Managing Risks in Response to Supply Chain Fragmentation
*This case study is published based on information as of March 2023.
Konica Minolta, Inc.
| Update | April 19, 2023 (Posted on December 25, 2023) |
|---|---|
| Publication date | July 25, 2018 |
| Sector | Industrial and economic activities |
Company Overview
Konica Minolta, Inc. is a Japanese manufacturer of electrical equipment whose products and services include MFPs, commercial and industrial printers, IT solutions, industrial inkjet, medical products (healthcare), and measuring equipment.
Climate Change Impacts
Extreme weather events, which are already setting new observation records, are having a major impact on our daily lives. There are concerns that large-scale floods and disaster-grade heat waves will occur more frequently or become more severe in the future.
Acute climate disasters such as major typhoons and floods could damage our facilities and labor environment, making it difficult for employees to perform their jobs. Frequent and large-scale heavy rains and droughts would also make it difficult to maintain the water resource availability. As a result, operations of our sites and suppliers may be temporarily halted, disrupting the supply chain and delaying production and shipments.
The increased risk of large-scale windstorms, landslides, and longer term sea level rise, makes it difficult to continue critical operations, including production and R&D activities at geographically susceptible site locations.
Adaptation Initiatives
We are implementing climate change adaptation efforts throughout our supply chain. Since the effects of climate change are manifested in various ways depending on geographic, economic, social, and other circumstances, there are no universal adaptation measures. Therefore, we are working to identify how each country and region might be affected by climate change, in order to devise the measures to be taken.
- Securing multiple suppliers based on digital manufacturing to avoid over reliance on certain people, places, countries, and fluctuations
We ascertain our upstream supply routes all the way back to basic raw materials, and for high-risk raw materials, we are working to secure multiple suppliers while considering alternative materials. We are selecting suppliers based on a digital manufacturing approach, which establishes a production system that are not overly reliant on certain people, places, countries, and can adapt to market fluctuations. - Carbon Neutral Partner Activities (Activities to reduce water consumption at supplier sites)
We are promoting "Carbon Neutral Partner Activities" in which environmental technologies and expertise we have developed through Sustainable Factory activities are put into practice at our suppliers' sites. They are investigating and implementing measures to reduce water consumption in line with the stipulated guidelines. - Sustainable Factory Activities (water risk assessment, mitigation measures, and water conservation)
Our key production sites around the world have set targets to reduce water intake and are promoting initiatives to reduce water consumption. In fiscal 2021, we set a target to reduce water intake of 418,000 m3 compared to fiscal 2015, and achieved a reduction of 423,000 m3.
Focusing on "water resource risk" as a chronic physical risk due to climate change, we introduced Aqueduct (*1), a comprehensive risk assessment on usage of water resources, for major sites and suppliers around the world in fiscal 2013 to identify sites with high water risk and implement necessary countermeasures. - Establishment of Business Continuity Management (BCM)
We formulated our Business Continuity Plan (BCP), a specific action plan that takes into account our worldwide supply chain, to ensure that even if a site is damaged by a large-scale natural disaster, our essential operations will not be interrupted and even if they are interrupted, they can be resumed in the shortest period of time. We established an "initial response manual" to collect information on damage immediately after a disaster occurs and determine whether or not to put the BCP into action, including in our mainstay business of information equipment and medical equipment, which is in high demand at the time of a disaster. To verify this system, once a year the Disaster Response Headquarters conducts a group-wide disaster preparedness training to quickly assess the extent of the damage, decide on a response, and make decisions.
Effects/Expected Benefits
By securing multiple suppliers of raw materials, considering alternative materials, and establishing BCM, a resilient supply chain system is expected to be secured.
With regard to water use, we will continue to review water risk assessments in response to the establishment of new bases and changes in the business environment, and take measures to reduce water use as necessary.
