Businesses that digitise their supply chains can raise quality and compliance measures, unlocking bottom-line benefits in the long-term
The COVID-19 pandemic, which began as a public health crisis, has triggered significant changes in how global brands, retailers and importers manage their supply chains, underscoring the importance of speed, agility and efficiency. And as a result of global manufacturing and transportation disruptions, the path towards effective supply chain digitisation has been accelerated.
In today’s increasingly digital marketplace, a business can use the digitisation of its supply chain as a distinct competitive advantage in bolstering its brand reputation. Furthermore, in a constantly evolving global business climate, businesses that digitise are able to more nimbly shift their sourcing operations between geographies so they can hedge against disaster and disruption.
In the end, such digitisation future-proofs a business by unlocking long-term growth opportunities, ensuring customer satisfaction and driving the bottom line.
Supplier disruptions left businesses in the dark
COVID-19 has challenged organisations involved in global trade worldwide to take a hard look at areas of their business that left them most vulnerable to risk and unable to meet ever-changing consumer demand. With no roadmap to guide retailers and suppliers on how much to order or manufacture or where to stock, the demand forecasts typically relied on were shattered. We saw sudden lockdowns and shifts to working from home cause panic buying of essential food items and household goods, while work clothes lingered on the shelves of shuttered stores, unsold. And this uncertainty has continued.
Apart from missing the supply and demand mark, businesses with a low degree of supply chain digitisation were also twice as likely to suffer from serious product quality and supplier communication issues, according to a recent survey of 700 global businesses conducted by QIMA. When you combine product quality issues with supplier delays, it’s a recipe for disaster. This is why it’s more alarming that less than half (44 per cent) of the surveyed businesses reported having a highly digitised supply chain, and up to 85 per cent admitted to blind spots within their supply chains.
Cash is still king – and quality is its close confidant
Against a global recession and mass uncertainty, cash flow is a boardroom centrepiece. But innovative businesses know that if cash is king, quality is among its closest confidants. Above all else, high-quality measures in the supply chain secure the bottom line by helping businesses to deliver flawless products cost-effectively and on time, while bolstering brand image in the marketplace.
Notably, COVID-19 profoundly changed consumer behaviour, with the rise of online shopping pressuring businesses to consider how returns, fast shipping and reviews impact operational decisions and profit margins. Moreover, as ethical and environmental consumerism continues to rise, businesses must also prioritise sustainable sourcing, transparency and traceability mechanisms in their supply chains.
In monetary terms, quality-related costs can consume 15 to 20 per cent of sales. According to Shopify, 10 per cent of products purchased online are returned for preventable reasons, including poor quality, damage and not matching the description. In addition, 93 per cent of customers reference online reviews before buying a product and four out of five consumers have changed their mind about a purchase after reading negative reviews.
Global supply chains need a 360-degree view, from factory to shelves
In order to hedge compliance and quality risks, businesses must gain a holistic view into the entire product journey – from the raw material producer to the factory to the moment it hits shelves or arrives at a customer’s door.
With a digital quality inspection platform like QIMAone, inspectors anywhere in the globe and at any step of the manufacturing process can upload data immediately using their mobile device, increasing pace, accuracy and convenience – gaining up to 50 per cent in efficiencies over manual entry. Furthermore, cloud-enabled features facilitate collaboration with inspectors and suppliers remotely, a critical capability during travel restrictions and quarantines. Multilingual interfaces, live chat collaboration, in-app training content and efficient corrective action tracking help foster collective intelligence within the supply chain and ultimately improve quality and compliance.
Overall, workflow automation for inspection and auditing processes can help save time for all stakeholders of the supply chain, accelerating the speed to market and mitigating expensive buybacks.
Now is the time to future-proof supply chains
Indeed, perhaps the most prized feature of a digital inspection platform is that it transforms supplier relationships and encourages continuous improvement. The digitisation of quality and compliance processes allow for the collection of harmonised, reliable data that can help retailers and suppliers go from a reactive mode to a risk-based, proactive approach where they can predict and anticipate quality risk.
Thanks to real-time visibility of the factory floor, each relationship is no longer based on a standard client-vendor contract. Instead, the mutually beneficial relationship is anchored by transparency, partnership, teamwork, cost-effectiveness and, ultimately, customer satisfaction. This level of visibility can save businesses precious margin points annually by streamlining processes, reducing human error and allowing for cost-effective supplier diversification.
By reimagining the supply chain built on visibility, trust and collaboration, businesses are fortified to successfully overcome costly challenges brought on by the pandemic and other unexpected disruptors.
For more information please visit QIMAone.com