Supply Chain Sustainability

About Supply Chain Sustainability

Why is supply chain sustainability important?

Supply chain sustainability was initially started in the B (Business) to C (Consumer) sectors, such as food and retail, to address the demands of consumers who want to ensure the safety of the products they purchase, as well as of those who are highly conscious about whether the products are produced ethically, especially in terms of labour standards.

Over the last 10 years, the situation has changed greatly. With increasing globalisation, the supply chain has become stretched in many sectors including manufacturing, ICT, and even in the service sectors. At the same time, the spread of the Internet has increased the scrutiny placed on corporate activities by the media and NGOs. Rating agencies have also begun to ask companies about their supply chain management through questionnaires. Moreover, some governments have moved to tighten regulations. These situations have resulted in growing investor interest in how companies manage risks and opportunities in the supply chain.

Today, supply chain sustainability is widely recognized as a key to business contingency, productivity and reputation management.

How is supply chain sustainability realized?

When it comes to incorporating supply chain sustainability into existing management system and activities, many companies seem to face complicated questions – “where” to start, “how” to identify issues to be addressed, and “to what extent” they should engage with suppliers. Here are three tips for stepping forward and progressing with supply chain sustainability.

1. Starting with a narrow focus, broadening it incrementally

For companies conducting business globally, it is almost impossible to address all the issues in the supply chains at one time. Therefore, it is important to start with a narrow focus – issues and areas that are significant for the company, and to practically learn the steps to deal with an issue in the supply chain. The scope should be gradually broadened based on the knowledge and expertise accumulated during the first initiative.

2. Utilizing external tools and platforms

Identifying specific issues in the country or community where a company operates and establishing how suppliers address these issues are vital for assessing the impacts that the company could have on society. However, there are some limitations to the gathering of such information and data by only one company. For the sake of greater efficiency and effectiveness, it is a good idea to utilize external tools and platforms that have been widely used globally.

3. Incorporating a human-centered approach to the existing supply chain management system

Many companies conduct supply chain assessment in various ways including questionnaires and on-site audits. However, the gaps between the results and the actual conditions at sites will not go away, even if a company tightens up its suppliers. It is important to put in place a management system that respects the autonomy of each and every worker (the “human touch”), incorporating a human-centered approach to the existing supply chain management system. Facilitating an on-site culture that encourages active (autonomous) self-motivation amongst employees, rather than a more passive culture of simply following orders, which lead to effective supply chain management.

Our Activities

1. Collaborating with Sedex to boost responsible sourcing in Japan

On 11 February 2015, Sedex, the leading non-profit organisation dedicated to improving global supply chains, and CRT Japan, the Japanese arm of an international network of principled business leaders working to promote a moral capitalism, made the partnership agreement that CRT Japan is the Sedex Global Representative in Japan.
Further information is here.

2. Developing grievance mechanisms in Asia/ASEAN

CRT Japan is now striving to establish grievance mechanisms in Asia/ASEAN region for Japanese companies. Corporations are required to not only implement proper human rights due diligence procedures, but also to provide an effective grievance mechanism, as the right to an effective remedy is a core tenet of international human rights. CRT Japan believes that these initial grievance mechanisms will help Japanese companies to elicit the voice of rights-holders, identify locally specific human rights issues, and mitigate and effectively manage business-related human rights risks.
Further information of our grievance mechanisms is here.

Contact

For more information on Supply Chain Sustainability, please contact info@crt-japan.jp