q2 2017 ai barometer: 2017 brings product quality issues and ethical challenges
TRANSCRIPT
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2017 BRINGS PRODUCT QUALITY ISSUES AND ETHICAL CHALLENGES
ASIAINSPECTION Q2 BAROMETER
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HONG KONG, APRIL 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 Q2 Barometer, a quarterly synopsis on outsourced manufacturing and the quality control services industry.
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SOURCING GEOGRAPHIES: CHINA MAKES A STRONG START IN 2017
+20%TAIWAN
+10%MALAYSIA
+5.0% VIETNAM
+16%CHINA
SOUTH AFRICAN REGION +23.5%
YEAR
OVE
R Y
EAR
GRO
WTH
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2017 BRINGS CHALLENGES TO HUMAN RIGHTS IN SUPPLY CHAINS
Percentage of “Red” (non-compliant) factories rose to 30% , from 27% in 2016
Average ethical scores at 7.9 out of 10
Most violations found in working hours and wages
30%of "Red" factories
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ETHICAL AUDIT SCORES VARY BY REGION
SOUTHEAST ASIA
8.8
C. SOUTHERN CHINA
7.9
NORTHERN CHINA
7.1
SOUTH ASIA
8.5
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ETHICAL COMPLIANCE TRENDS BY INDUSTRY
MOST IMPROVED
IN Q1 2017 VS. 2016
Bodycare and Accessories
8/10 (10-pt improvement)
WORST PERFORMER
IN Q1 2017 VS. 2016
Toys and Juvenile Products
7.3/10 (8-pt drop)
TOP ISSUES AMONG WORST-PERFORMING
INDUSTRIES
Health & Safety
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STRUCTURAL SAFETY DETERIORATES FURTHER
69%
30.5%
FACTORIES IN NEED OF REMEDIATION
COMPLIANT FACTORIES
Decreased from 37% in 2016and 41% in 2015
4% 65% in need of improvementwith critical safety risksFA
CTOR
Y CO
MPL
IAN
CE Q
1 20
17
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PRODUCT QUALITY: OVERALL LITTLE IMPROVEMENT ON 2016
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MANUFACTURING QUALITY TRENDS BY REGION
Inspection failure rates remain high in
South Asia:Bangladesh: 61.7%
India: 55.3%Pakistan: 52.6%
China shows gradual improvement over the
long term, with Beyond AQL rates around
30%
Turkey makes strides in product quality: rate of failed inspections pushed under 20% , a
two-year low
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QUALITY PERFORMANCE DISPARATEBY INDUSTRY
Tex tiles remains the worst offender: 41.7%
products short of specifications
Toys & Juvenile Products rejection rates remain flat around 30%
Accessories and Eyewear show
improvement at 21.3% and 15% Beyond AQL
rates (down 3 and 4 points
compared to 2016)
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SAFETY RECALLS RAMPANT IN THE E&E SECTOR
Hoverboards under massive product safety investigation after a deadly fire
Large home appliances at risk of fire and explosion
Laptop batteries of leading brands
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QUALITY IN LAB SHOWS NO TANGIBLE IMPROVEMENT
INDUSTRIES AT RISK
Toys and childcare articles
Food contact items
MAJOR VIOLATIONS
Pb PhtLead and lead
paintPhthalates Excess levels
of restricted chemicals
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7) CHEMICAL COMPLIANCE: A CHALLENGE FOR SUPPPLIERS TO US AND EU MARKETS
Test results for
SHIPMENTS TO THE US
8% children’s products contained lead
11% toys contained phthalates
8% food contact items failedFDA chemical requirements
SHIPMENTS TO THE EU
5%+ failed REACH requirements for restricted or banned chemicals
11%of toys contained
phthalates
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AsiaInspection (AI), a leading global quality control and compliance ser vice provider
that partners with Brands, Retailers and Importers around the world to secure, manage and optimize their supply chain.
ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™
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ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™
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Onsite within 48 hours. Reports the same day 80% of the time
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Use your real-time dashboard to benchmark and identify your high performing suppliers
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Cancel or modify orders up to 4pmthe day before the inspection for free
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