Responsible Logistics

Goals and Achievements of Major Initiatives

Objectives of initiatives Goals for fiscal year 2017 Achievements in fiscal year 2017 Evaluation Goals for fiscal year 2018
Reduce CO2 emissions attributable to the transport of products (Scope 3). Reduce CO2 emissions by 1.0% by promoting modal shift and improving transport efficiency. 1. Energy consumed per unit of production declined 3.0%.
2. CO2 emissions attributable to the transport of products declined 2.0%.
★★

★★
Reduce CO2 emissions by 1.0% by promoting modal shift and improving transport efficiency.
  • Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Basic Policy and Framework for Promoting Initiatives

DIC’s commitment to promoting Responsible Care encompasses initiatives aimed at ensuring safety in logistics, that is, at lowering chemical risks associated with the distribution of chemicals, and at reducing CO2 emissions attributable to the transport of its products. The DIC Group’s logistics configuration—components of which include transport between production facilities, the transport of products to customers and international logistics—previously centered on a dedicated subsidiary, established in 1999, that operated under the direct supervision of DIC. In a bid to rationalize and increase the efficiency of logistics, in 2011 DIC transferred ownership of the subsidiary to a partner firm and began to outsource its logistics. Since then, the Group has worked closely with this and other partner firms to improve the safety of and reduce CO2 emissions attributable to logistics.
With the aim of better responding to social imperatives associated with the transport of chemicals over the medium to long term, in January 2016 DIC combined the logistics components of its various departments to create an independent Logistics Department. As a consignor, the new department, which comprises three sections—domestic planning, overseas planning and the global trading group—is charged with formulating logistics policies and promoting efforts to enhance efficiency, as well as with coordinating with logistics partners, that is, third-party logistics (3PL*) firms providing complete outsourced logistics services, to further enhance safety and reduce environmental impact.

  • *3PLs are firms that provide partial or complete outsourced logistics services.

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Safety Management in Logistics

Regular meeting with logistics partners
Regular meeting with logistics partners

Yellow Card carried by transport personnel
Yellow Card carried by transport personnel

The firms to which the DIC Group outsources logistics use containers that comply with the Fire Service Act and other transportation laws, as well as with related UN standards. The Group supplies information needed to display labels complying with the GHS as well as provides SDSs and other documentation to ensure safe shipping in Japan and overseas.
In Japan, the Logistics Department cooperates with its logistics partner firms, meeting regularly to discuss measures for improving the safety of both loading and transport work. Of particular note, logistics quality issues that cause trouble for customers—including leaks, undelivered cargo and delivery errors—are designated as incidents for priority attention. Targets, number of incidents, causes and countermeasures are confirmed at monthly meetings to ensure steady improvement. In fiscal year 2017, the incident rate was 44 ppm, down approximately 30% from the previous period. Members of plant health and safety committees attend each others’ meetings to exchange information and promote on-site safety improvement initiatives.
he Logistics Department also inspects the offices of logistics partners located on-site at its 20 main domestic production facilities. In fiscal year 2017, inspections were conducted at nine of these offices, during which issues were pointed out and improvements confirmed. In addition, DIC endeavors to maintain and enhance safety by requiring transport personnel to carry Yellow Cards*.

  • *Yellow Cards are part of activities recommended by the JCIA. These cards contain information about the correct actions to take if an accident occurs. They provide contact details to ensure proper responses by transportation companies, firefighters and police officers if an accident occurs during the transport of chemical substances. Transport personnel must carry these cards at all times.

TOPICS DIC Uses Container Vibration Data to Improve Transport Quality

As part of its effort to improve transport quality, in fiscal year 2017 DIC’s Logistics Department conducted tests to verify the degree of damage to 18-liter oil cans and other cargo containers from vibration during transport. When DIC products are transported in oil cans, the cans are generally secured with cable ties and packed onto pallets, which are then loaded onto transport trucks. Tests verified that even on extremely rough roads, cans suffered no major damage, with impact limited to minor scratches. As a result, the department concluded that damage to cans was occurring when pallets were loaded and unloaded from trucks using forklifts, as a result of which it inferred that the risk of damage to cans increases the more times they must be unloaded and reloaded at transfer points. The department shared test data with logistics partners to serve as a yardstick for joint efforts to formulate remedial measures. As a company that manufactures and transports chemical substances, DIC will continue working to ensure the safety of its logistics practices.

Reducing Greenhouse Gas Emissions Attributable to Logistics

CO<sub>2</sub> Emissions and Energy Consumption per Unit of Production Attributable to Logistics
CO2 Emissions and Energy Consumption per Unit of Production Attributable to Logistics

While the volume of products shipped edged down 1.0%, energy consumption declined 3.0% and CO2 emissions attributable to logistics decreased 4.0%. Energy consumption per unit of production attributable to logistics improved 1.0%. These results were attributable primarily to ongoing efforts to combine lots and to shift from truck transport to transport using purchased containers, as a result of which the Group’s modal shift rate rose 3.0 percentage points to 12.0%, from 9.0% in fiscal year 2016, with transport by ship rising 16.0% and transport by rail up 41.0%.
In Japan, a critical shortage of qualified drivers has become a serious issue for the logistics industry. To improve the effectiveness of measures taken to address this issue, the Logistics Department worked with the DIC Group’s logistics partner firms to conduct a survey of drivers. Based on the findings of this survey, steps will be taken to reduce drivers’ working hours, including verifying standby times—i.e., time waiting for cargo to be loaded—at production facilities and improving the efficiency of order picking and inspection procedures.
In a new initiative, DIC commenced shared logistics on a trial basis. This involves collaborating with other chemicals manufacturers to ship products on one truck using a milk run format, thereby reducing the number of trucks needed, increasing load efficiency and minimizing emissions of CO2. DIC’s Logistics Department is currently analyzing the benefits and risks of this approach and will incorporate its findings into action plans for subsequent fiscal years.
In an effort to assist overseas Group companies, in the period under review a logistics manager was assigned to DIC Asia Pacific, which oversees Group operations in the Asia–Pacific region. DIC also studied workflows at individual overseas Group companies with the goal of rationalizing and enhancing the efficiency of logistics. Looking ahead, DIC will continue to support the efforts of Group companies overseas while at the same time shifting its focus from optimizing logistics for the DIC Group alone to realizing practices that are optimally suited to regional conditions.

VOICE

We are addressing the shortening of transport flow lines as a common challenge and developing multifaceted remedial measures.

A common challenge in logistics, whether we are looking at our operations in Japan or overseas, is to shorten transport flow lines. By promoting related initiatives, we will also help reduce energy consumption, CO2 emissions and transport costs. Accordingly, we will continue to put our heads together to determine effective approaches and develop and test promising new measures. For example, in Japan DIC currently leases a considerable number of warehouses, which it uses for inventory adjustment and to ship products. We are currently investigating whether the length of related flow lines is appropriate. This is just one of a number of efforts to reexamine aspects of logistics that were previously ignored. The operating environment for logistics services is increasingly harsh. We have opted to view this as an opportunity for an overhaul with the aim of further rationalizing and increasing the efficiency of our logistics practices.

General Manager, Logistics Department Kazuhiko Yamada

General Manager, Logistics Department
Kazuhiko Yamada

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