Qima reveals quarterly sourcing trends
Hong Kong-headquartered supply chain compliance specialist Qima has released its most recent quarterly synopsis of global supply chains’ quality, compliance and trade trends, a report it has been publishing every three months since 2012.
Notably, following six consecutive months of what Qima described as a deterioration in ethical compliance, the company’s auditors recorded a 5% increase in factories’ ethical scores during the third quarter (Q3), in comparison to the previous three-month period. It cautioned against premature optimism, however, as its data would suggest that the number of “critically non-compliant” factories has increased by 10% since 2019.
Buyers’ inspection and audit requests of Indian suppliers rose by 78% quarter over quarter in Q3, suggesting a surge in demand after the country suffered significantly from the negative effects of covid-19 earlier in the year. Qima said demand was particularly strong among US-based buyers.
Meanwhile, demand for audits and inspections also increased in Bangladesh. Compared to the corresponding month of 2019, Qima noted that orders for its services from US-based brands were boosted by 88% in August and up 108% in September.
Demand for Qima’s auditing and inspection offer surged by 67% in India during Q3, compared to the same period in 2019 (pre-covid-19), as well as by 49% in Bangladesh for the same comparative period.
Further highlights from the report included how power cuts in China during September slowed down production there for a period. Interestingly, however, there were also some year-on-year increases in US-based clients’ orders of Qima’s inspection services in China towards the end of the quarter (up 5.5%), plus a 4% uptick in demand from buyers located in the European Union.
For the rest of Asia, excluding China, the percentage of postponed Qima orders doubled in September compared to May and June levels, it said, underscoring the difficulties brands and their suppliers have been facing with maintaining orders’ schedules as a result of regional lockdowns and logistical delays.
Vietnam fared the worst, due to a surge in cases of the covid-19 Delta variant during the quarter. Buyers’ demand for Qima’s services there was down 5.5%, 45% and 52% in July, August and September, respectively, year on year.
The company’s quarterly data suggested that neighbouring Cambodia, in particular, reaped the benefits of Vietnam’s supply woes, with Q3 demand for its auditing and inspection services rising by 34% on 2019’s comparative figures. (Cambodia has a higher average covid-19 vaccination rate than Vietnam, Qima said.)
