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AI Q1 Barometer: 2016 in Review - Worrying Trends for Quality and Compliance across Global Supply Chains

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Product quality remains a challenge, as seen from failed inspections and recalls in 2016, while the ethical state of supply chains has improved structural safety and environmental compliance remain a work in progress.

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AI Q1 Barometer: 2016 in Review - Worrying Trends for Quality and Compliance across Global Supply Chains

  1. 1. 2016 IN REVIEW: WORRYING TRENDS FOR QUALITY AND COMPLIANCE ACROSS GLOBAL SUPPLY CHAINS ASIAINSPECTION Q1 BAROMETER
  2. 2. HONG KONG, JANUARY 5, 2017 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 2017 Q1 Barometer, a quarterly synopsis on outsourced manufacturing and the quality control services industry.
  3. 3. SOURCING GEOGRAPHIES: CHINA REBOUNDS, SOUTH ASIA SURGES +18.2%PAKISTAN +12.5%CHINA +11.7%BANGLADESH +5.0% VIETNAM YEAROVERYEARGROWTH
  4. 4. SUPPLY CHAIN SUSTAINABILITY: STRUCTURAL SAFETY STILL A MAJOR ISSUE 63% of audited factories found in need of remediation Critical issues found in 3% factories Number of compliant factories dropped from 41% to 37% YoY 63%in need of remediation
  5. 5. PROGRESS SLOW IN ETHICAL COMPLIANCE Less than a third of factories found compliant 27% of factories had critical non-compliances Top concerns in ethical compliance Forced labor and child labor Sexual harassment Exploitation of refugees
  6. 6. ENVIRONMENTAL COMPLIANCE STILL A STRUGGLE 36% of environmental audits failed in 2016, compared to 31% in 2015 Many brands find ISO 14001 commitment challenging and struggle even with much lower statutory minimum requirements 36%failed in 2016
  7. 7. MORE BRANDS SEEK TO EDUCATE SUPPLIERS AND IMPROVE AWARENESS AI has seen strong demand for workshops and trainings in 2016 Structural safety and environmental compliance education in most demand
  8. 8. PRODUCT MANUFACTURING QUALITY: WORRYING RESULTS OVERALL Consumer goods quality worldwide has deteriorated in 2016 AI data shows a 2.9% increase in product inspection failure rates in 2016 vs. 2015 +2.9%2016 vs. 2015
  9. 9. CONTRASTED QUALITY TRENDS THROUGHOUT ASIA Vietnam shows a small improvement, driving Beyond AQL rates down to 29% Product quality in China remains stable, with failed inspections around 32.4% India, Bangladesh, Pakistan show double-digit growth in inspection failure rates
  10. 10. PRODUCT QUALITY: INDUSTRY BREAKDOWN Textiles most prone to quality problems: 41.6% products beyond AQL Toys & Juvenile Products quality slightly improved by 3 points, to 30.3% of rejected inspections
  11. 11. LAB TESTS SHOW IMPROVEMENT IN PRODUCT SAFETY Failure rates for lab tests at 3.3% in 2016, improvement by +11.4% compared to 2015 3.3%failed in 2016
  12. 12. SPECIFIC TEST RESULTS REMAIN MORE DISPARATE REACH-related tests: failure rates tripled YoY Phthalate tests: 5.4% products fail safety requirements x3 REACH FAILURE RATE 5.4% FAIL PHTHALATE TESTS
  13. 13. 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. ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™
  14. 14. ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™ DEDICATED ACCOUNT MANAGER A supply chain partner offering advice on your specific needs INDUSTRY LEADING TURNAROUND Onsite within 48 hours. Reports the same day 80% of the time COMPREHENSIVE ONLINE MANAGEMENT Use your real-time dashboard to benchmark and identify your high performing suppliers FLEXIBLE Cancel or modify orders up to 4pm the day before the inspection for free PRODUCT EXPERTISE Hundreds of off-the-shelf customizable product specific checklists TRUSTED AND TRULY INDEPENDENT 100% QC. AI is not involved in sourcing and protects your factory information MOBILE Book, check reports and make decisions on the go ALL-INCLUSIVE PRICING Easy to budget. No hidden costs

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