Toray Group Distribution Initiatives

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 2016, distribution managers from 67 distribution partner companies and 23 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 CO<sub>2</sub> emissions per unit of sales from distribution activities (year-on-year)

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 2015, CO2 emissions from transport stood at 29,400 tons, down 2% year-on-year due to progress at Toray on its modal shift. CO2 emissions per unit of net sales were down by one percent year-on-year, due to ongoing distribution improvements. This enabled Toray to meet its mandate as a specified consigner to reduce energy consumption per unit of net sales, by an average of at least one percent every year over the medium and long term.
Improvements through distribution policies are shared across the Toray Group (in Japan), CO2 emissions at specified consigners Toray, Toray Advanced Film Co., Ltd., and Toray Ace Co., Ltd. are tracked using the Toray Group distribution platform, and steps are taken to reduce emissions per unit of net sales.

CO2 Emissions Resulting from Distribution Activities (Toray)

CO<sub>2</sub> Emissions Resulting from Distribution Activities (Toray)

  1. 1 CO2 emissions at the transport stage divided by sales on a per unit basis

Switching to Small Cargo Ships for More Eco-Friendly Transport

Toray’s Ehime Plant used to carry synthetic fiber exports to Osaka-Kobe International Port by round road trip, which meant a truck with an empty container traveling from the port to be filled at the plant and then sent back to the port. The plant has started using marine transport by non-international coastal vessel for domestic transport from Matsuyama Port, the closest port to the plant, to Osaka-Kobe International Port. These ships have a lower environmental impact than the previous system, and the plant has succeeded in reducing CO2 emissions by 33.7 tons per year.

Switching to Small Cargo Ships for More Eco-Friendly Transport

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’s System for Reusing Shipping Materials

Toray Group’s Bulletin Board System for Sharing Surplus Shipping Materials

Toray Group’s Bulletin Board System for Sharing Surplus Shipping Materials

Eco Rail Mark Acquisition

In March 2011, Toray was 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 TETORON™ polyester fiber.
In fiscal 2015, Toray’s modal shift rate rose to 33.6%. Although marine shipping fell 0.6 percentage points due to an increase in frequent transport, railway usage rose 0.8 percentage points due to an aggressive move by Toray to switch to this mode of transport. The Company will continue to actively explore means of further promoting a modal shift.

Breakdown of Toray’s Transport Usage and Modal Shift Rate (Toray)

Breakdown of Toray’s Transport Usage and Modal Shift Rate (Toray)

Promoting a Modal Shift

Promoting a Modal Shift

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 2015, the Toray Group distribution company Toyo Logistic Service Co., Ltd. took steps to further enhance the quality of services. These measures resulted in a 31% year-on-year reduction of incidents involving Toray products, including damage during transport and storage, a significant contribution to the Toray Group.
Toray will continue to work with its partners to improve distribution quality.

  1. 2 Distribution-partner companies receiving awards in fiscal 2015 (alphabetical order): Ajinomoto Logistics Corporation, Chigusa Kosan Co., Ltd., Daisei Warehousing & Transportation Co., Ltd., Fuji Logitech Holdings, Inc., Hamakyorex Co., Ltd., Meiko Trans Co., Ltd., Nagahama Reizo Co., Ltd., Shikoku Meitetsu Transport Co., Ltd., Touto Transport Co., Ltd., Toyo Logistic Service Co., Ltd.

VOICEMessage from a Safety Manager

Mikihito Ikeda

Workplace-Driven Activities Significantly Improve Distribution Quality

Improving the quality of the distribution process is an issue of critical importance to us. In fiscal 2015, each office set its own goals and worked on autonomous activities in addition to activities designated by the head office. Some offices focused, for example, on managing product handling information using visual controls; others held regular safety meetings with subcontractors or worked to identify problems and issues by analyzing case studies of previous incidents. Offices also conducted multiple reviews on handling methods tailored to each product.
The number of incidents in fiscal 2015 was reduced by a significant 31% over the previous year thanks to these activities. We will continue to focus on improvements in order to achieve further reductions.

Mikihito Ikeda
Manager, Environment & Safety Department, Toyo Logistic Service Co., Ltd.

Distribution Incidents

Distribution Incidents

Incidents during fixed route transport, caused primarily by changes in the distribution environment, increased by eight over the previous fiscal year.

Using Digital Tachographs to Improve Driving Safety

Toray is encouraging its distribution partners to deploy digital tachographs, which record and output vehicle operation data, in their vehicles, to enhance safety and realize better fuel economy. Companies use the driving data they collect from digital tachographs to advise their drivers on how to drive more safely, improve their driving technique, and be more conscious of safety. The data also helps to prevent dangerous driving and reduce accidents, and is used to promote fuel-efficient driving practices.

Yellow Card Emergency Response Measures

Drivers of shipping vehicles carry a yellow card3 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.

  1. 3 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)4 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)5 status.

  1. 4 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.
  2. 5 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.