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Sourcing Responsibly in an Evolving Landscape
27th August 2020
NOTE: This session will be recorded for post-event sharing via amfori’s online communications channel. By joining this webinar, you are agreeing to be recorded.
Moderator and Speakers
(Moderator)
4
AgendaTime Items
10:00 – 10:05 AM Introduction
Moderator: Joyce Chau, amfori APAC Director
10:05 – 10:15 AM Recovery prospects for Asia and medium-term economic trends
Speaker: Ms. Sian Fenner, Lead Asia Economist, Oxford Economics
10:15 – 10:25 AM Responsible Sourcing Strategy vs Business Challenges in 2020 and Beyond
Speaker: Mr. Samuel BOUILLÉ, Head of Quality Assurance, Metro Sourcing
International Limited
10:25 – 10:35 AM Responsible Sourcing Amidst Changing of Supply Chain Landscape
Speaker: Mr. Adrian Bahnerth, Head of Department Sustainability & Quality
Assurance, Migros (Hong Kong) Ltd.
10:35 – 10:45 AM Thoughts on Social Sustainable Sourcing, Retail Armageddon and the
COVID-19 Pandemic
Speaker: Mr. Alex Young, Group CEO, TexRay Industrial Co., Ltd
10:45 – 11:00 AM Q&A
5
Asia Economic Outlook
August 2020
Sian Fenner
Lead Asia Economist
Asia: Recovery prospects for Asia and medium-term
growth prospects
Fastest and sharpest decline in history
7
-120
-100
-80
-60
-40
-20
0
20
40
60
80
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Vietnam
Thailand
Source : Oxford Economics/Haver Analytics
Asia: Tourist Arrivals% year (3 month moving average)
-10
-5
0
5
10
15
20
25
Asia: Industrial production
Source : Oxford Economics/Haver Analytics
% year, 3mma
Pace of recovery will differ across countries
8
-10
-5
0
5
10
15
2019 2020 2021
Asia, GDP growth %, year
Source : Oxford Economics/Haver Analytics
Asia well placed for further trend growth
9
0
10
20
30
40
50
60
1980 1990 2000 2010 2020 2030 2040 2050
India
Indonesia
Philippines
Malaysia
Thailand
China
Asia: GDP share of US, market exchange rates
%
Source : Oxford Economics/CEIC
Forecast
Global supply chains fragility creates opportunities
82
64
58
47
19 18
9 86 5 5
0
10
20
30
40
50
60
70
80
90
2005
2019
2029
Asia: Average annual earnings, US$ per employee'000s
Source : Oxford Economics/Haver Analytics
10
RESPONSIBLE SOURCING VS BUSINESS CHALLENGES2020 AND BEYONDSamuel BouilleHead of Quality Assurance
August 2020
© METRO Sourcing International Limited. Classification level: public
12
290 STAFF 844 SUPPLIERS 22,200 ORDERS
Dusseldorf
Shanghai
Hong Kong
Ho Chi Minh
IndiaPakistan Bangladesh
Istanbul
office
sub-agent
WHO WE ARE? METRO SOURCING
THE SOURCING ARM OF METRO GROUP
2020 A YEAR OF CRISIS
Supply crisis in Asia
Large scale lockdowns in major sourcing countries(China & India)
Productions on hold Reduced/no access to factories (Audit/inspections, buying trips)
Logistics disruptions
Shortage of key supplies in high demand (masks, gloves)
Demand crisis in Europe
Large scale Lockdowns in major selling countries
Closure of restaurants and hotels
Panic buying
Home office and change of consumption habits
Recovery in Europe
Slow re-opening of hospitality sector
Touristic rebound at reduced scale
General Economic contraction in EU (-9% GDP in 2020)
Hospitality small businesses at risk of insolvency
JAN FEB MAR APR MAY JUN JUL AUG SEP
13
CRISIS CONTINGENCY PLANS
3 Golden principles
1 – SAFETY of employees and Customers
Maintain hygiene and health protection in stores and all facilitiesEnsure sufficient supply of protective gears to employees (30 millions masks)Flexible work whenever applicable worldwide (strong remote IT support)
2 – SUPPLY to satisfy the demand without compromising quality
Stick to long term partnerships (no order cancellation)Daily monitoring of factories capabilities throughout lockdownOpen alternative sources when neededApply flexible logistic approaches in transit and warehousingReinforce risk based approach for due diligence activitiesSpot offers to customers (commodities on high demand)
3 – PRICE under control
No opportunistic pricing adjustmentsNo recovery at the expenses of our customersClose monitoring of price development
14
BEYOND THE CRISIS THE EXACT SAME AGENDA ON SUSTAINABILITYBUT TO BE FURTHER PUSHED
15
CONTACTSamuel BOUILLEHead of Quality Assurance
METRO Sourcing International Limited20/F, Skyline Tower, 39 Wang Kwong RoadKowloon Bay, Kowloon, Hong Kong
www.metro-sourcing.hk
Responsible Sourcing Amidst Changing of Supply Chain Landscape
Speaker: Mr. Adrian Bahnerth, Head of Department Sustainability & Quality Assurance, Migros (Hong Kong) Ltd.
• Durability of global trade agreements
• Protectionism
• national corporate laws on transparency
• Climate Change
• Pandemics
• Ressource Scarcity
• growth in new markets
• new customer groups
• global to local supply-chains
• offline / online
• Personalization
• on demand economy
• fast delivery
Responsible Sourcing Amidst Changing of Supply Chain Landscape
26.08.2020 | 18Migros-Genossenschafts-Bund | Migros Hong Kong Ltd.
• smaller order-volumes
• shorter lead-times
• smaller supplier-portfolios
Shifting Consumer Demands
Impact
Changing Demographies
Unforeseen Disruptors Trade and Transparency
• aim for self-reliance in key industries
• need of resilient supply-chains
• inshoring
• focus on components
• broad-based supply-chains
• higher tarrifs / export-import limitations
• Less influence on local policies of trade-partner
• Prohibition of a procurement destination
Drivers
Trade and Transparency
• access to policy makers
• managing IT / AI
Unforeseen Disruptors
• predictability
• investment costs
• Limitation of the scope of activities
Changing Demographies
• human migration
• local industry- / working-standards
Shifting Consumer Demands
• maximum margin / lowest price approach
• Building and maintaining long-term partnerships
Responsible Sourcing Amidst Changing of Supply Chain Landscape
26.08.2020 | 19Migros-Genossenschafts-Bund | Migros Hong Kong Ltd.
Challenges
Trade and Transparency
• Involve in dialogue with authorities and
governments
• join joint initiatives and make a difference
• supply-chain transparency with IT / AI
Unforeseen Disruptors
• investment in sustainability
• risk mitigation with IT / AI
Changing Demographies
• Supply Chain Transparency
• GO ‘beyond auditing’
• steer the impact
• join forces
Shifting Consumer Demands
• responsible sourcing practices
• Buyer awareness with transparency
• collaborative, same level cooperations
with supppliers
• promote sustainable ‘purchase nudges’
Responsible Sourcing Amidst Changing of Supply Chain Landscape
26.08.2020 | 20Migros-Genossenschafts-Bund | Migros Hong Kong Ltd.
Approach
Q&A
