Despite significant efforts to contain the spread and global impact of COVID-19, the situation has worsened, affecting people and companies all around the globe. The full implications of COVID-19 on the supply chain remain difficult to predict, with some areas slowly returning to activity while others are now being adversely affected by the virus. It is, however, possible to see that, at this stage, the crisis is having a direct influence on the supply chain, from raw materials to finished products.
As a company with a strong presence on the ground, visiting factories every day, we at API have seen first-hand some of the challenges that brands and retailers are facing in their supply chain. We are helping our customers and their suppliers brace for the impact this extraordinary crisis has had, and continues to have, on their supply chain, providing them with short-term solutions that will help them maintain high quality in their processes and goods while ensuring that the people on the ground remain safe.
Supply Chain Challenges
We were confronted with the gravity of the crisis during the first peak of the virus in China, where some factories were unreachable, production stopped, goods were unable to be shipped, etc. Now that activity is resuming in this part of the world, the challenges have evolved, resulting in many companies putting the quality of their products at risk. It is important to bear in mind that these challenges will most likely be replicated in other manufacturing areas when activity resumes. Therefore, a sound understanding of those issues now might allow for quicker reactions in some of your other sourcing locations. Among them are:
- Shortage in labor/workforce: factories are struggling to get 100% of their employees back on site due to health issues or travel restrictions. This might encourage factories to hire new people lacking experience, with no time for adequate training and with the risk of undeclared subcontracting.
- Inadequate production planning and status: when resuming activities, some factories might not operate at their full capacity which will render it difficult to meet production targets. It is important to check your factory records in order to see actual people in the production line, daily output, and quality control reports.
- Rush in production: when factories are able to resume activity, some might be in a rush to make up the time they lost and may be tempted to cut corners and speed up processes. Some steps are rushed leading to mistakes, and some steps are directly skipped such in some cases the quality control, which might put your entire production at risk.
- Excessive stock: goods that were produced before the virus outbreak have likely been held in the warehouse while awaiting shipment. In warehouses where storage and conditions are not satisfactory, complications such as deterioration or the development of mold may have emerged.
- Raw materials shortage: resumption of activity leads to an increased demand for raw materials and components, thus resulting in a shortage. Brands and retailers can shift their production to areas that are less impacted, such as other SEA countries, which involves a risk if the new suppliers and factories are not adequate.
- Lack of quality control to ensure safety: at the height of the epidemic in China, factories and third-parties reduced the movement of people in and out the premises to avoid putting employees at risk. This meant a decrease in the level of quality control, which put the production quality at risk.
7 Tips to Help Alleviate Disruptions in the Supply Chain
This crisis may be the catalyst to revisit the global supply chain strategy and accelerate the adoption of new models and capabilities, but in the meantime short-term actions are needed to respond to the challenge.
Here are some tips from a manufacturing perspective to help with the continuity of your supply chain while maintaining quality products:
- Care about your people and your supplier’s teams
- Educate employees on COVID-19 symptoms and prevention
- Ensure your factory has screening protocols
Training and specific audits that focus on the measures to be adopted during this crisis are a good tool to ensure the health and safety of the teams.
- Increase your visibility on workforce/labor planning
- Check actual capacity of your factories
- Assess impact on production times
- Pay additional attention to product quality as plants run with fewer workers and some might hire temporary/new staff who might be unqualified
Data collection here is key: from gathering the records of the factories for a quick screening, to implementing more in-depth measures such as technical audits, in-line inspections or in-production assessment, having greater visibility of the real situation of your factories is vital at this stage to not only ensure the completion of your production on time but also the quality of the goods delivered.
- Understand your key suppliers and increase the transparency of all your supply chain
- Understand the impact your orders have on one’s factory production lines
- Understand the flexibility one factory has in regard to production / purchase shifts
Whether your orders only represent a small portion of one factory’s production lines or you are flooding these same production lines with your goods makes a huge difference as to how to interact with this factory. If you are not a key customer, you need to make sure you understand how the factory will be dealing with your order when/if they face a shortage of staff or inventory.
- Carefully select the suppliers you’ll work with if you are shifting countries
- Ensure you’re working with the right suppliers for your productions
The concept of shifting production to other areas was already on the table before the virus appeared, with a trend among many companies toward considering moving ‘out of China’. Diversifying areas of production and looking for alternative locations can help secure additional inventory and capacity. However, launching production in a new area can be challenging if you don’t have the experience or the right teams in that specific area. A third-party company can support you with adapted solutions to facilitate the transition and ensure the quality of your production through a dedicated technician program.
