Global supply chains off to a rocky start in 2017, as product quality fails to show improvement while ethical compliance deteriorates. Read more in AI’s Q2 barometer

1. 2017 BRINGS PRODUCT QUALITY ISSUES
AND ETHICAL CHALLENGES
ASIAINSPECTION Q2 BAROMETER

2. 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.

3. SOURCING GEOGRAPHIES: CHINA
MAKES A STRONG START IN 2017
+20%TAIWAN
+10%MALAYSIA
+5.0% VIETNAM
+16%CHINA
SOUTH AFRICAN REGION +23.5%
YEAROVERYEARGROWTH

4. 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

5. ETHICAL AUDIT SCORES VARY BY REGION
SOUTHEAST ASIA
8.8
C. SOUTHERN CHINA
7.9
NORTHERN CHINA
7.1
SOUTH ASIA
8.5

6. 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

7. STRUCTURAL SAFETY DETERIORATES FURTHER
69%
30.5%
FACTORIES IN NEED OF REMEDIATION
COMPLIANT FACTORIES
Decreased from 37% in 2016
and 41% in 2015
4% 65% in need of improvement
with critical safety risks
FACTORYCOMPLIANCEQ12017

8. PRODUCT QUALITY: OVERALL LITTLE
IMPROVEMENT ON 2016

9. 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

10. QUALITY PERFORMANCE DISPARATE
BY INDUSTRY
Textiles 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)

11. 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

12. QUALITY IN LAB SHOWS
NO TANGIBLE IMPROVEMENT
INDUSTRIES AT RISK
Toys and
childcare
articles
Food contact
items
MAJOR VIOLATIONS
Pb Pht
Lead and lead
paint
Phthalates Excess levels
of restricted
chemicals

13. 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 failed
FDA chemical requirements
SHIPMENTS TO THE EU
5%+ failed REACH requirements
for restricted or banned
chemicals
11%of toys contained
phthalates

14. 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.
ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™

15. ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™
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
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and make decisions on the go
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