How to Increase Transparency Along the Supply Chain: Lessons from the Automotive Industry

August 13, 2018 EcoVadis ‏‏‎

rubberway

 

After 18 months of piloting and deployment, Michelin is ready to investigate the results from Rubberway, an app designed to map the upstream natural rubber supply chain.

 

As much as 85 percent of rubber tree plantations in the world are made up of small farms, with the average size of around three hectares, which are managed directly by owner-operators. The natural rubber industry employs around six million households. As a result, mapping the value chain of natural rubber can be a great challenge. Diving into the environmental and social practices in the natural rubber value chain, Michelin has embarked on a journey to develop and deploy a unique tool, which requires the collaboration of its own suppliers, the suppliers of their suppliers and so on … until it reaches the local farmers.

Reaching the Bottom of the Supply Chain

How has it been possible? To get to the bottom of the supply chain, the automotive giant developed Rubberway, an innovative digital tool available on mobiles and tablets. It’s essentially a customized questionnaire made up of about 50 questions, tailored to four specific categories matching the natural rubber supply chain organization: Factories, intermediates, smallholders/ farms and estates for plantations of over 50 hectares. The questions are close-ended, with single or multiple answers, and focus on four key performance indicators: Respecting people, protecting the environment, agriculture practices and supply chain transparency.

On the practical side, the starting point for the mapping process is the factories, Michelin’s direct suppliers. Each factory manager receives a unique weblink and completes the “Factory” questionnaire. The factory then submits appropriate questionnaires to its direct suppliers, whether it’s estates, intermediates or smallholders, who then cascade the questionnaire until it reaches the maximum of smallholder farms. There is no limit to the number of possible contacts: The objective is to disseminate the questionnaire as much as possible, each respondent getting its own unique weblink to complete it. And what’s interesting is that suppliers don’t have to fill it out more than once, even if they sell or provide services to multiple buyers.

And to make the app even more useable, the questionnaires are available in five languages: Thai, Bahasa Indonesia, Portuguese, English and French. So far, the costs are supported by Michelin, which is looking at eventually converting Rubberway into an independent industrial tool managed by a third-party operator.

Suppliers’ CSR Performance in Full View

To ensure clarity, suppliers’ CSR performance – based on the answers to the questionnaire – is presented via two main displays: An interactive dashboard and an interactive map. From the interactive dashboard, it’s possible to filter the results according to the four categories (factory, intermediary, smallholder  and estate) and to the KPIs (people, environment, agriculture practices, transparency). It’s also possible to access the aggregated score for each question, for example suppliers’ training needs on prevention and elimination of rubber tree diseases. All the data collected through the platform is confidential and can only be access on an aggregated format. Michelin and its natural rubber suppliers have access to the aggregated data of their own factories, dealers and farmers.

With the interactive map, it’s possible to access to the overall score for each supplier type, and then to detail the score for each KPI and each theme. On this map, only the factories are geo-localized, which is not the case for intermediaries and smallholders as they appear by region.

An Optimistic Outlook

We’re yet to see how the app will continue to be used in the future and whether similar tools can be effective in other industries. But Michelin’s results so far are very encouraging. Including the six-month pilot phase (from February 2017 to July 2017), more than 5,300 questionnaires have been completed. As the point of entry,  27 factories supplying Michelin have completed the questionnaire. Smallholders/farmers represent the biggest takers with 83 percent of the filled questionnaires. Intermediaries/dealers are also present with 16 percent. And what’s interesting, plantations of over 50 hectares have also responded positively with 36 of them having responded to the questionnaire.  

“The assessment of our direct suppliers via EcoVadis showed us that the areas that needed improvement the most were those in upstream supply chain,” said Edouard de Rostolan, CSR Manager at Michelin.

“It was therefore natural for Michelin to offer [our suppliers] a pragmatic and effective solution to help them. Rubberway is an innovative tool for CSR mapping, mainly geared towards smallholders, which will allow our key suppliers to better understand the improvement areas and address them. Speaking in general terms, we also want to impact the entire natural rubber supply chain by making Rubberway an industry-wide tool. Our goal is to map 80 percent of the natural rubber supply chain by the end of 2020.”

Find out more about EcoVadis’ CSR rating methodology and comprehensive assessments EcoVadis offers companies to help them identify and manage risks, increase transparency and improve performance.

by Rose-Line Michel-Etienne, Senior CSR Analyst

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 190 purchasing categories and 150 countries.

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