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The Year
of Social Accountability
in the Supply Chain?
SOCIAL ISSUES PLAGUE
GLOBAL SUPPLY CHAINS
ASIAFOODINSPECTION PRESENTS THE AI 2013 Q4 BAROMETER
A year in review of outsourced manufacturing
and the quality control services industry.

AsiaFoodInspection,
AsiaInspection,

AA leading food safety service provider
leading quality control service provider
that partners with international Brands, Retailers and Importers
that partners with international Brands, Retailers and Importers
to secure and manage their global supply chain.
to secure and manage their global supply chain.
A SIA MAN UFACTUR ING
LI FE AFTER RANA PLA ZA
2013 was a challenging year
for brands and retailers worldwide in the face of supply chain social issues
for brands and retailers worldwide in the face of supply chain social issues

Most notably the Rana Plaza tragedy in May,
where a factory collapse in Bangladesh
took the lives of

1,129 people
1,129 people
TRAP PED WORKERS

IN JIL IN FACTORY FIRE

The official media reported the fire had been ignited
The official media reported the fire had been ignited
by series of explosions at Baoyuanfeng Poultry
by series of explosions at Baoyuanfeng Poultry

when around 300 to 350 workers were on the site.
EXIT

100 people
escaped

119 people
killed

54 workers
injured

Almost all the doors of the workshops were locked on the outside,
and only a narrow side exit had been left open, which made escaping difficult.
Throughout the year in factories across India,
Bangladesh, Cambodia and Myanmar:

Strikes

Riots
Workers Demanding
Higher Wages

The minimum wage in Bangladesh is half China
The minimum wage in Bangladesh is half China
and Cambodia is $80 per month.
and Cambodia is $80 per month.
Child labor back in the spotlight
Child labor back in the spotlight

78 Million Children Engaged in Child Labor
in the Asia and Pacific Region*

* US Department of Labor. October 2013
Figures for AsiaInspection reflect
brands and retailers are taking action

+61% Audits increase
+61% Audits increase
in Asia for 2013 compared with 2012

While Bangladesh was in the spotlight,
buyers took to securing their supply chain in all sourcing regions, year over year

+47% Audits
+47% Audits
in Bangladesh

+112% Audits
+112% Audits
in India

+58% Audits
+58% Audits
in China
As a result of the tragic incidents in Bangladesh
news emerged of buyers starting to look for alternatives in the region.
AsiaInspection ordered inspection figures further support this.

+36%
+44%

Inspections in Bangladesh
Inspections in India

+71%

Inspections in Vietnam

+114%

Largest exporter for apparel
in volume after China

Inspections in Cambodia
SOUR CING POWER:
NA VS. REST OF THE WORLD
CHINA VS. REST OF THE

Despite fears that China’s competitiveness would be eroded
by the appreciation of the RMB and wage inflation,

China’s exports continue to set new highs.

12.7%

November was up
compared with a year earlier

9.3%

2013 showed an increase
for the period of January to November
compared to 2012

This puts China on track to report
This puts China on track to report

the largest annual trade surplus since 2008
AsiaInspection inspection figures mirror this with a

+17% increase in ordered inspections in China
in 2013 compared with 2012.

Bangladesh exports amounted
Bangladesh exports amounted
to a mere 1% to that of China.
to a mere 1% to that of China.
In 2013, China remained by far
In 2013, China remained by far
the largest sourcing region
the largest sourcing region
used by AI clients.
used by AI clients.

CHINA

BANGLADESH
BANGLADESH

AsiaInspection

n

spectio

AsiaIn

AsiaInspe

ction
2013 confirmed
the trend for new sourcing regions
with Africa
seeing a 47% increase
the second half of the year

Vietnam was up

by 71%

increase

ection

AsiaInsp

on
AsiaInspecti AsiaInspection
tion
AsiaFoodInspec

Cambodia doubled
despite protests
over wage concerns
CT
W HAT TO E XPECING
UR
IN 2014 GLOBAL SOURCING

obvious from the
tragic events in 2013
“ It’sthat transparencycurrent statistics andare in great need.
and accountability

Western buyers do not actually know what’s going on in their factories
Western buyers do not actually know what’s going on in their factories

as was demonstrated when H&M published their entire supplier list.

Sebastien Breteau, CEO of AsiaFoodInspection
on
ction

pe
AsiaFoodInspection
AsiaInspe cti
AsiaIns

“
“

2014 will be a year of transparency
FOOD SCANDALS CONTINUE

TO ROCK CHINA SUPPLY CHAIN

China continues to be a breeding ground for food scandals
led by the combination of

food suppliers eager
to cut costs

extremely limited
government oversight
The increasing number of prosecutions hasn’t worked as a deterrent with

new scandals continuing to arise
on an almost monthly basis.

Wal-Mart China’s own CEO, Greg Foran, recently had to issue a public apology for their

stores selling “other animal” meat, including fox meat,
to consumers.

up 53% AFI food inspections
up 53% AFI food inspections

in 2013 compared with 2012,
amidst the fear and increased sourcing from Asia
ABOUT ASIAFOODINSPECTION
™

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

Silliker Expertise
International network of accredited food testing
& consulting labs: 70 locations in 18 countries.

