ALL ETHICAL AUDITS
which can be tied to the actual manufacturing location.
HOW IS WATER MANAGED
IN GLOBAL SUPPLY CHAINS?
While much of the focus is still on labor conditions, recent updates show that
brands and retailers are starting to take the environmental impact
of their sourcing strategies seriously.
60% of China’s groundwater is polluted.
25% is so dangerous it can’t even be used for industrial purposes.
In a briefing published by Sedex from 20,000 audits:
42% of audits lacked permits for resource use and waste disposal
and lacked a system for checking their environmental performance
against relevant laws and customers’ requirements.
ARE VIETNAM AND MYANMAR
THE NEXT CONTENDERS?
Although China remains the dominant sourcing region
by sheer volume, AsiaInspection data confirms the trend that
brands and retailers are sourcing more from neighboring countries.
In terms of global inspections performed, from Q1 2014 to Q1 2015,
China’s share in percentage dropped by 12 points.
Big brands are being increasingly drawn to Vietnam
by a younger population and lower wages
than countries such as China and Thailand.
According to the latest Purchasing Managers’ Index for manufacturing,
VIETNAM ROSE IN BOTH OUTPUT AND NEW ORDERS(3)
.
While US imports from China in January were down
for the first time since 2008,
VIETNAM BECAME THE BIGGEST EXPORTER TO THE US
among the 10 Association of Southeast Asian Nations or ASEAN(4)
.
Meanwhile,
MYANMAR’S GARMENT INDUSTRY HAS SEEN SIGNIFICANT GROWTH,
increasing by 300 million USD in the past year
and has doubled in less than three years(5)
.
AsiaInspection figures confirm both trends
with a staggering year over year increase of
for performed inspections
AI figures confirm both trends
with a staggering year over year increases for performed inspections:
This growth has not come at the expense of quality.
VIETNAM OUTPERFORMED CHINA
with a 24% failed product inspection rate, versus 28% with China.
190%
in Vietnam
113%
in Myanmar
&
FOOD SCANDALS HIT
CHINESE AND THAI EXPORTS
ASIA CONTINUES TO INCREASE
IN BOTH MANUFACTURED FOOD AND FOOD SCANDALS.
Australia was struck in February by frozen mixed berries packed in China
that were linked to an outbreak of hepatitis A[6]
. Again in February, tuna canned in
Thailand was linked to histamine poisoning[7]
.
ASIAFOODINSPECTION PERFORMED SERVICES
INCREASED 64% YEAR OVER YEAR.
For the first time in 11 months, food failure rates in China dropped
to 41% in Q1 from 48% in Q4.
Although too early to conclude on a global improvement in food safety practices,
this can be seen as an encouraging sign and could be proof that
BUYERS ARE BECOMING INCREASINGLY CAUTIOUS.
AI BAROMETER
KEY KPIS
Bangladesh	 China	 India	 Vietnam
* Acceptable Quality Level - Source : AsiaInspection data
January
2014
January
2015
February
2014
February
2015
March
2014
March
2015
April2014May
2014June
2014July
2014August2014
Septem
ber2014October2014
Novem
ber2014
Decem
ber2014
60
50
40
30
20
10
0
2014-2015 Beyond AQL* Percentages
Bangladesh	 China	 India	 Vietnam
Source : AsiaInspection data
10
9
8
7
6
5
4
3
2
1
0
2014-2015 Average Audit Scores
January
2014
January
2015
February
2014
February
2015
March
2014
March
2015
April2014May
2014June
2014July
2014August2014
Septem
ber2014October2014
Novem
ber2014
Decem
ber2014
Bangladesh	 China	 India	 Vietnam
Source : AsiaInspection data
250
200
150
100
50
0
-50
-100
2014-2015 Inspection Growth Percentages
January
2014
January
2015
February
2014
February
2015
March
2014
March
2015
April2014May
2014June
2014July
2014August2014
Septem
ber2014October2014
Novem
ber2014
Decem
ber2014
ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™
ASIAINSPECTION (AI), A LEADING GLOBAL QUALITY CONTROL
AND COMPLIANCE SERVICE PROVIDER
that partners with Brands, Retailers and Importers around the world
to secure, manage and optimize their supply chain.
