The first half of 2017 shows that safe and ethical manufacturing is still a long way down the road for global supply chains, while lab tests reveal alarming frequency of chemical non-compliance. Read more in AI’s Q3 barometer

1. QUALITY, SAFETY, ETHICS: SUPPLY CHAINS
STILL STRUGGLE IN 2017
ASIAINSPECTION Q3 BAROMETER

2. HONG KONG, JULY 6, 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 Q3 Barometer, a quarterly synopsis
on outsourced manufacturing and the quality control services industry.

3. GLOBAL SOURCING TRENDS: CHINA KEEPS UP
GROWTH PACE, REGIONAL COMPETITION NOT
FAR BEHIND
+10.4%VIETNAM
+25.4%CAMBODIA
+15%CHINA
SOUTH AFRICA +7.7%
YEAROVERYEARGROWTH

4. 2017 IS PROVING CHALLENGING TO ETHICAL
COMPLIANCE AND STRUCTURAL SAFETY
Share of fully compliant (“Green”) factories dropped to 27.5% (vs. 34% in 2016)
Critical non-compliances were found in up to 32.5% factories
Average ethical scores dropped to 7.5 out of 10, from 7.9/10 in 2016
Lowest scores awarded on the criteria “working hours and wages” and
“waste management”
32.5%offactorieshadCritical
non-compliances

5. LESS REGIONAL VARIANCE IN
ETHICAL COMPLIANCE
SOUTHEAST ASIA
8.6
*
* 9% improvement on 2016
CHINA
7.6

6. ETHICAL COMPLIANCE TRENDS BY INDUSTRY
BEST ETHICAL
SCORES IN Q2 2017
E&E
8.2/10
LOWEST ETHICAL
SCORE IN Q2 2017
Toys and Juvenile
Products
7.2/10
PROMINENT
NEGATIVE TREND
Textile
from 7.8/10 in 2016
to 7.2/10 in 1H 2017
Cross-industry average
7.5/10

7. UNEVEN PROGRESS IN STRUCTURAL SAFETY
Share of compliant
factories up 3.5 pts :
36.5% in Q2 2017 vs.
33% in 2016
Remediation
underway, but not
complete in 59.5%
factories
Up to 4% of facilities
still have immediate
safety risks

8. COMPLIANCE IN LAB REMAINS CHALLENGING
FOR US AND EU IMPORTERS
STATE OF SHIPMENTS TO THE US AND EU
13% products contained lead
9% lots contained banned phthalates
REACH COMPLIANCE (EU)
11.5% products failed lab tests
13%of products
containedlead

9. MECHANICAL HAZARDS:
A MAJOR REASON FOR PRODUCT RECALLS
Recalls for choking hazard and small parts frequent in Q2 2017
High failure rates for mechanical compliance lab tests:
10% of shipments 7% of shipments
10%of shipment to
the US failed

10. PRODUCT QUALITY IN FACTORY:
SLOW IMPROVEMENT IN THE LONG TERM
* down 4 points YoY

11. MANUFACTURING QUALITY TRENDS
BY REGION
South Asian manufacturers improve
on last year, but rejection rates still
50%+ in major sourcing hubs:
Bangladesh: 53.9%
Pakistan: 50.5%
India: 49.3%
China continues trend for gradual
improvement: 31% Beyond AQL in
1H 2017, vs. 33% in 1H 2016

12. PRODUCT QUALITY BY INDUSTRY STILL VARIES
Textiles in the lead for
quality failure: 40%
products Beyond AQL in
Q2 2017
Accessories and
Eyewear quality trend
flat around 20% and
13% Beyond AQL
Toys and Juvenile
Products, E&E: down 2
points vs. 2016 Beyond
AQL values, to 29% and
25% respectively

13. www.asiainspection.com
info@asiainspection.com
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linkedin.com/company/asiainspection
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