The consumer products industry is constantly evolving to meet consumer demands. New product trends can arise suddenly, forcing brands and retailers to pivot quickly. We saw this happen virtually overnight at the start of the pandemic, when consumers around the world had to quickly outfit their home offices with webcams and other computer accessories and traded in their work clothes for sweatshirts and hoodies. comfortable outfits for working from home. Now that trend is returning as businesses reopen and consumers return to the office.
While convenience and value have often been the main drivers of product popularity trends in the past, quality has also grown in importance. In a recent McKinsey consumer sentiment survey, it was found that product quality is a key factor for 40% of young consumers.
Quality control is, more than ever, an area that brands cannot afford to ignore, and it requires a new approach amid the continuing uncertainty the pandemic has caused.
Quality issues cost more than many brands realize. According to the American Society for Quality, the costs of quality can consume 15-20% of sales and represent up to 40% of operating costs. And in today’s increasingly online business landscape where online reviews drive the customer journey, quality plays an even more critical role in determining brand reputation.
According to Shopify, up to two-thirds of products purchased online are returned for avoidable reasons including poor quality, damage, and improper descriptions. Additionally, 93% of customers refer to online reviews before purchasing a product, according to data from Qualtrics, with four in five who would have changed their minds about a purchase after reading negative reviews.
But to effectively manage product quality, inventory volume, and supplier relationships, brands must achieve high levels of supplier chain visibility, supply flexibility, and supplier coordination.
The pandemic has taught us that in order to survive organizations must adopt a âadapt or dieâ mindset. This has never been truer than within the supply chain, a function that has faced many challenges for decades as supply networks become more complex, as regulations and controls become more complex. consumers are increasing and the issues of transparency, risk mitigation and quality are increasing.
Many brands work with hundreds or even thousands of factories and suppliers at any given time. The chain stretches from what we see in stores, all the way to raw material dyeing and finishing facilities or even farms that cultivate the fibers used in parts of the product.
These challenges have been magnified as trade wars, progressive bottlenecks and cost increases have led brands to diversify their supplier networks. While such supplier diversification is a potential lifeline, it comes at a cost. Namely, companies struggle to maintain standards of quality, ethical compliance, and visibility.
According to a recent poll out of more than 700 brands and retailers, 77% of companies say they have blind spots in their supply chain and two-thirds do not have streamlined communication with identified contacts with their suppliers. Additionally, more than a third of companies have reported additional ethical issues in their supply chain due to the pandemic. In addition, the share of supplier factories that received a failure rating for critical non-compliance (âredâ) climbed to 27%, a three-year high.
Quality and compliance issues become too important to ignore and those who do not fill this critical gap in their supply chain will perish. It is no longer a question of if, but when.
The supply chain quickly needs a technology-based review. The old way of doing things will no longer suffice. Notably, we have even observed this in our own business. QIMA has partnered with brands for 15 years to help them mitigate the risk associated with poor quality, currently helping over 14,000 brands by performing field inspections and audits at factories.
While we were founded on the mission to be digital first – first to disrupt the traditional inspection industry by data-driven platform – we knew we needed to further disrupt our own business model and deliver end-to-end quality control software that fuses human intelligence with real-time analytics.
In October last year, QIMA launched its collaborative quality management SaaS platform, QIMAone. The platform brings together all the key players in the supply chain – from raw material suppliers to stores – so that they themselves can reliably collect quality control data, enabling brands and retailers to have the the control and visibility they need to manage quality and supplier relationships.
While 65% of quality control managers still rely heavily on outdated tools such as emails and spreadsheets to manage their quality control, QIMAone brings new levels of automation and analysis to an industry that has been bogged down by manual processes.
Using data collection, machine learning enabled the mapping of suppliers and self-guided inspections, suppliers are empowered to participate in the quality control process in a way that they have never been able to do before. This streamlines the workflow, allowing managers to devote more time, energy and resources to other lucrative pursuits, such as building new supplier relationships, business development, and digitizing other processes. operational.
A confident and proactive supply chain, backed by powerful data-driven analytics, is a brand’s best bet for increasing sales, increasing profit margins, and building customer loyalty and brand loyalty. By focusing on greater visibility through the use of a collaborative platform, brands can predict and prevent quality issues before they turn into costly disasters. Ultimately, this allows them to adapt to market changes and manage the volatility of their supply chain while adopting more efficient production processes.
In order to survive and thrive in the next normal, it’s imperative for brands to rethink the way they use technology within their supply chain – before it’s too late.
Download the guide to know what to consider when choosing data-driven quality and compliance software