With unique web-based quality control management,
AI OFFERS PRODUCT INSPECTION, SUPPLIER AUDIT PROGRAMS
AND LABORATORY TESTING SERVICES
for more than 4,000 clients worldwide.
The 2015 Q2 Barometer is a
QUARTERLY SYNOPSIS ON OUTSOURCED MANUFACTURING
AND THE QUALITY CONTROL SERVICES PERFORMED BY AI EACH YEAR
(product inspections, supplier audit programs and laboratory testing).
DEDICATED ACCOUNT MANAGER
A supply chain partner
offering advice on your specific needs
COMPREHENSIVE ONLINE MANAGEMENT
Use your real-time dashboard
to benchmark and identify
your high performing suppliers
PRODUCT EXPERTISE
Hundreds of off-the-shelf customizable
product specific checklists
MOBILE
Book, check reports
and make decisions on the go
INDUSTRY LEADING TURNAROUND
Onsite within 48 hours.
Reports the same day 80% of the time
FLEXIBLE
Cancel or modify orders up to 4pm
the day before the inspection for free
TRUSTED AND TRULY INDEPENDENT
100% QC. AI is not involved in sourcing
and protects your factory information
ALL-INCLUSIVE PRICING
Easy to budget. No hidden costs
ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™
1/ German Federal Government. G7 to reach agreement on sustainable supply chains. March 11, 2015.
http://www.bundesregierung.de/Content/EN/Artikel/2015/03_en/2015-03-10-g7-konkrete-lieferketten_en.html
2/ The Sourcing Journal. Ethical Sourcing Forum: Subcontracting More Prevalent Than Brands Believe. March 27, 2015.
https://www.sourcingjournalonline.com/ethical-sourcing-forum-subcontracting-prevalent-brands-believe-td/
3/ HSBC. HSBC Vietnam Manufacturing PMI™. April 1, 2015.
http://www.hsbc.com/news-and-insight/emerging-markets-pmi
4/ United States Census Bureau. U.S. Trade in Goods by Country.
https://www.census.gov/foreign-trade/balance/ [accessed March 27, 2015]
5/ Myanmar Garment Manufacturers Association. Myanmar’s Garment Sector - Opportunities & Challenges in 2015. January 2015.
http://www.just-style.com/market-research/myanmars-garment-sector-opportunities-challenges-in-2015_id229040.aspx
6/ Australian Government Department of Health. Hepatitis A and frozen berry products recall. March 25, 2014
http://www.health.gov.au/internet/main/publishing.nsf/content/ohp-hep-a-frozen-berry.htm
7/ Food Standards Australia & New Zealand. Histamine (Scombroid) Fish Poisoning. February 26, 2015.
http://www.foodstandards.gov.au/consumer/safety/Pages/Histamine-(Scombroid)-fish-poisoning.aspx
FOOTNOTES

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AI 2015 Q2 Barometer: 68 Million Children Forced to Work, Death at Work Every 15 Seconds

  • 1. 68 MILLION CHILDREN FORCED TO WORK, DEATH AT WORK EVERY 15 SECONDS ASIAINSPECTION Q2 BAROMETER Actual child laborer discovered by AI in 2014
  • 2. HONG KONG, APRIL 7, 2015 ASIAINSPECTION (AI) A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN, today announces its 2015 Q2 Barometer, a quarterly synopsis on outsourced manufacturing and the quality control services industry.
