Facilitating CSR Initiatives Throughout the Supply ChainToray Group Distribution Initiatives
Basic Distribution Policy Briefing
Toray holds annual Basic Distribution Policy Briefings as part of its ongoing effort to improve quality and reduce the environmental impact of its distribution process. In 2017, distribution managers from 65 distribution partner companies and 17 Toray Group companies in Japan participated in briefings to promote understanding of Toray distribution policies and improve distribution performance.
Reducing the Environmental Impact of Distribution
Reduction in CO2 emissions per unit of sales from distribution activities (year-on-year)
Reporting scope: Toray
Fiscal 2016 target:
Toray is endeavoring to reduce CO2 emissions in transport. These initiatives include reducing transport distances by reexamining inventory points and making use of regional ports, and shifting modes of transport by migrating to rail transport, which has less impact on the environment.
In fiscal 2016, CO2 emissions from transport were 29,600 tons, up 251 tons (0.9%) year-on-year. Although emissions decreased by 522 tons, or 1.7% year-on-year, thanks to implementation of modal shift, increased loading rates and reducing inefficient transport, overall emissions were higher due to increased truck transport to adjust for transport distances and decreased load efficiencies caused by an increase in high-frequency deliveries.
Energy consumption per unit of net sales increased by 4% year-on-year, due to the abovementioned reasons and lower net sales. Despite this increase, over the last 10 years, Toray's energy consumption per unit of net sales is down by more than 24%. As a result, Toray is meeting its legal mandate as a specified consigner to reduce energy consumption intensity by an average of at least 1% every year over the medium- and long-term.
Toray will continue to seek CO2 emissions reductions by pursuing environmentally responsible distribution. Additionally, the Company will leverage its group-wide distribution platform to track CO2 emissions and share distribution strategies in a further effort to reduce CO2 emissions.
CO2 Emissions Resulting from Distribution Activities (Toray)
- 1 CO2 emissions at the transport stage divided by sales on a per unit basis
Promoting Environmentally Responsible Distribution by Increasing Loads
The Toray Group is reducing CO2 emissions by increasing load efficiencies and increasing load volumes.
Toray's Nagoya Plant reduced 44 tons of CO2 emissions annually by increasing loads on dedicated trucks used to deliver chemicals to customers and between plants, effectively reducing the overall number of trips.
- ISO-specification tank container and transport chassis
Expanding Collection and Reuse of Packaging Materials
The Toray Group is establishing a global framework to collect and recycle packaging and shipping materials that are included with products used by customers. Group companies in Japan use an internal bulletin board to inform other companies if they have surplus packaging and shipping materials available for reuse.
- Toray's System for Reusing Shipping Materials
- Toray Group's Bulletin Board System for Sharing Surplus Shipping Materials
Promoting a Modal Shift
Percentage of modal shift to sea or rail for transport across distances for 500 km or more
Reporting scope: Toray
Fiscal 2016 target:
The modal shift to sea or rail for transport in 2016 was 32.1%, down 1.5 percentage points year-on-year. Although the amount of truck transport used stayed even year-on-year, the amount of sea transport declined year-on-year due to changes to transport destinations.
Toray's modal shift target was 40% for fiscal 2016. Despite making an active effort to switch to rail and sea transport, the Company fell short of the target, because of changes in transport regions, an increase in high-frequency deliveries, and changes in logistics conditions.
Toray will continue working to achieve a modal shift target of 40% by pursuing modal shifts in product and materials transport, and by working more closely with distribution partners. Through these efforts, Toray will promote environmentally responsible distribution while taking into consideration the environmental impact of the distribution process.
Modal Shift to Sea or Rail for Transport (Toray)
Eco Rail Mark Acquisition
Toray has certified as an Eco Rail Mark Company by Japan's Ministry of Land, Infrastructure, Transport and Tourism and the Railway Freight Association. This recognizes Toray's active efforts to use rail freight transport, a relatively environmentally friendly means of transportation. The Company also obtained Eco Rail Mark Product certification for its TORAY TETORONTM polyester fiber.
In fiscal 2016, Toray acquired Eco Rail Mark Product certification for TORAYCONTM polybutylene terephthalate (PBT) resin, as a result of switching to rail transport.
Initiatives to Improve Safety and Quality in Distribution
Toray is working on a project to improve transport quality. The project involves sharing accident analysis data, distribution quality enhancement reports, and distribution accident hazard prediction training. Partners that make outstanding contributions to improving quality are recognized through annual awards.2 These initiatives are aimed at reducing the number of problems such as those involving breakage, and reducing transport delays and incorrect shipments of Toray products. Toray works with distribution partners to improve distribution quality and safety and to reduce the incidence of problems by conducting on-site inspections and holding quality control meetings with partners.