- Update inventory policy and stock management
- Before = as little stock as possible
- Now = need to anticipate and increase safety stock
This might lead to associated risks such as product deterioration or mold development which can be identified via a final inspection and tackled with a warehouse condition audit or a more elaborate mold prevention program.
- Align IT systems and support evolving work requirements
- Manage quality remotely
- Use new IT tools and solutions
We are being forced to shift from a culture of ‘on-site’ work to ‘remote work’. Be ready to embrace change and to consider possibilities that were not even contemplated a few months ago, such as video-monitored inspections.
For brands, retailers and importers’ quality management teams, online quality management solutions can help manage your goods’ quality even when working from home. With a simple click of the mouse, it is now possible to keep track of your quality actions, read reports and make decisions on whether or not the goods should be shipped. Expert technicians are also one video/phone call away, offering their support in these difficult times and finding the best possible solutions to cope with the crisis.
- Prepare for the rebound
- Be ready to move quickly
We are, without doubt, facing exceptional times and although it is impossible to anticipate when and how this epidemic will pass, we need to remain confident, align our efforts and prepare for a brighter future. Stay alert and ready for change: those that are able to adjust quickly will have a higher chance of rebounding and adapting to the times ahead.
At API we are putting our manufacturing experience and product expertise at the disposal of our clients to help them adjust during this difficult time. Thanks to the agility and flexibility of our teams and our local infrastructure we are able to quickly implement on-site and remote solutions to respond to our clients’ needs.
Do not hesitate to get in touch with us to discuss your supply chain challenges.
You can be more hands on in approach to factory and production monitoring and inspection.
They initially had committed to making this transition by 2020, but they ended up meeting their target 3 years early! This is one great commitment to the realm of renewable energy.
Apart from this they are currently investing loads of money and time into finding alternatives to plastic for their famous building blocks.
As consumers increasingly dictate how manufacturers design and make toys, the power of adopting CSR and green initiatives as a part of your competitive strategy will have global results for your brand.
What do I mean by this?
The toy quality management system you choose to adopt will provide a framework for which CSR is able to be strategically implemented for your brand. Lego is a prime example of this. Whilst they are a children’s toy brand, they have committed fully to sourcing a more environmentally friendly plastic for their iconic plastic blocks. Even though they have not yet found a suitable alternative, their commitment and investment in trying to, puts them at the forefront of an initiative consumers the world over want to see and be a part of.
So I put the question to you…
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It is at this point that
A random furniture sample will be selected at this point, where they will each be checked one by one to inspect whether or not they meet the following;
A social compliance audit can be difficult to attain, but is an absolute necessity for that transparent supply chain your consumers today are demanding.
A social compliance audit ensures that a factory and its practices are abiding by all local laws and that you meet all of the social obligations as set out by the guidelines of the audit, from fair wages to no instances of child labor in a factory.
In this blog post, I will outline the exact procedure of this audit, the benefits it offers to your consumer electronics brand and how you can go about conducting this audit for yourself.
So, let’s dive in…
Document reviews – Auditors will check all the documentation of the supplier to determine the presence of any possible child labour, an all too common violation within the consumer electronics industry. They also assess whether there are any violations of extended working hours and wages. They will also look into what types of social insurance are available to workers and review any fire and safety documentation, which will help to determine whether or not any safety precautions or plans are in place. They will also inspect whether or not there is any environmental monitoring being done and, if so, how it is conducted.
Employee interviews – The auditors conduct interviews with the factory in question staff, where they ask them about their working hours, overtime, and about their holiday/leave time. Auditors also like to cross check these statements by interviewing factory management to ensure there are no discrepancies. This helps to clarify whether there are any instances of abuse or misconduct between staff and management. In the case of a re-audit these interviews will then be conducted again to ensure improvement plans are being implemented properly.
Closing meeting with audit status – This meeting reveals the audit results of your CE factory and also makes suggestion for improvements. If you use 
In understanding the ethical compliance standards as laid out above, you are able to make informed decisions about the suppliers you choose to use in the manufacturing of your electrical products.
On 23rd December 2014, the Consumer Product Safety Commission (CPSC) announced the recall of over 7 million coffee machines.Between 2010-2014, there were over 200 complaints of boiling water spraying out of the machine and approximately 90 burn injuries reported.It has been recently announced that Keurig has 
In fact, the inventor today does not get a dime out of the sales of this popular children’s toy, as she was told her idea was not good enough and wouldn’t sell. Needless to say, millions of these toys are sold the world over.