  • 3. ASIAINSPECTION SAW DEMAND FOR ETHICAL AUDITS INCREASE BY 65% YEAR OVER YEAR. The ILO published that EVERY 15 SECONDS SOMEONE DIES AS A RESULT OF AN OCCUPATIONAL ACCIDENT OR DISEASE. Factory accident witnessed by AI during an inspection
  • 4. UPCOMING G7 SUMMIT TO REACH AN AGREEMENT ON SUSTAINABLE AND ETHICAL GLOBAL SUPPLY CHAINS(1) . If this becomes fully implemented, the burden would be on brands and importers to ensure that they adhere to these global standards. In France, a law passed in late March that will potentially force all large corporations to be socially accountable through their supply chains, including subcontractors.
  • 5. A key challenge when tackling ethical accountability is the ever growing complexity of supply chains. According the Center for Business and Human Rights at NYU, unauthorized subcontracting remains rampant in Bangladesh creating a LACK OF TRANSPARENCY FOR BUYERS & CONSUMERS ALIKE[2] .
  • 6. AI PROVIDES GPS COORDINATES IN ALL ETHICAL AUDITS which can be tied to the actual manufacturing location.
  • 7. HOW IS WATER MANAGED IN GLOBAL SUPPLY CHAINS? While much of the focus is still on labor conditions, recent updates show that brands and retailers are starting to take the environmental impact of their sourcing strategies seriously. 60% of China’s groundwater is polluted. 25% is so dangerous it can’t even be used for industrial purposes.
  • 8. In a briefing published by Sedex from 20,000 audits: 42% of audits lacked permits for resource use and waste disposal and lacked a system for checking their environmental performance against relevant laws and customers’ requirements.
  • 9. ARE VIETNAM AND MYANMAR THE NEXT CONTENDERS? Although China remains the dominant sourcing region by sheer volume, AsiaInspection data confirms the trend that brands and retailers are sourcing more from neighboring countries. In terms of global inspections performed, from Q1 2014 to Q1 2015, China’s share in percentage dropped by 12 points.
  • 10. Big brands are being increasingly drawn to Vietnam by a younger population and lower wages than countries such as China and Thailand. According to the latest Purchasing Managers’ Index for manufacturing, VIETNAM ROSE IN BOTH OUTPUT AND NEW ORDERS(3) .
  • 11. While US imports from China in January were down for the first time since 2008, VIETNAM BECAME THE BIGGEST EXPORTER TO THE US among the 10 Association of Southeast Asian Nations or ASEAN(4) .
  • 12. Meanwhile, MYANMAR’S GARMENT INDUSTRY HAS SEEN SIGNIFICANT GROWTH, increasing by 300 million USD in the past year and has doubled in less than three years(5) .
  • 13. AsiaInspection figures confirm both trends with a staggering year over year increase of for performed inspections AI figures confirm both trends with a staggering year over year increases for performed inspections: This growth has not come at the expense of quality. VIETNAM OUTPERFORMED CHINA with a 24% failed product inspection rate, versus 28% with China. 190% in Vietnam 113% in Myanmar &
  • 14. FOOD SCANDALS HIT CHINESE AND THAI EXPORTS ASIA CONTINUES TO INCREASE IN BOTH MANUFACTURED FOOD AND FOOD SCANDALS. Australia was struck in February by frozen mixed berries packed in China that were linked to an outbreak of hepatitis A[6] . Again in February, tuna canned in Thailand was linked to histamine poisoning[7] .
  • 15. ASIAFOODINSPECTION PERFORMED SERVICES INCREASED 64% YEAR OVER YEAR. For the first time in 11 months, food failure rates in China dropped to 41% in Q1 from 48% in Q4. Although too early to conclude on a global improvement in food safety practices, this can be seen as an encouraging sign and could be proof that BUYERS ARE BECOMING INCREASINGLY CAUTIOUS.
