SC Visibility - Rapidly Evolving Scope: Part I

Supply Chain Visibility now extends to the Manufacturing Process

For a long time supply chain visibility was all about tracking the physical location of goods and products through the physical supply chain.

• From the late nineties, we could see growing emphasis on increasing visibility into the regulatory compliance by outsourced vendors, in terms of not bending labor laws or worker safety laws a la the sweat shops
• Over the last few years, we saw a growing emphasis on visibility into the financial side of the supply chain
• Today, we’re starting to see the need to increase visibility into the actual manufacturing process at the outsourced vendor’s end, with reference to compliance with quality standards.
  

Compliance with Quality standards has become a rising concern as it is becoming evident that a lot of the outsourced manufacturing has been focused on cutting costs at the expense of monitoring of the quality standards.

Manufacturers and global trading houses are now taking compliance with quality standards very seriously due to various factors:

• Consumers will not buy unsafe goods, even if substantially cheaper
  
• Recall of unsafe goods erodes the brand, costing not just the physical cost of the recall, but also loss of reputation, lowered credibility, lowered profitability and sharp dips in share prices
• Recent legislations make the cost of non-compliance prohibitive. For example non-compliance with Material Composition norms prescribed under RoHS could attract a penalty - in Ireland - of a maximum of 15 million Euros, imprisonment of up to 10 years, in addition to recall and prohibition of the violating goods!

To be continued.
Part II of this post will appear in December 2007.