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Taking Supply Chain Management from Reactive to Proactive with Digitalization and Data
SJ Studio
4 min read
Sourcing diversification has become a common tactic in the apparel and footwear industry to guard against disruptions. However, spreading manufacturing across the globe and among numerous suppliers opens the door to new risks, especially as companies enter new regions or work with new partners. A more spread out vendor base also creates more complexities for supply chain management.
At the same time, how effectively companies execute on product quality and compliance impacts their brand reputations and bottom lines. Ensuring consistency with these standards across a complex web of suppliers can be resource and labor intensive, as companies conduct routine audits to weed out any issues as they happen. Digitalization offers a path toward more efficient processes, enabling brands to shift from reactive quality and compliance checks to proactive management of risks.
Supply chain management software firm Inspectorio’s artificial intelligence-powered software is designed to provide a centralized, comprehensive view of operations, allowing companies to safeguard quality and maintain compliance. This multi-tier visibility also unlocks opportunities to pivot to different suppliers or regions when needed and collaborate with the entire value chain to improve performance.
“When supply chain participants are siloed—which has traditionally been the case—it’s difficult for companies to see what other players are doing,” said Chirag Patel, CEO of Inspectorio. “This leads to inefficiencies, duplicated efforts and inaccurate reporting. In contrast, Inspectorio uses AI to give our customers instant access to insights about their supply chain performance. This end-to-end visibility unlocks new potential for optimization, cost savings, quality improvement and risk mitigation.”
Managing compliance has become more challenging as firms face escalating regulatory requirements. Some of these regulations mandate adherence to standards set by laws on areas like environmental impact, workplace safety or wages. An example is the Uyghur Forced Labor Prevention Act (UFLPA) in the U.S., which prohibits goods sourced from the Xinjiang Uyghur Autonomous Region in China. Others set an expectation that companies proactively prevent social and environmental harm, such as the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD). Still others, such as the EU’s Corporate Sustainability Reporting Directive, require companies to track and disclose certain information from across their internal operations and their entire value chain. In addition to legislation, consumers increasingly expect companies to uphold and communicate about ethical practices.
Quality control is always critical, but it is especially important amid the rise of e-commerce. If in-store shoppers find an item with a defect or sizing issue, they might be able to find another of the same SKU on the rack. But with e-commerce, merchants have one shot to get it right, or buyers will return the merchandise and might not repurchase the same item.
Inspectorio’s Quality Risk Management (QRM) and Responsible Sourcing and Compliance (RSC) solutions use digitalization to make quality audit processes more efficient and standardized. The software automates tasks like reporting, improves access to supplier data, and streamlines communication between parties, enabling brands to make more informed decisions. AI-powered analytics help identify performance trends and can even predict quality issues before they happen. Inspectorio refers to this as establishing a “zero-defect culture.”
“One of the biggest gains from using the Inspectorio platform is the ability to identify trends with respect to our factories, allowing us to be more proactive than reactive to issues,” said Rory Geiger, director of global quality and compliance at Vera Bradley.
While Inspectorio helps identify risk hotspots, its solutions also empower suppliers that have proven trustworthy. On the compliance side, this enables brands to customize auditing plans based on past performance, reducing audit fatigue. For quality assurance, lower-risk partners can use modules in the software to conduct self-assessments, allowing brands to focus their spending on third-party quality audits for riskier suppliers.
To boost insights, Inspectorio developed business intelligence dashboards that allow teams to customize and configure a data platform for their needs. Designed to require no coding or IT support, workers can drag and drop modules to display the insights most important to them. The intent is to turn data into a strategic advantage, enabling teams to easily see top-level overviews as well as granular, actionable insights. For example, companies could compare their average inspection fail rates between factories and use that to inform corrective measures or order allocation. As data needs evolve, the dashboard’s flexibility allows for scaling.
In the Inspectorio State of Supply Chain Report 2024, 82 percent of industry respondents said that technology will significantly impact supply chain management in the next five years. Despite recognizing technology’s potential, AI adoption is still lagging, with just 24 percent currently using AI capabilities in their supply chains. This leaves room for growth, and Inspectorio is ahead of the curve.
“Recent digitalization across the industry has laid the groundwork for customers to fully harness AI,” said Patel. “We help customers tap into the wealth of supply chain data, allowing them to better assess risk, take proactive measures, and optimize before issues arise, ultimately improving performance of their supply chain. We continue to invest in our leading AI capabilities and in R&D, reinforcing our vision of a dynamic—rather than one-size-fits-all—approach to risk, prediction, and collaboration across the supply chain, all driven by data.”
