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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