The higher e-commerce usage rises, the lower consumer tolerances fall.
Fashion shoppers have the world at their fingertips, and when they do order something, they expect it to arrive quickly and in perfect condition. Tolerance level for poor quality: Zero.
The “Quality at a Crossroads,” panel explored how brands must apply this same zero-tolerance attitude to their own suppliers to achieve “zero defect” in merchandise. The answer comes in digitalizing operations up the supply chain, which helps brands and retailers proactively catch and course correct problems early on, instead of reactively discovering faulty merchandise at the finish line.
Panelists included: Guido Schlossmann, group chief executive officer and president, Synergies Worldwide; Lukasz Pólchlopek, director, Europe, Qima; and Anil Mishra, country manager, Asmara-Vietnam. The panel was moderated by Edward Hertzman, president and Founder of Sourcing Journal, and executive vice president of Fairchild Media Group.
Quality issues are nothing new, but they are now heightened. In Qima’s survey of more than 700 brands around the world regarding communication and quality issues pre-pandemic, Pólchlopek noted 59 percent of the clients said they had some serious communication issues with their supplier, but whereas they would normally go to the factory to discuss quality requirements, the pandemic put a halt to that. Meanwhile, 41 percent of their suppliers reported quality issues were increasing versus previous years, and suppliers with a low digitalized supply chain were reporting twice as many issues than ones working with some digital platforms.
“With digitalized platforms, you have an overview of the whole supply chain, not only a particular part of it,” Pólchlopek said. “[Plus], the information is not scattered among different people involved in the quality process within the company or with partners you’re using to supervise the process.”
Getting real-time visibility into quality issues is especially important today, as brands and retailers are reevaluating their suppliers in the wake of the pandemic. They might switch to less costly factories in the same region, shift to a new country altogether, or renegotiate terms with existing partners — all options that have quality implications.
“If you stick with your existing supplier but negotiate lower prices, you leave him hardly any margin,” said Scholossmann of Synergies Worldwide. “So, if he’s not a strategic supplier, he might try to shortcut on fabric, subcontract or use fewer people on the finishing floor. A lot of different quality issues can arise, so you must either have a physical presence or [digital] visibility into what’s really going on.”
He also advised brands not to focus only on their manufacturers for quality, but to look into second- and third-tier suppliers, as many issues are related back to dyes, fabrics and accessories.
At the end of the day, fashion brands and retailers bear the brunt of the blame for subpar merchandise, resulting in high return rates and customer complaints, the latter a potential death knell in today’s age of social media.
“A Qualtrics survey found that 93 percent of the customers are reading reviews before buying, with four out of five not buying a product if they see a negative review,” says Pólchlopek. “That’s why the zero-defect policy is very important.”
The COVID-19 pandemic put a halt on company travel and factory visits, and it’s not clear if companies will ever return to former visitation levels. For things that can’t be digitalized, like the hand-feel of a fabric or the puffiness of a down jacket, brands and retailers need to empower suppliers to take ownership of quality.
“There is a deeper need for further empowering suppliers and making real meaningful partnerships,” says Mishra, of Asmara-Vietnam. “And platforms like API’s [application programming interface] and SaaS applications [web-based software] remove physical barriers and help our factories with accurate decision-making.”
It also helps discover issues earlier. “Product conformity comes from the initial stage of product development. You don’t want to wait for the goods to be finished to find out what’s right or wrong with them.” When it comes to analyzing the performance of their suppliers, brands have two choices: AQL (acceptable quality limit) sampling or 100 percent inspection.
“Regardless of your method, you should not only track failure rate, but go deeper into particular points,” says Pólchlopek. “In addition to visual defects, you should benchmark and compare the suppliers among themselves. Maybe there are solutions you can cut and paste for another factory.”