Increased global supply chain transparency in 2014 revealed shocking statistics on the number of forced and child laborers worldwide, while workers across Asia faced consistently hazardous Health & Safety conditions.

1. Cheap Labor
Came at a High Price in 2014
AsiaInspection Q1 Barometer

2. Hong Kong, january 14, 2015
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 2015 Q1 Barometer, a quarterly synopsis
on outsourced manufacturing and the quality control services industry.

3. Looking back at 2014,
AI’s data reveals some interesting trends in manufacturing output quality in Asia
(measured by the Acceptable Quality Level results of onsite inspections)
for four major sourcing regions in Asia.
Notably, AQL inspection results in Bangladesh have gradually improved throughout the year,
from an initial high of over 50% Beyond AQL inspections
to just above 25% in December.
2014 Quality Trends:
All is Not Made Equal

4. It is likely that this is due to the
enormous pressure being applied on brands
to demonstrate ethically compliant supply chains in Bangladesh
following incidents such as Rana Plaza in 2013,
causing buyers to more carefully select suppliers and push them to improve standards.

5. On the food front, data from AsiaFoodInspection, AI’s food inspection arm, shows that
48.1% of inspections in China failed in 2014.
China is struggling with low consumer confidence in food safety
as the country was hit with multiple scandals.
Most notably, the closure of Shanghai Husi Food Co. by authorities after it was discovered to be
supplying expired meat to global brands
such as and

6. a year of
Lost Childhoods
AI’s figures for 2014 shows that
5.6% of ethical audits in Asia failed for Child Labor,
a slight increase over the Q2 figure of 5.5%.
The US Dept. of Labor released a new report in October stating that
there are 168 million child laborers worldwide,
and that over 85 million are engaged in hazardous work.1
Actual children laborers discovered by AI in 2014

7. These aren’t just numbers on a page,
AI auditors continue to discover child laborers in factories.
There’s a disbelief
that child labor can still exist in 2015,
but this is real.
Tackling the issue is no easy task for brands and retailers
in supply chains that are increasingly complex and fragmented,
but action can be taken
to safeguard these children’s childhoods
“
“
said Sebastien Breteau, AsiaInspection CEO.

8. The annual global slavery index by the WFF reported
35 million people in modern slavery worldwide in 2014,
with India and China topping the list.2
Further, Thailand’s billion dollar fishing industry is struggling
after the International Labor Organisation (ILO) announced that
nearly 17% of workers in the industry
have experienced forced labor.3

9. No Health nor Safety
for Workers
The past year also saw unrest regarding working conditions in Asia.
AI’s 2014 figures show that Health & Safety is consistently
the main reason for failure of ethical audits,
Bangladesh scored 4.2 China scored 4.4
with India scoring the worst, at an average of 3.8/10.

10. The Accord on Fire and Building Safety in Bangladesh identified
more than 80,000 safety issues
in 1,106 factories inspected.4
The ILO also published a report stating that Vietnamese factories
still had much work to do to meet international standards for fire safety.5

11. Working Hours and Compensation
are the second most common cause of failure in AI’s ethical audits.
Here again, India scores an average of 3.9/10,
worse than China at 5.3 and Bangladesh at 6.2.

12. However, conflict remains
and Cambodia’s overall ethical audit score for 2014 was just 5.2/10.
Unions claim that
1,200 workers were fired without severance
after they went on strike over working conditions in December.7
The Cambodian Labor Advisory Committee agreed to
increase the minimum wage for garment workers by 28%
to US$128 per month, with the new wage taking effect on January 1, 2015.6

13. What to Expect
in 2015 Global Sourcing
While 2014 did not have any major disasters
involving the loss of human life on the scale of Rana Plaza,
it is evident that despite the work done to raise awareness of ethical compliance,
global supply chains still suffer
from widespread labor abuses.
were found to have one or more Major Non-Compliance for Health & Safety in 2014.
AI’s data shows that
of factories audited
by AI in India
of factories audited
by AI in Bangladesh
50% 43%

14. Transparency and analytics will be key topics in 2015.
Sedex Global published a briefing in September highlighting the risks of corruption
and how it exacerbates supply chains issues, and methods to combat the risk.8
Key among those are audit programs
mated to business intelligence systems such as those developed by AI,
which allow real-time oversight of suppliers.

15. The Deloitte Global CPO Survey 2014 reveals that
These systems will be an essential tool in 2015
for understanding supply chains.
of CPO’s are investing
in supplier portals
list quality of data as a barrier
to the use of effective analytics
cite lack of integration.9
65% 67%
40%

16. Geographically,
changes in global manufacturing cost-competitiveness will likely
cause buyers to take advantage of lower costs and proximity
to consumer markets in countries such as Mexico.
China’s estimated cost advantage over the US is now less than 5%
as the country transitions to increasingly value-added production
with higher labor costs.10
Established and Emerging Sourcing Regions

17. This also allows developing Asian countries such as
India and Indonesia, whose costs have risen at a comparatively lower rate,
to capture manufacturing volume in apparel and other goods
as buyers develop China +1 sourcing strategies.