In fiscal 2016, business partner Chuo Warehouse Co., Ltd. implemented further initiatives to improve quality. These efforts enabled the company to reduce the percentage of incidents (including transport- and storage-related) damage involving Toray products by 25% year-on-year. This had a significant impact on improving quality.
Toray will continue working with partner companies to improve distribution quality.
- 2 Distribution-partner companies receiving awards in fiscal 2016 (alphabetical order): Ajinomoto Logistics Corporation, Chuo Warehouse Co., Ltd., Daiichi Storehouse & Refrigeration Co., Ltd., Daisei Warehousing & Transportation Co., Ltd., Ichimiya Logistics Co., Ltd., Masuda Transportation Co., Ltd., Nagahama Reizo Co., Ltd., Toyo Logistic Service Co., Ltd., Toyotsu Logistics Service Co., Ltd., Yamada Unso Co., Ltd.
VOICEMessage from a Distribution Partner
A quality improvement team at the Saitama Sales Office
Distribution incidents cut by team quality improvement activities
General Manager, Tokyo Branch, Chuo Warehouse Co., Ltd.
Chuo Warehouse Co., Ltd. operates 57 teams that pursue quality improvement activities throughout the company. In terms of distribution, these activities mainly focus on reducing incidents in warehouses and transport by discussing and implementing site-level improvements. Every six months, the teams report on their activities and the company gives awards of excellence. These teams have measurably improved our distribution quality, resulting in a steady decline in the number of incidents, company-wide.
In particular, we have seen a significant reduction in incidents thanks to improved packaging for products from the Tsuchiura Plant and thoroughly protecting them during loading. At each branch, we have sought to do more transport with our own vehicles, and we visit our business partners to discuss improvements. As a result, we achieved a 25% reduction in incidents involving Toray products in fiscal 2016. We will continue working to resolve issues via these quality improvement activities so that we can provide safe, high-quality distribution services.
Shipments of resin products, which account for 60 to 70% of all incidents, increased by 10% year-on-year. Consequently, the overall number of incidents increased by 2% year-on-year, up 16 incidents.
Recommending that Distribution Partners Acquire Third Party Certification
Toray recommends that its distribution partner acquire external certifications such as ISO 9001, ISO 14001, Green Management Certification,3 and G Mark.4 These certifications require companies to achieve legal compliance, improve quality, and practice environmental conservation in distribution processes. Toray also pursues CSR initiatives in collaboration with distribution partners.
- 3 Green Management Certification is awarded to companies that demonstrate a certain level of environmental improvement activities based on a manual for implementing green management (business management with a low environmental impact).
- 4 The G Mark is awarded to companies that meet certain criteria and demonstrate excellent safety, based on an assessment of proactive initiatives for legal compliance and safety.
Yellow Card Emergency Response Measures
Drivers of shipping vehicles carry a yellow card5 detailing emergency measures to be taken to minimize damage in the event of an accident. Toray has also established an emergency communication system and carries out emergency training. In the unlikely event of such an accident, Toray has procedures in place enabling the necessary staff to be dispatched as swiftly as possible to the accident site for assistance.
- 5 Cards summarizing the names of any hazardous substances, applicable laws and regulations, hazardous properties, emergency accident procedures, emergency reporting and contact information, methods for minimizing the spread of damage, and other accident response information.
Initiatives to Prevent Overloading
The overloading of trucks causes vibration, noise, damage to roads and facilities, and also creates driving hazards. Consequently, Toray is putting considerable effort into the prevention of overloading.
Compliance and Security Measures for Importing and Exporting
As a measure to ensure the legality and safety of imports and exports as part of Toray Group's expanding global operations, a US subsidiary of Toray International, Inc. enrolled in the Customs-Trade Partnership Against Terrorism (C-TPAT)6 with the aim of strengthening global supply chain compliance. In order to realize more efficient imports and exports of materials and to strengthen supply chain compliance and security measures, Toray is also encouraging its worldwide distribution partners to obtain Authorized Economic Operator (AEO)7 status.
- 6 A voluntary program introduced by United States Customs and Border Protection in November 2004. The aim of the program is ensure and strengthen security through the global supply chain, based on international cooperation with private operators importing goods into the US.
- 7 A status implemented by the EU in December 2006 that gives priority in customs procedures to importers and exporters with a high level of compliance for cargo security. The Japanese Customs Act was also revised in 2007, and a similar qualification system was established to provide priority in customs procedures to highly compliant operators.