CSR Activity Report (CSR Guideline Activity Reports) - Establishing Sustainable Supply Chain
Toray Group Distribution Initiatives
Working Together with Business Partners
Holding Basic Distribution Policy Briefings
Basic Distribution Policy Briefing (fiscal 2022)
Toray Industries, Inc. promotes understanding of Toray Group’s distribution policies and works to improve distribution performance with annual Basic Distribution Policy Briefings for logistics companies as part of its ongoing effort to improve quality and reduce the environmental impact of its distribution process. In fiscal 2022, the briefing was held both online and in person, and 65 logistics companies participated.
Participation in White Logistics Movement and Efforts to Improve the Logistics Environment
Toray Industries participates in the White Logistics Movement,1 an initiative designed to ensure the provision of the stable logistics necessary for consumers’ lives and for industrial activities, while also contributing to economic growth. In line with the declaration of voluntary activities given below, the Company is actively working to improve the logistics environment based on mutual understanding and cooperation with business partners and logistics companies.
- 1 In response to the growing shortage of truck drivers in Japan, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), Ministry of Economy, Trade and Industry (METI) and Ministry of Agriculture, Forestry and Fisheries (MAFF) are working together to encourage the participation of shipping and logistics companies. The aim is to improve the productivity of truck transportation and raise logistical efficiency, while looking to realize a fairer labor environment, thereby making it easier for women and drivers over the age of 60 to work in the industry.
|Cooperate with the logistics improvement and proposals
|Seriously work on eliminating incidental work, etc. that leads to increased duty hours of truck drivers.
|Use pallets, etc.
|Expand use of packing styles (pallets, etc.) that enables loading using forklifts to reduce cargo loading time.
|Extend lead time
|Secure sufficient lead time corresponding to the transportation distance.
|Take legal compliance status into account
|Give utmost priority to assess compliance status with relevant laws upon selecting logistics companies for signing agreements.
|Actively utilize logistics vendors engaged in working style reforms, etc.
|Actively utilize logistics companies engaged in work-style reforms, improvement of transportation safety and logistics quality.
|Suspend, discontinue, etc. of operation in case of adverse weather, etc.
|Give utmost priority to the truck driver's safety in the event of adverse weather, earthquake, etc.
Improving Loading Operations Through Plant Logistics Innovation
The Mishima Plant of Toray Industries has faced the issue of trucks waiting for excessive periods of time at the plant’s film warehouse before being able to load. As part of Japan's White Logistics Movement to enhance logistics efficiency, Toray Industries decided to resolve this issue by creating a new digital system to shorten waiting times. The drivers can now check the waiting times online before heading to the warehouse and reserve an appropriate time slot.
Also, shipping forms that used to be printed out are now handled in electronic form using tablet devices. The elimination of paper forms has reduced the burden on workers and drivers, while also helping to create a paperless society. These internal logistics reforms are now being expanded to other Toray plants.
|・Reduction of average truck waiting times
|56 minutes per vehicle before implementation
15 minutes per vehicle after implementation (73% reduction)
|・Digitization of shipping documents
|Before implementation: 120 sheets of paper per day
After implementation: 0 sheets of paper per day
Improving Logistics Productivity by Using Smart Pallets
Toray Industries, Inc. is the first in the industry to use smart pallets equipped with active tags developed by UPR Co., Ltd. Typically, pallets must be replaced with different pallets during transportation and storage to prevent their loss or outflow, and the loaded products must be reloaded each time. Smart pallets, on the other hand, do not need to be replaced, since the coming, going, and inventory of pallets can be managed from a distance with the embedded active tags. Adoption of these smart pallets allows Toray’s products to go on the same pallet from production to storage, transportation, and use by the customer. This has eliminated cargo handling work by truck drivers and warehouse personnel, shortened loading and unloading time, improved the working environment, and increased logistics productivity. Moreover, the Company is reducing CO2 emissions related to pallet recovery by using its packaging materials recovery system to recover empty pallets.