18. YEAR IN REVIEW FIGURES
Key KPI’s
Bangladesh China India Vietnam
* Acceptable Quality Level - Source : AsiaInspection data
January
2014February
2014
March
2014
April2014
May
2014
June
2014
July
2014August2014
Septem
ber2014October2014Novem
ber2014Decem
ber2014
60
50
40
30
20
10
0
2014 Beyond AQL* Percentages

19. Bangladesh China India Vietnam
Source : AsiaInspection data
January
2014February
2014
March
2014
April2014
May
2014
June
2014
July
2014August2014
Septem
ber2014October2014Novem
ber2014Decem
ber2014
10
9
8
7
6
5
4
3
2
1
0
2014 Average Audit Scores

20. Bangladesh China India Vietnam
Source : AsiaInspection data
January
2014February
2014
March
2014
April2014
May
2014
June
2014
July
2014August2014
Septem
ber2014October2014Novem
ber2014Decem
ber2014
250
200
150
100
50
0
-50
-100
2014 Inspection Growth Percentages

21. AsiaInspection is a leading global quality control
and compliance service provider
that partners with international Brands, Retailers and Importers
to secure and manage their global supply chain.
about asiainspection
your eyes in the factory!™

22. With unique web-based quality control management,
AI offers Product Inspection, Supplier Audit Programs
and Laboratory Testing services
for more than 4,000 clients worldwide.

23. Dedicated Account Manager
A supply chain partner
offering advice on your specific needs
Comprehensive Online Management
Use your real-time dashboard
to benchmark and identify
your high performing suppliers
Product Expertise
Hundreds of off-the-shelf customizable
product specific checklists
Mobile
Book, check reports
and make decisions on the go
Industry Leading Turnaround
Onsite within 48 hours.
Reports the same day 80% of the time
Flexible
Cancel or modify orders up to 4pm
the day before the inspection for free
Trusted and Truly Independent
100% QC. AI is not involved in sourcing
and protects your factory information
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about asiainspection
your eyes in the factory™

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Press Contact
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Email: press@asiainspection.com

25. 1/ US Dept. of Labor, Bureau of International Labor Affairs. 2013 Findings on the Worst Forms of Child Labor. October 7th
2014.
http://www.dol.gov/ilab/reports/child-labor/findings/2013tda/2013tda.pdf
2/ Walk Free Foundation. 2014 Global Slavery Index. November 17th
2014.
http://www.globalslaveryindex.org/findings/
3/ International Labour Organisation. Employment Practices and Working Conditions in Thailand’s Fishing Sector.
Accessed December 17th
2014.
http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/publication/wcms_220596.pdf
4/ Accord on Fire and Building Safety in Bangladesh. Accord Reached Important Milestone by Completing Initial Inspections
of Factories in Bangladesh. October 14th
2014.
http://bangladeshaccord.org/2014/10/accord-reaches-important-milestone-completing-initial-inspections-factories-bangladesh/
5/ International Labour Organisation. Despite Some Progress, Garment Factories Need to Strengthen Fire Safety. Dec. 11th
2014.
http://www.ilo.org/hanoi/Informationresources/Publicinformation/Pressreleases/WCMS_327036/lang--en/index.htm
6/ Associated Press. Cambodia Increases Garment Industry Minimum Wage. November 12th
2014.
http://bigstory.ap.org/article/81342bb04fe7451da943cc0da4c5575f/cambodia-increases-garment-industry-minimum-wage
7/ Cambodia Daily. Unions Claim Garment Factory Fired 1,200 Workers for Strike. December 10th
2014.
https://www.cambodiadaily.com/news/unions-claim-garment-factory-fired-1200-workers-for-strike-73934/
8/ Sedex. New Sedex Briefing Highlights Need for Global Response to Corruption. December 11th
2014.
http://www.sedexglobal.com/new-sedex-briefing-highlights-need-for-global-response-to-corruption/
9/ Deloitte. The Deloitte Global CPO Survey 2014. December 2014.
http://www2.deloitte.com/uk/en/pages/operations/articles/cpo-survey.html
10/ Boston Consulting Group. The Shifting Economics of Global Manufacturing. August 19th
2014.
https://www.bcgperspectives.com/content/articles/lean_manufacturing_globalization_shifting_economics_global_manufacturing/
Footnotes