Mapping the natural rubber supply chain from processing factories up to smallholders: Michelin implements RUBBERWAY®

After publishing its sustainable natural rubber policy in 2016, Michelin – one of the world’s leading buyers of natural rubber – has launched RUBBERWAY®, a mobile application designed to map Michelin’s natural rubber supply chain and assess suppliers’ practices in different geographical areas.

In 2016 the Michelin group, one of the world’s leading buyers of natural rubber, published its sustainable natural rubber policy and committed to zero deforestation procurement: ‘By all reasonable means, the Group ensures that the natural rubber it uses comes exclusively from plantations that fully comply with the "zero deforestation" principles’. You can visit Michelin’s website to get an overview of its responsible management of the natural rubber supply chain.

The natural rubber supply chain’s structure makes traceability and transparency considerably challenging to implement. 85% of the world’s natural rubber production is produced by 6 million smallholders, each possessing less than 4 hectares. Before reaching traders and manufacturers, natural rubber goes through one or several of the 100,000 dealers around the world, and then through one of the 500 processing plants. Therefore, the questions remains: how can we reach every smallholder and ensure they respect the company’s commitments?

As an initial step in this direction, Michelin launched RUBBERWAY in July 2017. RUBBERWAY is a mobile application designed to map Michelin’s natural rubber supply chain and assess suppliers’ practices in different geographical areas. The application uses a questionnaire that each direct supplier must complete before passing on to all actors up the supply chain as far as smallholder level. The RUBBERWAY mobile application was developed by Michelin in collaboration with Smag and BSR

Efforts were made to make comprehensive questionnaires and to adapt them to four supply chain levels: factory, intermediary, smallholder and estate. Each questionnaire is composed of 40 to 50 questions, and take approximately 25 minutes to answer. Questionnaires are available in Thai, Bahasa, English and French.

The results are summarised in a dashboard, presenting information in four categories (social, environmental, agricultural practices, supply chain traceability & transparency) together with a global measure of performance. Results are then aggregated geographically, allowing Michelin to locate hotspots according to each theme. The RUBBERWAY application ensures confidentiality for every direct and indirect supplier.

Michelin tested the application with an Indonesian and a Thai supplier. All of Michelin’s suppliers are now required to apply RUBBERWAY in their operations. The next objective is to define and implement adapted action plans in identified areas to address gaps in compliance with Michelin commitments. This will allow Michelin to undertake engagement activities with suppliers and with the support of the different stakeholders, including governments and third parties. WWF is already supporting the RUBBERWAY project.

By January 2018, more than 1000 questionnaires were completed. Full implementation, will require effective cooperation between intermediaries and the involvement of staff at factory level to manage the administration of questionnaires. Michelin’s target to map 80% of the supply chain by 2020 is certainly a bold ambition, but the feedback so far is positive. All participants  were willing to complete the questionnaire and seemed to have a sound understanding of the need for this kind of initiative. Deployment is moving fast in Indonesia and West Africa and is now also starting in Thailand. The two limitations considered now are the availability of smartphones and the affordability of the fee that Michelin will require from suppliers in order to roll out this system at scale.

This initiative could be an effective way to reach smallholders, and to better understand and improve their social, environmental and agricultural practices. It is also an opportunity to involve the whole sector and share this tool with other natural rubber buyers. Tyre manufacturers are often buying from the same production companies and their respective sources. If most were to use RUBBERWAY, supply chain transparency could efficiently be achieved industry-wide.