In recognition of the Company’s contribution to reducing the environmental impact and the burden on transportation companies, Toray Industries jointly received, with UPR Co., Ltd., the Special Award in the Fiscal 2020 Green Logistics Partnership Conference Award for Excellent Business Operators.2 In fiscal 2021, Toray Industries and UPR jointly received the Sustainable Activity Award in the 22nd Logistics Environment Award3.
- 2 An award, presented by the Ministry of Economy, Trade and Industry, the Ministry of Land, Infrastructure, Transport and Tourism, and others, that recognizes businesses for their remarkable contributions to the establishment of sustainable logistics systems by reducing environmental burdens in the logistics sector or improving productivity in terms of distribution.
- 3 An award, presented by the Japan Association for Logistics and Transport, that recognizes groups, companies, and individuals who are contributing to the development of the logistics industry by reducing environmental impact. This includes conducting outstanding environmental preservation or awareness-raising activities or pioneering technological development in the logistics field.
Various Effects of Toray Industries’ Use of Smart Pallets (Fiscal 2021)
|・Reduce CO2 emissions related to pallet recovery
(by 197 t-CO2/year)
|・Reduce product loading and unloading time
(by 23,788 hours/year)
|・Improve efficiency of office work
|100% reduction in work time
(by 1,584 hours/year)
|・Reduce truck standby time
(by 5,947 hours/year)
|・Reduce distribution accidents (broken bags)
(by 148 incidents/year)
Reducing the Environmental Impact of Distribution
Reduction in CO2 emissions intensity from distribution activities (year-on-year)
- ■Reporting scope
- Toray Group （Only specified consigners）
- ■Target in fiscal 2022
Result in fiscal 2022
Toray Group is working hard to reduce CO2 emissions in transport. These initiatives include reducing transport distances, shifting modes of transport to those which have less environmental impact such as sea and rail (modal shift), and raising transportation efficiency.
In fiscal 2022, at Toray Group (only specified consigners4 in Japan), CO2 emissions from distribution activities5 were 27,300 tons, down 3,100 tons (10.3%) from the previous fiscal year, due primarily to a decrease in transport volume.
Due to an increase in net sales, which is the denominator, at Toray Industries and other group companies, CO2 emissions intensity6 decreased significantly for Toray Group. With the fiscal 2014 level (set at 100) as the base, the change in the Group’s CO2 emissions intensity was 77.0 in fiscal 2022, representing a decrease of 15.3% from the previous fiscal year (fiscal 2021).
In fiscal 2022, Toray Industries’ CO2 emissions from distribution activities totaled 24,000 tons, down 226 tons from the previous fiscal year. This was primarily due to efforts for full-load transport, increased loading rates and reductions in inefficient transport. In addition, transport volume fell for resin and film products in particular, resulting in an emissions decrease of 2,800 tons (10.3%) from the previous year.
Toray Industries’ CO2 emissions intensity from distribution activities decreased by 17.4% year on year (from fiscal 2021) because, CO2 emissions decreased, while net sales, the base unit denominator, increased. Over the past five years, however, CO2 emissions intensity decreased an average of 3.5% per year. As a result, Toray Industries is reliably meeting its legal mandate to reduce CO2 emissions intensity by an average of at least 1% every year.
Toray Group will continue to seek CO2 emissions reductions by pursuing environmentally responsible distribution.
- 4 Toray Industries, Inc. and Toray Advanced Film Co., Ltd., which have annual cargo transport totaling 30 million ton-kilometers or more, are “specified consigners” under Japanese law.
- 5 CO2 emissions from distribution activities refers to “CO2 emissions related to the transportation of cargo entrusted to freight carriers” stipulated in the Act on Rationalizing Energy Use (Revised Energy Conservation Act)
- 6 CO2 emissions from distribution activities ÷ the following transport-related indexes
Toray Industries, Inc.= Net sales
Toray Advanced Film Co., Ltd. = Shipping volume
Specified consigners are required to endeavor to meet the legal mandate to reduce CO2 emissions intensity by an average of at least 1% every year over the medium- and long-term.
