The strategic importance of technology-enhanced testing, inspection, certification and compliance

Testing, inspection, certification and compliance (TIC) is a key component of nearly every supply chain across the globe. The COVID-19 pandemic highlighted that even urgently needed products such as hand sanitizer, masks, and vaccines must go through rigorous TIC before they can be released into the market. Leading brands such as ZARA, LVMH, Foxconn, Airbus or Dyson discovered that quick alternations of their supply and production lines need to be matched by similarly rapid approvals from authorities.

The pandemic also exposed the obsolescence and vulnerability of many existing TIC practices and the need for flexible, responsive, and reliable TIC throughout supply chains. Going forward, firms must continue to align their TIC practices, and those of their suppliers, with the level of digitalization, automation, and use of AI in the current business environment.

In our recent research published in Business Horizons we outlined a new paradigm for TIC grounded in the adoption of new technologies. As experiences with remote supplier audits have shown, the context-appropriate use of technology to support TIC is particularly critical. We argue that firms can leverage their competitive edge through TIC by taking four key actions.

Consider TIC as an integral part of firm strategy. Experiences worldwide during COVID-19 have highlighted that a firm’s ability to develop new products, deliver new services, alter production facilities, change suppliers, or enter new markets is often contingent on TIC. The pandemic also raised awareness on product safety and provenance to new heights, with consumers and regulators now more attuned to issues such as supply chain traceability, food security, environmental impacts, and product obsolescence. Firms must revisit their strategies in recognition of the centrality of TIC to modern business and society, as well as the new opportunities in TIC that are possible through new technological applications.
 
Align TIC strategies with resilience and digitalization efforts. The ability to absorb, recover from, and respond to shocks has taken on increased urgency, with many firms now painfully aware of the impacts of supply shortages, widespread employee illness, and other sudden disruptions. The need for flexibility in suppliers, production, and design modifications is now widely-appreciated, but the ability to make rapid changes in these areas is often grounded in a necessity for appropriate TIC practices. Digitalization provides an opportunity to automate and augment TIC-related processes. For example, implementing an internal document system could include developing an interface that allows an external auditor to remotely login into the system and audit a firm’s records and procedures.

Develop partnerships with TIC providers. Even in firms and supply chains with strong existing capabilities, the rapidly evolving nature of TIC means they may need to develop stronger partnerships with TIC providers. TIC providers often possess the ability to offer integrated services, which is valuable when firms must comply with a plethora of potentially overlapping environmental, health and safety, and other requirements. Certification to cutting-edge standards, such as Intertek’s new Prevent the Spread of Infection (POSI) certification, may provide an opportunity for strategic differentiation. TIC partners may be able to provide a secure environment for the exchange of sensitive data, as well as determining what technologies are appropriate to their unique context.

Develop TIC competence across the firm and supply chain. Firms must consider on-the-ground implementation of their TIC strategies. This requires building TIC practices internally and throughout supply chains. One notable possibility is identifying opportunities for remote supplier auditing, which has been widely adopted during the pandemic, and the technologies that enable it. This will require clear TIC plans supported by secure, readily-available, high-veracity data. It will also require addressing details such as how different technologies work together, supplier capacity and willingness to implement new practices, and how technology can inform auditors’ judgements.

TIC must no longer be viewed as a box to check, but rather as a key enabler of a firm’s ability to participate and thrive in a competitive international marketplace. The COVID-19 pandemic catalyzed the implementation of TIC practices throughout supply chains grounded in new technological applications. However, the implementation of these practices was often done in a reactionary, ad hoc fashion and more is needed strategically apply TIC going forward. The paradigm shift to a greater reliance on technology in supply chain TIC is driven by multiple forces, each of which comes with both challenges and opportunities in potentially radically altering its practice.

About the authors
Cory Searcy is Professor of Industrial Engineering and Environmental Applied Science & Management at Ryerson University in Canada. His research focuses on sustainable supply chains, performance measurement, and auditing. He is currently serving as the Vice-Provost and Dean of graduate studies at Ryerson. He holds a PhD from the University of Alberta and can be reached at [email protected].

Pavel Castka is Professor of Operations Management & Sustainability at the University of Canterbury in New Zealand. His research focuses on the interplay between standardization, innovation, and sustainability. He has served on the New Zealand Committee of ISO TC 176 since 2006. He holds a PhD from Brno University of Technology, the Czech Republic. He can be reached at [email protected].

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