For retailers and fashion brands that outsource their manufacturing, managing product quality and guaranteeing product compliance across their extended supply chain can seem almost impossible. Often, problems with poor quality are undetectable until garments reach the merchandising or buying teams – sometimes they’re already on the shelves.
Poor product quality is one of the top five reasons that customers in the US complain – either because of the poor quality of the product or the damage incurred during delivery. When poor product quality recurs, the retailer faces reputational risk. When reputation is a company’s highest priority, their products must be of the highest quality. British brand Burberry suffered brand damage in the late 1990s and early 2000s with shares falling 10%, wiping £850m off its value. New CEO Marco Gobbetti intends to turn Burberry into a luxury brand to challenge the likes of Dior and Gucci.
Do audits work?
Despite many retailers having existing nominated supplier policies in place, manufacturers often source product components from unauthorised/unknown suppliers, potentially severely impacting on the quality of the retailer’s product. Retailers therefore have very limited visibility and control beyond their primary suppliers. When BBC Panorama uncovered Syrian refugees working in factories supplying UK high street brands, it emerged that the retailer was unaware that the production of their clothes was happening within that location.
One major retailer told Panorama that through their own inspections, they had been unable to locate any Syrian refugees working within their supply chain. This raises the question: are audits really enough? One refugee described how they are removed from the factory when an audit takes place, to prevent their detection.
Improving product quality in the supply chain
Vend HQ predicts that retailers who offer product quality, transparency & sustainability in 2018 will flourish. Whilst customers now expect to know more than ever about where their purchased products have come from, they’re expectations about quality are still just as high.
Approval cycles for artwork, chemical compliance and colour tests are generally managed in multiple portals, spreadsheets and emails. This is time consuming, error-prone and difficult to reconcile back to specific purchase orders. This can result in production delays, additional costs for the brand and could result in the products being late to store.
Segura is able to manage multiple approval cycles – dip tests, colour, artwork approval – for each component of each sales order. It can even prevent sales orders being placed by manufacturers with component suppliers until the appropriate approval cycles are complete.
Because all approvals are tracked and in a single place, the brand finally has a 30,000-foot view of how their manufacturing supply chain is operating. Segura dashboards and reports provide metrics on supplier performance, making it easy to anticipate potential problems and helping to avoid reputational damage and financial loss.
Currently, when a quality problem occurs, it can be difficult to trace the source of the item’s components and find the root cause of the problem. Segura tracks how every order raised with manufacturers flows through the wider supply chain, so the precise provenance of every component for every product per order can be guaranteed. Segura can be configured to enforce ordering of certain components only from specific suppliers and can highlight where manufacturers are likely to be ordering from unapproved suppliers.
The platform can capture audit certificates, as well as their expiry dates, from multiple sources. The system can then alert the retailer to any issue that may not have been found in their own audit but may have been uncovered by another source. Manufacturer and supplier certification and audit documentation can not only be collated in one place with Segura, but can be tracked against every factory to ensure orders are only placed with factories with the current compliance documentation.
Whilst quality is a big issue in the retail industry, that doesn’t mean it has to be difficult to manage, especially if you have Segura helping you along the way. If this relates to your organisation, why not get in touch to see if Segura can also help you.
Originally Published 27/02/2018