CO2 Emissions Reduction in Distribution Activities (Toray Industries, Inc.)
|Details of initiatives
|CO2 Reduction (1,000 tons)
|Full-load transport, increased loading rates, and strategic positioning of warehouses, etc.
|Reduction of inefficient transport, revision of inventory storage locations, and loading at the nearest port, etc.
|Improved calculation accuracy (maximum loading capacity, average loading rate review, and fuel efficiency review, etc.)
Expanding Collection and Reuse of Packaging Materials
Toray Group is establishing a global framework to collect and recycle packaging and shipping materials that are included with products used by customers.
The value of these materials collected by Toray Industries in fiscal 2022 was 650 million yen, a decrease of 70 million yen (9.8%) from the previous fiscal year.
The volume of the materials collected also decreased due to a drop in shipment volumes for films. In order to reduce the amount of new material purchasing, the Group internally shares information on the inventories of used shipping materials being collected, such as temporary inventories at collection centers.
Promoting a Modal Shift
Modal shift to sea or rail for transport across distances for 500 km or more (%)
- ■Reporting scope
- Toray Industries, Inc.
- 40%（2022 target）（Calendar year）
Result in 2022（Calendar year）
Toray Industries laid out its commitment to environmentally friendly distribution in its Basic Distribution Policies (Revised in March 2022), in which it aimed to balance consideration for the environment in the distribution process with better competition achieved by cost-cutting. Toward this end, the Company has actively pursued modal shift (switching from trucks to rail and ship transport). In addition, modal shift is also effective as a measure to address the recent vulnerabilities in truck transport caused by a shortage of drivers. Toray Industries set a modal shift target of 40% to be achieved by 2022 and actively promoted initiatives to achieve this goal.
The modal shift rate for January to December 2022 increased by 0.3 points from the previous year to 27.4% due to efforts to expand the use of rail transport. This was supported by investigating a shift to rail for transport distances of less than 500 kilometers, which were not previously under consideration. However, with the increase in rail transport demand in Japan in 2022, transport by truck increased due to the difficulty of securing containers for rail transportation and the increase in the number of cases where lead times for rail transportation were unacceptable. As a result, the Company fell short of its 2022 modal shift rate target of 40%.
Toray Group will continue pursuing modal shift in diverse product and materials transport and will work more closely with distribution partners. Through these efforts, the Group will promote environmentally responsible distribution while taking into consideration the environmental impact of the distribution process.
Acquisition of Eco Rail Mark and Eco Ship Mark
Toray Industries 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 certifications for its TORAY TETORON™ fiber and TORAYCON™ polybutylene terephthalate (PBT) resin. Moreover, in fiscal 2017 Toray Industries achieved the Eco Ship Mark certification related to its film products, which are difficult to ship by rail. This program recognizes companies that are switching to ship transport and use maritime transport, which has a low environmental impact, to a certain extent.
Minimizing Natural Disaster Risks
Toray Industries implements measures to prevent or minimize the damage caused by natural disasters such as typhoons and heavy rains, which have been increasing in frequency in recent years. It does this by continually investigating and identifying natural disaster risks at external warehouse sites in Japan, and by implementing response measures together with warehouse operators.
In fiscal 2022, the Company ascertained the natural disaster risks at 67 main external warehouse sites. This was determined based on the structure of the warehouse buildings and the site environments, using tools such as hazard maps issued by the national and local governments. Eight sites were determined to be at high risk, and on-site inspections were conducted to confirm the actual situations. Based on the results of the investigation, tangible and intangible mitigation measures were discussed with the warehouse operators and improvements are being made. Specifically, disaster prevention manuals were created based on flood risk information released by the Japan Meteorological Agency, while portable water dams were prepared and pallets were raised off of warehouse floors.
