SM looks back at the most popular stories from Asia in 2021.
1. Fears for global supply chains as outbreak hits key ports
A Covid-19 outbreak in southern China in June threatened to cause fresh disruption for global supply chains as lockdowns disrupted port services and delayed deliveries.
Authorities in Guangdong province shut down businesses to halt the spread, causing shipping delays in the ports of Shenzhen and Guangzhou.
Disruption at the ports, respectively the third and fifth busiest in the world, sent already high shipping rates rocketing.
2. Huge backlogs at Chinese ports spell shortages for Europe and US
Massive backlogs at critical Chinese ports in October exacerbated the supply problems at European and US ports.
Data from Project44 showed there were 386 ships anchored and moored off Shanghai and Ningbo ports, with an additional 45 container vessels waiting to moor, creating shortages and raising costs for US and European businesses ahead of the holiday season.
3. How does Toyota stay number one for SRM?
A focus on the impact of procurement decisions on suppliers kept Toyota at the top of an automotive SRM ranking.
Toyota was number one in the annual North American Automotive OEM Supplier Working Relations Index (WRI) from Plante Moran, followed by Honda and General Motors.
Dave Andrea, principal in Plante Moran’s Strategy and Automotive & Mobility Consulting Practice, said Toyota was “engineering and manufacturing-centric”.
He told SM Toyota’s procurement decisions “orient themselves to the best product out there in the most effective and efficient way”, which in turn helped the company to be “supplier-centric in their decisions”.
4. Three lessons from Fujitsu’s global procurement overhaul
Revisiting key cornerstones of business was crucial on Fujitsu’s journey to establishing a global procurement function, a conference was told.
Clive Rees, VP, international chief procurement officer at Fujitsu, told delegates at eWorld the firm had begun its journey towards a global procurement function towards the end of 2018 to tackle its “very fragmented” procurement system.
“What we've tried to move to is a situation where we have joined up the global supply chain with the regions,” he said. “We're trying to adopt best practice where we can across the globe. We're standardising the policies, the systems and the tools we use.”
5. NHS glove supplier linked to forced labour
An NHS glove supplier was banned from importing products into the US by the US Customs and Border Protection (CBP).
An investigation by CBP said it had “ample” evidence to support claims Supermax Corporation Berhad violated US trade laws.
CBP said it had identified 10 indicators of forced labour abuses throughout its investigation into the Malaysian rubber glove supplier.
6. Chinese displeasure after vaccine price revealed
China’s Sinopharm vaccine became embroiled in controversy after secret procurement pricing details were revealed.
Newspapers reported Nepal had been forced to sign a non-disclosure agreement when it agreed to purchase 4m doses of the China-manufactured Sinopharm vaccine. The agreement stipulated the price per dose would not be revealed.
Nepal was left urgently looking for alternate sources of vaccines after India temporarily blocked vaccine exports in late March when it faced its second wave of coronavirus infections.
Newspapers questioned the legality and transparency of a public procurement process where the price was not revealed publicly, reporting the Nepalese government was likely to pay $10 per dose for the 4m vaccines.
7. India rejects UN supply chain support to tackle Covid
India rejected UN supply chain assistance in its battle against the latest coronavirus wave in April, claiming its own supply chains were robust enough to manage.
UN spokesperson Farhan Haq said: “We offered the assistance of our integrated supply chain if it was required. We’ve been told at this point that it’s not needed because India has a reasonably robust system to deal with this.”
8. Major brands 'likely to have cotton linked to slavery in supply chains'
Opaque supply chains meant many companies could be falling foul of slavery laws by purchasing cotton produced in China’s Xinjiang province, a report found.
The report by Sheffield Hallam University said there was a high likelihood Xinjiang cotton, made with slave labour, was still entering international supply chains because large amounts of it was shipped to third countries for garment manufacturing.
Researchers identified 103 western companies that may unwittingly be buying cotton from the region via international markets, including C&A, Calvin Klein, Carrefour, Marks & Spencer, Michael Kors, Nike and Primark.
9. Why firms must 'eliminate' palm oil from supply chains
Firms must switch to palm oil alternatives in order to protect producer nations from the impacts of climate change, a report warned.
The report from consultancy Kearney said palm oil supplies were “under threat amid a perfect storm of skyrocketing demand and unsustainable production processes”.
Palm oil, which is a prevalent ingredient in many products such as packaged foods, shampoos and soaps, and pharmaceuticals, has been linked to a wide range of environmental and human rights issues.
The destruction of rainforests in the two largest palm oil-producing nations – Indonesia and Malaysia – is threatening to cause the extinction of orangutans, pygmy elephants, and Sumatran rhinos, as well as producing vast amounts of greenhouse gases.
10. Toyota cuts production by 40% due to chip shortage
Toyota announced in August it planned to cut global production by up to 360,000 vehicles – 40% – in September due to a shortage of semiconductors.
The cuts were mainly taking place in 15 factories in Japan and across Europe.
The carmaker had already halted production at some of its Japanese factories in July and August after a rise in coronavirus infections in Vietnam led to shortages.
Toyota had previously managed to mitigate the impact of the chip shortage because it stockpiled semiconductors following the Fukushima nuclear disaster in 2011.
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