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
Twitter.com/asiafoodinspect
Facebook.com/AsiaFoodInspection
Linkedin.com/company/AsiaFoodInspection

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AsiaFoodInspection Q4 Barometer: The Year of Social Accountability in the Supply Chain?

  • 1. The Year of Social Accountability in the Supply Chain?
  • 2. SOCIAL ISSUES PLAGUE GLOBAL SUPPLY CHAINS ASIAFOODINSPECTION PRESENTS THE AI 2013 Q4 BAROMETER A year in review of outsourced manufacturing and the quality control services industry. AsiaFoodInspection, AsiaInspection, AA leading food safety service provider leading quality control service provider that partners with international Brands, Retailers and Importers that partners with international Brands, Retailers and Importers to secure and manage their global supply chain. to secure and manage their global supply chain.
  • 3. A SIA MAN UFACTUR ING LI FE AFTER RANA PLA ZA 2013 was a challenging year for brands and retailers worldwide in the face of supply chain social issues for brands and retailers worldwide in the face of supply chain social issues Most notably the Rana Plaza tragedy in May, where a factory collapse in Bangladesh took the lives of 1,129 people 1,129 people
  • 4. TRAP PED WORKERS IN JIL IN FACTORY FIRE The official media reported the fire had been ignited The official media reported the fire had been ignited by series of explosions at Baoyuanfeng Poultry by series of explosions at Baoyuanfeng Poultry when around 300 to 350 workers were on the site. EXIT 100 people escaped 119 people killed 54 workers injured Almost all the doors of the workshops were locked on the outside, and only a narrow side exit had been left open, which made escaping difficult.
  • 5. Throughout the year in factories across India, Bangladesh, Cambodia and Myanmar: Strikes Riots Workers Demanding Higher Wages The minimum wage in Bangladesh is half China The minimum wage in Bangladesh is half China and Cambodia is $80 per month. and Cambodia is $80 per month.
  • 6. Child labor back in the spotlight Child labor back in the spotlight 78 Million Children Engaged in Child Labor in the Asia and Pacific Region* * US Department of Labor. October 2013
  • 7. Figures for AsiaInspection reflect brands and retailers are taking action +61% Audits increase +61% Audits increase in Asia for 2013 compared with 2012 While Bangladesh was in the spotlight, buyers took to securing their supply chain in all sourcing regions, year over year +47% Audits +47% Audits in Bangladesh +112% Audits +112% Audits in India +58% Audits +58% Audits in China
  • 8. As a result of the tragic incidents in Bangladesh news emerged of buyers starting to look for alternatives in the region. AsiaInspection ordered inspection figures further support this. +36% +44% Inspections in Bangladesh Inspections in India +71% Inspections in Vietnam +114% Largest exporter for apparel in volume after China Inspections in Cambodia
  • 9. SOUR CING POWER: NA VS. REST OF THE WORLD CHINA VS. REST OF THE Despite fears that China’s competitiveness would be eroded by the appreciation of the RMB and wage inflation, China’s exports continue to set new highs. 12.7% November was up compared with a year earlier 9.3% 2013 showed an increase for the period of January to November compared to 2012 This puts China on track to report This puts China on track to report the largest annual trade surplus since 2008
  • 10. AsiaInspection inspection figures mirror this with a +17% increase in ordered inspections in China in 2013 compared with 2012. Bangladesh exports amounted Bangladesh exports amounted to a mere 1% to that of China. to a mere 1% to that of China. In 2013, China remained by far In 2013, China remained by far the largest sourcing region the largest sourcing region used by AI clients. used by AI clients. CHINA BANGLADESH BANGLADESH AsiaInspection n spectio AsiaIn AsiaInspe ction
  • 11. 2013 confirmed the trend for new sourcing regions with Africa seeing a 47% increase the second half of the year Vietnam was up by 71% increase ection AsiaInsp on AsiaInspecti AsiaInspection tion AsiaFoodInspec Cambodia doubled despite protests over wage concerns
  • 12. CT W HAT TO E XPECING UR IN 2014 GLOBAL SOURCING obvious from the tragic events in 2013 “ It’sthat transparencycurrent statistics andare in great need. and accountability Western buyers do not actually know what’s going on in their factories Western buyers do not actually know what’s going on in their factories as was demonstrated when H&M published their entire supplier list. Sebastien Breteau, CEO of AsiaFoodInspection on ction pe AsiaFoodInspection AsiaInspe cti AsiaIns “ “ 2014 will be a year of transparency
  • 13. FOOD SCANDALS CONTINUE TO ROCK CHINA SUPPLY CHAIN China continues to be a breeding ground for food scandals led by the combination of food suppliers eager to cut costs extremely limited government oversight
  • 14. The increasing number of prosecutions hasn’t worked as a deterrent with new scandals continuing to arise on an almost monthly basis. Wal-Mart China’s own CEO, Greg Foran, recently had to issue a public apology for their stores selling “other animal” meat, including fox meat, to consumers. up 53% AFI food inspections up 53% AFI food inspections in 2013 compared with 2012, amidst the fear and increased sourcing from Asia
  • 15. ABOUT ASIAFOODINSPECTION ™ 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 Silliker Expertise International network of accredited food testing & consulting labs: 70 locations in 18 countries. 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