But, she could count that as somewhat of a blessing…
Recently, over 
It turns out that 
Many organizations do not have the extensive geographical networks that larger retailers have.
Therefore your internal staff ends up spending a lot of time traveling for quality control inspections, with not enough time spent focusing on the quality of a product. This often slows down production processes, with a longer eventual time to market.
If we take the Fidget Spinner example into consideration, what is the likelihood of your in-house team being aware of that noncompliance before it hit the market.
Think about it.
An occurrence such as the above puts your brand at an unnecessary risk, with the potential for bad publicity and a major loss in sales.
Can your organization afford this?
Some testing equipment may be unique to a specific product or if there is an update in testing procedures to be inclusive of recent changes in regulation.
Often external providers are able to provide technical solutions based on the above specifications, along with teams that are well versed in new testing procedures.
External providers will often send their inspectors on training to familiarize themselves with new equipment and testing procedures to ensure a high quality service is offered with a minimum product recall rate.
For third party quality providers it is a priority to be up to date with the latest trends and developments in your industry along with the best practices that you should be following.
This kind of knowledge and expertise can be leveraged to your competitive advantage.
your product.
Add all of this together, and you begin to see higher profit margins and the ability in which you can meet your products supply and demand will also have grown, creating that desired competitive advantage.
Let’s take a brief look at the Technical Compliance File solution;
This is a compliance solution that allows you reliable and accurate insights into your compliance processes.
It is offered through a web-based platform and is a 
Inspection reports are essential in getting shipments released from customs. It will be up to the retailer alongside your quality provider to set up a report rating guideline.
This report rating guideline forms a baseline of automation which reduces the amount of manual changes after the reports review. The manual reviewing of these reports slow down the auto shipment processes immensely and this entire process becomes less meaningful.
An external quality provider will be able to provide you with industry knowledge and best practices relating to rating reports. You will also be able customize your rating reports according to your product needs.
Once this report rating has been created, your quality provider can utilize their technical systems to send daily reports to both the client and your chosen cargo company. This creates a much clearer and faster release process for both you and the cargo company.
The mountain of paperwork from import licenses to full inspection reports, they have it down to a tee, enabling a streamlined, efficient process for your organization.
Traditionally an inhouse team often releases inspection reports as and when they receive them causing major delays, this is often due to in-house QC teams needing to travel extensively, which means they don’t have enough time to make the approvals that are needed for the shipments to be released in a timely manner.
Not to sound repetitive, but to have an in-house team that has the capacity to manage the logistics involved with shipping would be a dream, no doubt, but getting through customs safely stems from being efficient in all the other points I’ve made above.
In-house teams without the right amount of time, resources and technical expertise will struggle to cope with issues that could have otherwise been prevented.
So here’s the deal…
Managing quality is a complex system that needs 100% of your attention and focus.
Are you able to dedicate that kind of time and resource to ensuring just that?
This is a question that many often do not want to answer, but the reality is that you often cannot afford the time and resource that goes into creating fully optimized quality systems that can produce high-quality products for your brand and on time.
So, what then?
It might be worth considering hiring an external third party quality provider that can give you the time and resources that you need to streamline your supply chain operations.
A third party quality provider is able to provide you with;
* The latest in product regulation
* Technical expertise
* They have the appropriate technology to streamline your operations
* They have the know how on how to navigate the waters of international logistics for your brand.
This will give you room to begin focusing on what you are good at; producing those high-quality products and creating a level of trust with your consumer that is globally competitive.
Have experienced working with third party quality inspection services? 
Product specification can look anything like your products dimensions, the volume, it’s weight, the color and any specific labeling that it may need to meet regulation.
In your specifications you need to ensure that you are as specific as you can possibly be, from specific color palettes to the maximum weight of an electric blender. The more specific you are, the easier it will be for your supplier to meet your specifications.
These specifications will also provide your supplier’s quality control team with a standard/guide to monitor the production of the item appropriately.
This is where the 
A laptop’s battery overheating that when unattended whilst charging can cause fires would be classified as a critical defect.
Therefore an important question you should be asking your supplier before all this is, how they will go about preventing any quality issues that may arise during your operation?
Understanding how your supplier handles quality pressures and compliance procedures will help define what kind of relationship you have with them.
Before mass production, your supplier needs to provide you with a 
