How Retailers Detect and Correct Problems in Supply Chain Quality

By Fred Isenberg, vice president of New Generation Computing (NGC)

Ensuring supply chain quality is more critical and complex than ever in today's era of global sourcing. Retailers face increasing difficulty in managing the quality and safety of their goods at overseas factories, as evidenced by continuing news stories about sub-standard quality imports.

For example, last summer a leading footwear retailer recalled 700,000 pairs of children's clog shoes due to choking hazards. Another well-known retailer recalled girls' clothing sets because they posed an entrapment hazard.

Speed to market without the right quality standards can have devastating results. For retailers, this means empty shelves and lost profits when merchandise is rejected. Substandard products can also permanently damage a company's reputation and brand, leading to consumer defections.

In the past, retailers had enough time in their supply chain schedules to detect and correct quality problems at the Distribution Center. However, this is no longer possible due to shorter selling seasons and compressed product lifecycles. As a result, quality management must be pushed as far back in the supply chain as possible and onto the factory floor. Quality control needs to be an integral part of a retailer's global sourcing operations, starting with the IT solution.

Global sourcing software, which is increasingly used by retailers and vendors to manage production at remote factories has traditionally focused on improving speed to market and visibility. However, today's best-in-class global sourcing solutions should help companies proactively measure and manage quality as well.

These new systems are Web-based, allowing brands, retailers, factories and agents access to real-time information. The software can be utilized for quality audits at factories around the world, following user-defined sampling rules, inspection points and defect codes. The system automatically generates alerts in the event of a failure, allowing manufacturing defects such as poor fabric quality, wrong specs, dirty garments and packing errors, to quickly be resolved, for significant savings in time and money.

The systems can incorporate a vendor's quality level into the vendor score card index, an important mechanism for determining which suppliers to select. By analyzing quality performance and examining trends, companies can decide how to best allocate inspectors around the world, choosing to concentrate on the facilities that require the most attention.

The best quality control applications should be:

- Web-based. The ability to capture and view quality data online is essential for brands, retailers, factories and agents. With access to real-time information, problems that might have gone undetected for days or even weeks can quickly be corrected at the factory level.

- Designed to ensure accountability. When factories understand that you are monitoring and managing quality, their performance improves. Information on a factory's reliability, overall performance, and ability to meet timelines and specs can be accessed throughout the supply chain, making factories much more accountable.
- Flexible. Quality systems should support a wide variety of quality audits, with user-defined AQL (Acceptable Quality Level) tables and inspection points, and a full range of reporting and statistical analysis capabilities.
- Easy to implement and use. When tightly coupled with global sourcing software, quality management solutions can become as ubiquitous as the sourcing solutions that retailers and brands and retailers rely upon. Quality systems should be easy to use, enabling widespread adoption at the factory level and throughout the supply chain.

In order to be effective, quality management systems must be implemented as part of an overall strategy that includes ongoing training and education and mandatory participation. Make it clear that using the system is not optional, but a requirement for doing business with your company.

Fred Isenberg is vice president of New Generation Computing (NGC). NGC is a wholly owned subsidiary of American Software. For more information, visit