Report: CSR Key to Fighting Rising Costs in China

SHANGHAI, March 20, 2012 /PRNewswire-Asia/ -- Implementing socially responsible initiatives across the supply chain help companies reduce costs, build their brand and achieve compliance objectives, according to The China CSR Imperative: Implementing Social Responsibility Across the China Supply Chain a new report released today by The American Chamber of Commerce in Shanghai (AmCham Shanghai) at the Four Seasons Hotel in Shanghai.

AmCham Shanghai's latest Viewpoint show that, while efficient supply chain operations and corporate social responsibility (CSR) initiatives are often considered mutually exclusive, aligning operating goals with consumer preferences increasingly focused on sustainability and government's societal welfare targets can support a company's business objectives in China.

Integrating CSR across the supply chain has the potential to significantly reduce costs through initiatives such as calculated energy and resource usage and smart labor planning.  In addition, companies can leverage their fair labor practices, environmentally friendly sourcing and sustainable manufacturing processes to build their brands and ensure consumer loyalty.  As supply chains affect a growing number of communities in China, companies operating supply chains in a sustainable manner can also build stronger and better relations with national, provincial and local governments while giving back to the communities they serve.

"Integrating socially responsible practices into companies' supply chain management has multiple benefits.  Our latest Viewpoint clearly shows that companies who are successfully doing so curb rising costs while achieving regulatory compliance objectives and building strong brands, as well as contributing to sustainable development in China," said Brenda Foster, president of AmCham Shanghai. "AmCham Shanghai member companies set great examples in this area.  We applaud their efforts and hope their practices will be emulated by a wider range of companies in China."

Bradley A. Feuling, Chair of the AmCham Shanghai Sourcing and Procurement Committee, and CEO of Kong and Allan Consulting noted, "Many companies must recognize globally that their supply chains impact numerous communities in China. By integrating socially responsible and sustainable practices into the China supply chain, these companies will significantly improve their success in China and around the world, through increased government and customer brand support. Importantly, combining CSR and supply chain can also offset increasing costs, ensuring that the supply chain itself remains viable."

The Viewpoint shares best practices and highlights recommendations from three key components of the supply chain: sourcing & procurement, manufacturing & operations and logistics & transportation for companies looking to integrate socially responsible practices in supply chain management, including:

• Reduce maverick purchasing. Pressures to meet deadlines often result in purchases that go around standard procurement policies, increasing costs while impacting sustainability goals.
• Use all resources at hand. Using scrap material and recycling cuts direct costs and lowers waste production and costs associated with waste removal.
• Coordinate energy consumption. By coordinating and planning for high energy consumption production periods ahead of time, energy usage may be reduced.
• Focus on quality management. Lowering production error rates helps to lower machine utilization, material usage and can create energy savings.
• Consolidate logistics and documentation. Align production plans, delivery schedules and the information flows through documentation. Companies can reduce logistics spend while also helping to achieve government CO2 emissions and paper usage reduction targets.
• Use smart packaging design. Integrating the packaging design into a logistics plan, including packaging material inputs and logistics spent, can reduce material requirements such as paper and increase cube utilization.

About AmCham Shanghai

The American Chamber of Commerce in Shanghai, known as the "Voice of American Business" in China, is the largest and fastest growing American Chamber in the Asia-Pacific region.  Founded in 1915, AmCham Shanghai was the third American Chamber established outside the United States.  As a non-profit, non-partisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.

Visit www.amcham-shanghai.org for more information about AmCham Shanghai.

AmCham Shanghai's Viewpoint

AmCham Shanghai's Viewpoint series provides AmCham Shanghai members, U.S. and Chinese government officials, media and other opinion makers with timely and insightful analysis and perspective on key business trends, issues and policies that impact today's business environment in China.

Each Viewpoint focuses on an industry sector, a governmental policy or an issue impacting the American business community in China and will be managed as a "living document", regularly modified based on current events or emerging perspectives.

Viewpoint includes an overview of the issue or policy being covered, a description of how it impacts the business environment in China, relevant statistics, resources for additional research  and specific, actionable recommendations, best practices or guidelines for AmCham Shanghai members and targeted policymakers.

Viewpoint content is developed by AmCham Shanghai Committees, membership, staff and outside contributors as appropriate.

The 2011 Viewpoint series publications include:

U.S. Export Competitiveness in China: Driving Exports in America's Fastest-Growing Overseas Market
Financial Services in China: Capitalizing on the World's Fastest Growing Market
Healthcare in China: Diagnosing the Challenges and Opportunities in the China Market
Agriculture in China: Boosting American Opportunities in the World's Largest Market

Visit www.amcham-shanghai.org/viewpoint for the 2011 Viewpoint publications. 

SOURCE American Chamber of Commerce in Shanghai