In fiscal 2021 and 2022, Toray completed on-site inspections at 16 locations and discussed countermeasures. In fiscal 2023, further on-site inspections and discussions will be carried out to better mitigate risks.
- Portable water dam (measure example)
- Pallets raised above the floor level (measure example)
Initiatives to Improve Safety and Quality in Distribution
Toray Industries is working on a project to improve transport quality. The Company works with distribution partners to improve distribution quality and safety and to reduce the incidence of problems by sharing accident analysis data and distribution quality enhancement reports, conducting on-site inspections and holding quality control meetings with partners. Partners that make outstanding contributions to improving quality are recognized through annual awards7 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.
- 7 Distribution-partner companies receiving awards in fiscal 2022 (alphabetical order):
Iyoshoun Inc., Shikoku Meitetsu Transportation Co., Ltd., Sukagawa Tobu Logistics Co., Ltd., Daisei Warehousing & Transportation Co., Ltd., Nagahama-Reizou, Japan Transcity Corporation, Meitetsu Transportation Co., Ltd.
Recently, transport and warehousing companies in Japan have experienced a labor shortage, and incidents during transport have become more common.
Consequently, Toray Industries has seen an increase in product damage during transport on routes for smaller packages. In order to reduce this kind of damage as well as misdelivery, the Company approached distribution partners with high incident rates, in an effort to improve distribution quality. Discussions were held on improvement measures, on-site visits were made, and educational activities were carried out. Despite this, the number of distribution incidents in fiscal 2022 was 622, an increase of 16% compared to the previous year. The Company will continue working with partner companies to improve distribution quality.
Legal Compliance and Safety Initiatives in Distribution
Logistics Efforts for Security Trade Control
In order to ensure thorough compliance with security trade controls relating to the export of its products, Toray Industries provides ongoing security trade control training to external warehouses where regulated items are stored. In fiscal 2022, in addition to explaining security trade control measures to seven sites belonging to six companies, important points were highlighted regarding the handling of regulated items, based on past near-miss incidents. Through this training, Toray once again stressed the importance of managing and handling regulated products appropriately.
Recommending that Distribution Partners Acquire Third Party Certification
Toray Industries recommends that its distribution partner acquire external certifications such as ISO 9001, ISO 14001, Green Management Certification8 and G Mark.9 These certifications require companies to achieve legal compliance, improve quality, and practice environmental conservation in distribution processes. Toray Industries also pursues CSR initiatives in collaboration with distribution partners.
- 8 Certification is awarded by the Foundation for Promoting Personal Mobility and Ecological Transportation 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)
- 9 A system that recognizes companies that meet certain criteria and demonstrate excellent safety, based on an assessment by the Safety Evaluation Committee established by the Japan Trucking Association of proactive initiatives for legal compliance and safety recommended by the Ministry of Land, Infrastructure, Transport and Tourism
Yellow Card Emergency Response Measures
Drivers of shipping vehicles carry a yellow card10 detailing emergency measures to be taken to minimize damage in the event of an accident. Toray Industries has also established an emergency communication system and carries out emergency training. In the unlikely event of such an accident, the Company has procedures in place enabling the necessary staff to be dispatched as swiftly as possible to the accident site for assistance.
- 10 A Card listing the names of any hazardous substances, applicable laws and regulations, hazardous properties, procedures in case of accident, emergency reporting and contact information, methods for minimizing the spread of damage, and other relevant information.
Initiatives to Prevent Overloading
The overloading of trucks causes vibration, noise, damage to roads and facilities, and also creates driving hazards. Consequently, Toray Industries 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)11 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 Group is also encouraging its worldwide distribution partners to obtain Authorized Economic Operator (AEO)12 status.
- 11 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.
- 12 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.
Click here for the main initiatives for CSR Guideline 9, “Establishing Sustainable Supply Chain” in CSR Roadmap 2022.