  • 16. AI BAROMETER KEY KPIS Bangladesh China India Vietnam * Acceptable Quality Level - Source : AsiaInspection data January 2014 January 2015 February 2014 February 2015 March 2014 March 2015 April2014May 2014June 2014July 2014August2014 Septem ber2014October2014 Novem ber2014 Decem ber2014 60 50 40 30 20 10 0 2014-2015 Beyond AQL* Percentages
  • 17. Bangladesh China India Vietnam Source : AsiaInspection data 10 9 8 7 6 5 4 3 2 1 0 2014-2015 Average Audit Scores January 2014 January 2015 February 2014 February 2015 March 2014 March 2015 April2014May 2014June 2014July 2014August2014 Septem ber2014October2014 Novem ber2014 Decem ber2014
  • 18. Bangladesh China India Vietnam Source : AsiaInspection data 250 200 150 100 50 0 -50 -100 2014-2015 Inspection Growth Percentages January 2014 January 2015 February 2014 February 2015 March 2014 March 2015 April2014May 2014June 2014July 2014August2014 Septem ber2014October2014 Novem ber2014 Decem ber2014
  • 19. ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™ ASIAINSPECTION (AI), A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER that partners with Brands, Retailers and Importers around the world to secure, manage and optimize their supply chain.
  • 20. With unique web-based quality control management, AI OFFERS PRODUCT INSPECTION, SUPPLIER AUDIT PROGRAMS AND LABORATORY TESTING SERVICES for more than 4,000 clients worldwide.
  • 21. The 2015 Q2 Barometer is a QUARTERLY SYNOPSIS ON OUTSOURCED MANUFACTURING AND THE QUALITY CONTROL SERVICES PERFORMED BY AI EACH YEAR (product inspections, supplier audit programs and laboratory testing).
  • 22. DEDICATED ACCOUNT MANAGER A supply chain partner offering advice on your specific needs COMPREHENSIVE ONLINE MANAGEMENT Use your real-time dashboard to benchmark and identify your high performing suppliers PRODUCT EXPERTISE Hundreds of off-the-shelf customizable product specific checklists MOBILE Book, check reports and make decisions on the go INDUSTRY LEADING TURNAROUND Onsite within 48 hours. Reports the same day 80% of the time FLEXIBLE Cancel or modify orders up to 4pm the day before the inspection for free TRUSTED AND TRULY INDEPENDENT 100% QC. AI is not involved in sourcing and protects your factory information ALL-INCLUSIVE PRICING Easy to budget. No hidden costs ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™
  • 23. 1/ German Federal Government. G7 to reach agreement on sustainable supply chains. March 11, 2015. http://www.bundesregierung.de/Content/EN/Artikel/2015/03_en/2015-03-10-g7-konkrete-lieferketten_en.html 2/ The Sourcing Journal. Ethical Sourcing Forum: Subcontracting More Prevalent Than Brands Believe. March 27, 2015. https://www.sourcingjournalonline.com/ethical-sourcing-forum-subcontracting-prevalent-brands-believe-td/ 3/ HSBC. HSBC Vietnam Manufacturing PMI™. April 1, 2015. http://www.hsbc.com/news-and-insight/emerging-markets-pmi 4/ United States Census Bureau. U.S. Trade in Goods by Country. https://www.census.gov/foreign-trade/balance/ [accessed March 27, 2015] 5/ Myanmar Garment Manufacturers Association. Myanmar’s Garment Sector - Opportunities & Challenges in 2015. January 2015. http://www.just-style.com/market-research/myanmars-garment-sector-opportunities-challenges-in-2015_id229040.aspx 6/ Australian Government Department of Health. Hepatitis A and frozen berry products recall. March 25, 2014 http://www.health.gov.au/internet/main/publishing.nsf/content/ohp-hep-a-frozen-berry.htm 7/ Food Standards Australia & New Zealand. Histamine (Scombroid) Fish Poisoning. February 26, 2015. http://www.foodstandards.gov.au/consumer/safety/Pages/Histamine-(Scombroid)-fish-poisoning.aspx FOOTNOTES