Supply Chain weekly wrap-up: 9/4/15 – 9/10/15

Toyota aims to establish a carbon-neutral supply chain by using hydrogen

Among other organizations in Japan’s public and private sectors, Toyota is participating in an experiment to test a fully hydrogen-based supply chain. The four-year project, starting in April 2016, will be located near Yokohama and Kawasaki. According to Toyota, more than half of the global greenhouse gas emissions are produced by fossil fuels which are used for transportation, power and heat generation. This is why the participating organizations, precisely the Kanagawa Prefectural Government, Yokohama City and Kawasaki City, as well as tech companies Toyota, Toshiba and Iwatani, aim to build carbon-neutral supply chains in different sectors by using hydrogen.

Renewable wind energy will be used to transform water into oxygen and hydrogen through electrolysis. After storing and compressing the hydrogen, it will be loaded on a mobile fueling station and moved to the coastal area of Keihin. It will then be used to power fuel cell forklift trucks, in order to examine the viability of hydrogen in the supply chain. Earlier this year, Toyota teamed up with Nissan and Honda to build new hydrogen charging stations in Japan, aiming to spread the technology across the country.

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Amazon launches a new food-delivery service in Southern California

It was announced this week that online retailer Amazon introduced a new business: an on-demand food delivery service that will at first only be available in Southern California. In order to deliver the fresh, seasonal products within three hours, Amazon teamed up with the startup Fresh Nation, founded in 2013 in Danbury, Connecticut by Tony Lee. The business sells baskets and single products in small ($39) and large ($59) sizes within 36 hours after being harvested. At the moment, the service is only available for Amazon Prime Fresh members and has a fixed price of $299 per year. Based on the orders, individual bags are put together at the markets, which are then forwarded and sorted in Amazon’s distribution center in San Bernardino, California and ultimately delivered to the costumers. Apart from Amazon, other tech companies like Instacart, Postmates and Fresh Direct offer the delivery of fresh groceries. For the convenience factor, costumers are willing to pay 15 to 30 percent more than they would in the store.

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Cotton supply chain of UK’s businesses

In Uzbekistan and Turkmenistan, the cotton crop is picked by forced labor, an activity that is supported by the governments. Since the Modern Slavery Act became effective, UK businesses obtaining their cotton from suppliers in these two countries are now required to report forced labor in their supply chains and display their efforts to fight it. However, there is no formal supervision by the British state because the government believes that businesses should be controlled by consumers and society. Critics point out that the general public should not be responsible for controlling the fulfillment of the law and moreover, many businesses do not even have direct contact with consumers, and can therefore not be supervised by them.

In Uzbekistan and Turkmenistan it is the government that is encouraging forced labor. They force millions of teachers, doctors and nurses to lay down their normal work and pick the crops. Employers make them sign a document, saying they work voluntarily on the cotton fields. It is therefore not only companies dealing with cotton that are supporting the governmental use of forced labor, but also companies (foreign and domestic) forcing their own workers to help harvest the cotton. The government then buys the cotton at a low price and sells it with high profit to other countries, mostly in Asia but also in Europe.

The Modern Slavery Act has the right intentions, however the implementation needs to be controlled by the government. There will soon be a guidance for businesses on how to fulfill the new law, and information about where forced labor is likely being used will also be provided. It would also be helpful for the British government to step in and denounce the use of forced labor by Uzbekistan and Turkmenistan.

For the entire article, click here.

Have a nice weekend!