Target announced Tuesday that it will conduct factory inspections in a new way—one that allows for more speed, better quality and greater transparency. The retailer has teamed up with technology start-up Inspectorio, which will roll out its quality control and supplier compliance verification platform to 50 of Target’s vendors across Vietnam, Cambodia and Thailand. The implementation will encompass more than 100 factories and nearly a quarter of Target’s apparel and accessories business.
“We think Inspectorio’s platform brings an innovative technology solution to a process that has traditionally been manual,” said Irene Quarshie, Target’s vice president of product quality and responsible sourcing. “Additionally, we think this work is bigger than inspections: It’s about unlocking the ability for real-time transparency and real-time decision making within Target’s supply chain.”
By automating the process, Inspectorio promises to sidestep the unnecessary delays that often plague the inspection process. On the other hand, the current system, which requires factories and retailers to manually transcribe notes and communicate via a slew of back-and-forth emails, only serves to undermine speed to market efforts.
It’s costly, and it requires a lot of time,” said Inspectorio CEO Carlos Moncayo, regarding the industry’s current inspection process. “Based on the data that we have seen, we can shorten the time by 50 percent. The normal time that it would take for an inspection report to be generated, a corrective action plan to be triggered and then the communication back and forth to get an action plan on average would take six to seven days. With our system, in worst case it would be down to three days.”
Beyond speed, Inspectorio promises transparency, allowing retailers like Target to have an accurate accounting of inspections as they’re taking place. Quarshie believes Inspectorio “will help us greatly improve the consistency and quality of the products we offer, making it really clear where and how they’re made—that’s something guests care a lot about and have come to expect from Target.”
Quarshie added, using this new tool furthers the retailer’s commitment to responsible sourcing and products. Target has joined a growing list of retailers that publish the standards for its vendors and suppliers as well as a list of the factories it works with around the world.
On the quality front, Moncayo said the Inspectorio platform will help Target not only identify issues as they occur, but allow the retailer to diagnose the cause so the same problems don’t continue to plague the supply chain.
Moncayo sees this as a key benefit of his software since too often when issues arise they’re addressed but only at the symptom level, never getting to the cause, which leads to repeated problems.
The relationship between Target and Inspectorio began when the three brothers who founded the company, Carlos, plus Fernando as chief of sales and marketing and Luis as chief of operations, applied to the inaugural Target + Techstars Retail Accelerator program.
The trio, who knew the pain points associated with production firsthand, had launched, an apparel sourcing firm in 2003, which provided managed sourcing solutions across Asia. “Through that company, we learned the challenges of managing quality control in multiple locations,” Moncayo said, adding the search for a technological solution began there.
Inspectorio was based in Minneapolis for three months as a part of the Target program and then was selected for a six-month pilot and ultimately received $3.7 million in funding from the retailer. While the brothers knew sourcing, the exposure gave them a new perspective on large-scale operations. “It’s been a mutually beneficial relationship, where we both learned a lot,” Moncayo said.
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