Supply Chain Transparency Helps Businesses Grow

Quality control in manufacturing is not a new process. You can trace its roots all the way back to the Middle Ages when guilds incorporated training and enforced high standards on apprentices. Aspiring craftsmen would train in these establishments to hone their skills and become experts in their craft. To be considered masters of their specialties, they had to prove that they could create a masterpiece that showcased their knowledge and experience to produce a high-quality product. 

At the start of the industrial revolution, manufacturers started to focus more heavily on the number of goods produced, rather than the quality. Priorities began to change from quantity to quality when the demand for better goods started to increase. Manufacturers started realizing that they needed to work smarter and apply ways to control quality to improve their bottom lines.

In the ’80s and ’90s, many super large organizations had reached their peak. The market became flooded with entrepreneurs and small businesses looking to replicate the success of the large corporations without the resources of an integrated supply chain. 

supply chain transparency stats about supply chain outsourcing

In recent decades, quality control has become a crucial aspect of manufacturing. Regulatory bodies, internal auditing consultants, and external inspection services are cropping up globally, helping meet new customer demands for supply chain transparency and assurances of sustainability.

Tetra Inspections is just one of the companies doing this, but founder Mohamad Afali is building a reliable and innovative service to help you ensure quality in manufacturing across 25 countries. Tetra Inspections has a range of inspectors working on the ground internationally to ensure your manufacturing contracts are being followed to the highest standards.

Supply Chain Transparency Has Become a Necessity

Consumers have more access to information and brand options than ever before. And as consumers are getting more educated, there is an increasing desire for knowledge that helps them make good purchase decisions. Some consumer concerns include; 

  • Sourcing of raw materials and chemical processing 
  • Product quality & safety standards
  • Sustainability & Environmental protection
  • Manufacturing costs and ethical treatment of employees

And the desire for supply chain transparency isn’t being driven by consumers alone. Governments, NGOs, and company stakeholders are starting to increase pressure and implement regulations that make monitoring the entirety of your supply chain a growing necessity.

Understanding Supply Chain Outsourcing

In 2021, the highest areas for outsourcing in the supply chain were; distribution & logistics (at 42%), manufacturing (at 37%), finishings (at 29%), and packaging (at 23%). 

Why do companies outsource their supply chains? From a small business or startup perspective, it is so much more cost-effective to have someone else make and ship your product to the end-user. But not all product designers and marketers who have good product ideas understand the regulatory and lab testing requirements for the countries where they want to manufacture. 

But outside of this seller/producer outsourcing of the supply chain, your production company can further sub-contract your manufacturing work to other companies to save costs or meet tight production timelines. Tetra Inspections track the location of their inspectors when they do quality checks, so you can see every facility where your goods are being manufactured, stored, or packaged. 

supply chain transparency and inspection service, tetra inspection coverage map
Tetra Inspection Coverage Map

Based on Tetra Inspection’s data, more than 37% of suppliers visited under their inspection services were subcontracting production or some steps of production to other factories without sharing that information with the client. Tetra is looking to increase end customer trust and manufacturing trust through sharing GPS data of inspection tours. 

Mohamed shares “Since we started our Journey in 2019, our inspectors travelled more than 600,000 Km to help our clients secure their goods manufactured in Asia and make the products consumed in Canada, USA, EU… safe for the final customer. 600,000 KM is the equivalent of 15 times the circumference of the Globe”.

Building a More Ethical Supply Chain

Consumers care more about where their products come from, and businesses are starting to listen. A 2018 study showed that businesses that make specific sustainability claims and give customers access to data grew twice as fast as companies that made unclear sustainability claims. 

how to perform an ethical audit in supply chain

With the rise of certifications like B Corp, having a trusted manufacturing inspection service that can provide you with social and ethical audits is essential. Tetra Inspections has 6 main pillars to their ethical audits; observation & documentation compliance, health & safety & hygiene, waste management, child labour, hours & wages & benefits, and labour practices.

Post-Pandemic Supply Chain Trends

Many companies and most consumers experienced supply chain disruptions in the early days of COVID, and many are still recovering from production and shipping bottlenecks caused by reduced capacity in workspaces and increased safety protocols. But, these disruptions left many companies evaluating their supply chain for ways to avoid future disruptions. 

Companies are looking at a number of ways to fight these disruptions, including branching out from countries historically known for their cheap manufacturing, creating short-term demand-supply synchronization strategies, and adopting technologies that allow for more transparency at all levels of the supply chain. If you’re looking for new suppliers,  Tetra Inspections has auditors in over 25 countries. 

As shipping costs continue to increase, it has also become comparable to manufacturing goods locally. Mohammed says, “the costs of a 40-ft container have increased 7 to 10 times since the start of the pandemic, and the customer is starting to see the higher prices. Because these shipping costs are getting so high, it is sometimes cheaper to pay for the more expensive labour for smaller consumer goods to be produced more locally. The pandemic helped us expand our network. 

There are some limitations to re-shoring production. Because we haven’t done the work here, generations lose their abilities. Small brands that do well, producing locally make sense.”

Growing Your Start-up in North America

Tetra Inspections moved to Canada in December 2021, and his experience was relatively straightforward. Prepared with the right information through our pre-acceleration program, Mohamed had already set up his banking and business structure before he arrived.

His biggest challenge adjusting to the North American market? Adapting his sales and marketing approach. Mohamed comments “TBDC has been always very supportive, they provided a lot of mentorship, coaching on all business fronts, we followed their recommendations for lawyers, accounting firms, software’s, and received introduction to angel investors. One of the great things TBDC has done is they made us aware about all grants and credits offered by the Government.”

Are you part of an international start-up looking to expand into the North American Market? Toronto Business Development Centre (TBDC), is Toronto’s original business incubator, with an offering specifically designed to help established businesses reach their potential in the western hemisphere. Want to see if your start-up is ready? Book a call today!

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