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Home / GRI Standards / Case study: How Mazda reduces logistics emissions

Case study: How Mazda reduces logistics emissions

Mazda is a leading global automaker, with vehicles sold in more than 130 countries and regions worldwide and manufacturing operations in seven. Viewing environmental protection as an urgent issue for humanity, and the highest priority issue facing automakers, Mazda is working with logistics companies, dealerships, and other automakers throughout Japan to provide customers with the volume they require while reducing CO2 emissions during product shipment through highly efficient logistics, across the entire supply chain.

This case study is based on the 2018 Sustainability Report by Mazda published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Mazda is making efforts to reduce environmental impact throughout the entire product life cycle  Tweet This! and has achieved, in FY March 2018, a 41% reduction in transportation CO2 emissions per ton-kilometre (compared with FY March 1991 levels). In order to reduce logistics emissions Mazda took action to:
  • reform transportation by consolidating logistics centres
  • improve the ratio of modal shift for the transportation of service parts
  • promote “straight” logistics without distribution centres
  • reduce the transportation distance for procured parts for overseas production
  • reduce the transportation distance for repair parts
  • improve transportation efficiency for procured parts

What are the material issues the company has identified?

In its 2018 Sustainability Report Mazda identified a range of material issues, such as indirect economic impacts, effluents and waste, occupational health and safety, diversity and equal opportunity. Among these, reducing logistics emissions stands out as a key material issue for Mazda.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Mazda engages with: 

Stakeholder Group                Method of engagement
Customers

 

 

·      Establishment of call centres

·      Mazda Official Website and social media

·      Day-to-day sales activities

·      Customer satisfaction surveys

·      Holding events

·      Interviews with customers

·      Meetings with Mazda vehicle owners

Shareholders and investors ·      Website for shareholders and investors

·      Publication of the asset securities report and the quarterly financial reports

·      Publication of the summary of financial results

·      Quarterly presentation of financial results

·      Publication of shareholder reports

·      Holding ordinary general meetings of shareholders

·      Publication of the Annual Report

·      Publication of corporate governance reports

·      Presentations and plant tours for investors

Business partners ·      Hotlines linking Mazda with dealerships

·      Day-to-day purchasing activities

·      Supplier communication meetings

·      Conferences with representatives of dealerships

·      Conferences with supplier executives

·      Commendation of outstanding suppliers and dealerships

Employees ·      Labour-Management Council

·      Direct communication with senior management (MBLD)

·      Global Employee Engagement Survey

·      Career meetings

·      Career Challenge System (in-house recruitment and “Free Agent”)

·      Group and optional training

·      Lectures

Global society and local communities

 

·      Opening to the public of the Mazda Museum and plant tours

·      Execution of social contribution activities and participation in and promotion of volunteer activities

·      Dialogue through economic and industry organisations

·      Interaction/exchange of views with the local community

·      Response to hearings, information disclosure, etc.

·      Dialogue, cooperation and support through collaboration of industry, academia and government

Next generation people (environment)

 

·      Holding and participating in environmental events

·      Setting targets and reporting the results under Mazda Green Plan 2020, midterm environmental plan

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Mazda engaged with its stakeholders through a questionnaire survey, obtaining their opinions and evaluations.

What actions were taken by Mazda to reduce logistics emissions?

In its 2018 Sustainability Report Mazda reports that it took the following actions for reducing logistics emissions:

  • Reforming transportation by consolidating logistics centres
  • Mazda consolidated its logistics centres nationwide, with the aim of combining delivery routes with low shipping volumes while ensuring timely shipments. Continuously reviewing the operation of car carriers (domestic vessels) according to their shipping volumes has enabled Mazda to improve loading efficiency. To make more effective use of the domestic vessels on the return journey, collaborative transportation has also been promoted with other companies. In February 2016, Mazda started the operation of a new domestic vessel and in May of the same year existing vessels were modified, resulting in a 30% improvement in transportation capacity. In FY March 2018, Mazda reduced CO2 emissions by around 3,800 tons, by enhancing fuel economy as well as transportation capacity through full-fledged operations of these domestic vessels. Moreover, by loading completed vehicles into ships as directly as possible from their manufacturing sites, Mazda succeeded in curbing around 17 tons of CO2 emissions.
  • Improving the ratio of modal shift for the transportation of service parts
  • Mazda is seeking to improve the rate of modal shift regarding the transportation of service parts and, in May 2016, started to use large returnable containers, originally introduced to transport parts overseas, for domestic transportation. This was aimed at reducing transportation CO2 emissions by improving the load efficiency of JR (JapanRail) In FY March 2018, Mazda promoted the use of JR for domestic transportation, in accordance with the relocation of parts sales companies beginning in FY March 2016. As a result, Mazda increased the rate of transportation by JR from 25% to 45% per transportation volume (ton-kilometre), reducing CO2 emissions by around 400 tons.
  • Promoting “straight” logistics without distribution centres
  • After the manufacture of parts to be exported to overseas assembly plants is completed, they are packaged and loaded into containers at the same location, eliminating the need for shipment between production locations and distribution centres. At present, the coverage of this logistics system is expanding to engines, transmissions and auto body parts produced at the Hiroshima Plant and the Hofu Plant. In FY March 2018, Mazda also expanded the quantity of transmissions vanned at plants to be exported to the Mexico plant.
  • Reducing the transportation distance for procured parts for overseas production
  • Previously, the parts procured in Asia to be used for overseas production were transported via Japan to Mazda’s Mexico plant. In July 2016, this was changed to direct transportation, so that now these parts are transported from existing distribution centres in Thailand and China, leading to a reduced transportation distance. In Japan, in FY March 2017 Mazda started to land parts imported from overseas at the ports close to production sites, in order to reduce the transportation distance between the Hiroshima Plant and Hofu Plant. In FY March 2018, Mazda enlarged the scope of models to which this measure is applied, reducing CO2 emissions by about 8 tons.
  • Reducing the transportation distance for repair parts
  • When Mazda’s Mexico plant started to run, repair parts were transported via North America to Europe, since their transpiration volume was small. Three years after the plant’s startup, however, the volume was on the rise. For this reason, the shipping method was changed to direct transportation to Europe. By reducing the transportation distance through straight logistics, Mazda succeeded in reducing CO2 emissions by approximately 1,400 tons.
  • Improving transportation efficiency for procured parts
  • For domestically produced parts, deployment of the Milk-Run system was completed throughout Japan by FY March 2008. Today, Mazda is introducing the same system in overseas production sites, with deployment in the Mexico plant completed in FY March 2014 and in the transmission plant in Thailand completed in FY March 2016, aiming to reduce CO2 emissions by further promoting efficiency in the purchasing and logistics processes across the entire supply chain. Mazda is continuing its initiatives to optimise its packaging volume for purchasing parts, reflecting the logistics needs at the beginning of the product development process, so as to further improve the load efficiency of trucks and reduce the number of trucks required. In Japan, Mazda introduced the Cloud-based Transportation/Delivery Progress Management Service for Logistics Operators in 2016. This service has been proven effective in reducing delivery time and costs and improving the quality of transportation, as well as in mitigating the burden on drivers, easing traffic congestion, and reducing CO2 emissions through efficient transportation. Mazda plans to apply this service to 600 vehicles in five years after its launch. In FY March 2018, the number of vehicles covered by this service increased to 350 from 220 at its inception.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 302-2 Energy consumption outside of the organization

Disclosure 302-2 Energy consumption outside of the organization corresponds to:

 

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References:

1) This case study is based on published information by Mazda, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

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