Skip to main content

Inspectorio on Supply Chain Digitization: ‘Change Is Not an Option’

To actually achieve its forthcoming sustainability goals, the industry needs both digitalization and cooperation, according to Inspectorio co-founder and managing director Fernando Moncayo.

In a one-on-one conversation with Sourcing Journal’s branded content manager Lauren Parker at the Sourcing Journal Fall Summit, Moncayo said that technology is no longer simply a nice to have for supply chain management but a necessity, adding that “digitization is a commodity already.”

When the software firm started out six years ago, it was focused on quality. Based on customer needs, it expanded its technology to compliance, sustainability and traceability. Today, Inspectorio has over 300 brand members and works with thousands of vendors and factories. The company’s goal is to become an “operating system” to provide companies with a single source of truth, replacing Excel spreadsheets and emails, which Moncayo said is “not sustainable.”

It’s not a question of whether brands adopt technology, but when, according to Moncayo. “Change is not an option,” he said. Making an analogy to an ironman, he compared quality, compliance, and sustainability and traceability to the three legs of the endurance race. Rather than a sprint, it’s about steady progress. “You need to go at your own pace,” he said. “It doesn’t matter where you start, but try to start training now.”

Related Stories

After implementing technology, Moncayo said the next phase is standardization, such as workflows and protocols. Many of Inspectorio’s early adopters have already undergone this process in recent years. Looking ahead, he has dubbed “collaboration” the keyword for the next few years. “We are a very selfish industry. We don’t want to share information, we don’t want to collaborate,” Moncayo said. “If we really want to achieve some of the different goals that we have for 2025, 2030…we need to collaborate.”

Supply chain tracing is a key concern, and one particular area that could use more visibility is the production chain. Moncayo pointed to a McKinsey study that found under 5 percent of companies can map their supply chain beyond Tier 3.

Moncayo compared the trajectory of supply chain visibility technology to that of maps. Paper maps morphed into MapQuest directions, and then mobile solutions like Waze took over. Unlike its predecessors, Waze is built on the concept of information sharing, leveraging data from other users to provide a real-time view of traffic and arrival times. “Everybody’s going to be learning; it’s going to be beneficial for us,” he said of instituting Waze-style models in supply chains. “Because if you don’t share that data, you’re not going to be able to get the data from others.”

Much like Waze can help drivers reach their destination faster, a shared data solution in fashion that leverages machine learning and algorithms can save companies time. It also alerts them to potential hiccups and provides data to make better decisions. Additionally, brands can identify which of their factories are the most and least risky, allowing them to strategize for auditing accordingly.  

Despite the negatives of the pandemic, one positive was placing supply chain executives on a different level, making them key figures in board rooms shaping the company’s future, Moncayo said.

Another aspect thrusting supply chains into the view of top leadership is compliance legislation. In addition to business to business (B2B) and business to consumer (B2C), companies now must consider business to government (B2G). This means realizing that the government is a client. “Believe it or not, we are a regulated industry now, and if we are not now, we are going to be in the following months or even following years,” he said. “If we don’t pay attention to that B2G, we don’t take the government as our now client…we’re going to have problems. So everything is changing and we need to innovate.”