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AsiaInspection Q1 Barometer: What Does the New Year Hold for Global Supply Chains?

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AI’s 2018 Q1 Barometer offers a collection of unique insights on the state of sourcing, quality and compliance in 2017, as well as the trends that will shape the sourcing landscape of 2018. The analysis is based on the findings of AI Annual Global Sourcing Survey of 250+ companies working across 8 regions and 7 consumer products segments, as well as data gathered in the course of 250,000 inspections, lab tests and audits performed in 85 countries in 2017.

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AsiaInspection Q1 Barometer: What Does the New Year Hold for Global Supply Chains?

  1. 1. WHAT DOES 2018 HOLD FOR GLOBAL SUPPLY CHAINS? AI 2018 Q1 BAROMETER
  2. 2. GLOBAL SOURCING TRENDS: CHINA MAINTAINS LEADERSHIP WITH PROMISE OF FURTHER GROWTH IN 2018 * Source: 2018 AI Global Sourcing Survey of 250+ businesses China inspection volumes +9% 50% AI clients expect to source more from China in 2018*
  3. 3. GLOBAL SOURCING TRENDS: CHINA’S COMPETITION IN THE ASIA PACIFIC DEMANDFORINSPECTIONSRISESINASIAPACIFIC Vietnam remains a strong regional competitor for Footwear +12%CAMBODIA SOUTH KOREA +25.9% +19.3%THAILAND
  4. 4. SOURCING DIVERSIFICATION CONTINUES Inspection volumes in the SOUTH AFRICAN region expand by +11% YoY in 2017 Sourcing from LATIN AMERICA expected to increase among AI clients
  5. 5. GLOBAL SOURCING EXPECTATIONS FOR 2018 AND BEYOND Trade policy uncertainty named as the most impactful factor for supply chains in 2018-2020 Technological trends (automation, big data, 3D printing) viewed as less influential by comparison
  6. 6. TOP SOURCING CHALLENGES OF 2018: COST AND QUALITY Cost of production and raw materials named the top sourcing challenge of 2017 and 2018 Product quality expected to be a greater concern in 2018
  7. 7. ETHICAL COMPLIANCE REMAINS CAUSE FOR CONCERN Ethical scores down by 4% Share of critically non-compliant “Red” factories up to 32% (vs. 27% in 2016) Food industry shows strongest deterioration, with 11% drop in ethical scores compared to last year Most businesses’ views on compliance are overly optimistic and in stark contrast to factual audit data
  8. 8. SUPPLY CHAIN VISIBILITY REMAINS A STRUGGLE ONLY 11% of companies have full supply chain visibility 89% Blind spots present in 89% of supply chains ONLY 55% An average business knows only 55% of their suppliers (38% for SMEs)
  9. 9. IN-FACTORY PRODUCT QUALITY SHOWS OPTIMISTIC TREND of products outside AQL in 2017 vs. 27% in 2016 23% 70% of AI clients reported an improvement in product quality during past 12 months
  10. 10. QUALITY PERFORMANCE BY INDUSTRY WORST PERFORMER: Textiles and Apparel 33% Beyond AQL MOST IMPROVED: Toys and recreational products (5-point drop in Beyond AQL)
  11. 11. PRODUCT SAFETY AND COMPLIANCE PROVES DISAPPOINTING IN 2017 OF AI CLIENTS SAY THEIR PRODUCT SAFETY AND COMPLIANCE IMPROVED IN 2017 54%ONLY REPORT A DETERIORATION IN PRODUCT COMPLIANCE COMPARED TO 20164%
  12. 12. US VS. EU: DISPARATE PERFORMANCE IN LAB TEST FAILURE RATES DOUBLED FOR PRODUCTS INTENDED FOR THE US Banned phthalates found in 9.0% 8.1% contained unacceptable levels of heavy metals REACH COMPLIANCE (EU) IMPROVED BY 35% COMPARED TO 2016: Phthalate content: 3.5% failed tests Heavy metal content: 3.2% failed tests
  13. 13. www.asiainspection.com info@asiainspection.com facebook.com/asiainspection twitter.com/asiainspection linkedin.com/company/asiainspection   

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