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

AsiaInspection,

A leading quality control service provider
A 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.
AS IA MANU FACTURIN G
LIFE AFTER R ANA 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
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
W ITH CHRIS TMAS BE HIND US

AR E CHINESE TOYS FINA LLY SAFE?

China continues to dominate toy manufacturing

80%
of all toys sold in western countries
are made in China

which is when up to 70%
of all toy sales occur

consumer safety was
on the agenda last quarter
•	 In November, 200,000 dolls made-in-China were seized at US ports
for containing high levels of phthalates (a banned chemical used in plastic)
•	 The same happened in France in December with
30,000 non-compliant Chinese toys destroyed by customs
•	 Concurrently, a U.S. Public Interest Research group
analyzed 50 toys and found lead 29 times the safety limit,
banned phthalates, excessive levels of cadmium and choking risks.

n
ectio ction
on
aInsp ctipe
AiaIAsiaIns
Assi nspe
The Toys & Recreational industry shows a worrying trend
The Toys & Recreational industry shows a worrying trend
with the number of failed toy inspections in Asia rising
with the number of failed toy inspections in Asia rising

2012
2012

27%

2013
2013

33%

While most failed inspections
were for minor non-life threatening issues

more than 4% of toys

AsiaInspection

testing by AI did not pass safety standards
testing by AI did not pass safety standards
SOUR CINGOFPOWER :
THE WORLD
NA VS. REST
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
on
AsiaInspection
AsiaInspecti AsiaInspecti

Cambodia doubled
despite protests
over wage concerns
WHAT TO EXPECT
URCING
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 AsiaInspection
on
AsiaInspection
pecti on
AsiaInspe cti
AsiaIns

“
“

2014 will be a year of transparency
ABOUT ASIA INSPECTION
™
YOUR EYES IN THE FACT ORY

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

... AI serves more2,7003,000 clientstwenty offices worldwide
... AI serves than clients with with twenty offices worldwide
Twitter.com/asiainspection
Facebook.com/asiainspection
Linkedin.com/company/asiainspection

W W W. A S I A I N S P E C T I O N . C O M

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

  • 1. The Year of Social Accountability in the Supply Chain? AsiaInspection Q4 Barometer
  • 2. SOCIAL ISSUES PLAGUE GLOBAL SUPPLY CHAINS ASIAINSPECTION PRESENTS THE 2013 Q4 BAROMETER A year in review of outsourced manufacturing and the quality control services industry. AsiaInspection, A leading quality control service provider A 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. AS IA MANU FACTURIN G LIFE AFTER R ANA 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. 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.
  • 5. 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
  • 6. 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
  • 7. 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
  • 8. W ITH CHRIS TMAS BE HIND US AR E CHINESE TOYS FINA LLY SAFE? China continues to dominate toy manufacturing 80% of all toys sold in western countries are made in China which is when up to 70% of all toy sales occur consumer safety was on the agenda last quarter
  • 9. • In November, 200,000 dolls made-in-China were seized at US ports for containing high levels of phthalates (a banned chemical used in plastic) • The same happened in France in December with 30,000 non-compliant Chinese toys destroyed by customs • Concurrently, a U.S. Public Interest Research group analyzed 50 toys and found lead 29 times the safety limit, banned phthalates, excessive levels of cadmium and choking risks. n ectio ction on aInsp ctipe AiaIAsiaIns Assi nspe
  • 10. The Toys & Recreational industry shows a worrying trend The Toys & Recreational industry shows a worrying trend with the number of failed toy inspections in Asia rising with the number of failed toy inspections in Asia rising 2012 2012 27% 2013 2013 33% While most failed inspections were for minor non-life threatening issues more than 4% of toys AsiaInspection testing by AI did not pass safety standards testing by AI did not pass safety standards
  • 11. SOUR CINGOFPOWER : THE WORLD NA VS. REST 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
  • 12. 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
  • 13. 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 on AsiaInspection AsiaInspecti AsiaInspecti Cambodia doubled despite protests over wage concerns
  • 14. WHAT TO EXPECT URCING 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 AsiaInspection on AsiaInspection pecti on AsiaInspe cti AsiaIns “ “ 2014 will be a year of transparency
  • 15. ABOUT ASIA INSPECTION ™ YOUR EYES IN THE FACT ORY 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 ... AI serves more2,7003,000 clientstwenty offices worldwide ... AI serves than clients with with twenty offices worldwide