A Culture of Inclusion

Previewing this year’s ACCJ-Kansai Diversity and Inclusion Summit Series

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Shaping workplace culture and inclusion. Leading the change. These are the themes of the 2022 ACCJ-Kansai Diversity and Inclusion Summit. Following the same format that debuted to great success in 2020, three two-hour online sessions will be held over successive weeks in October and November, each with its own keynote speaker, small-group discussions, and practical training.

The format was born of the pandemic, when organizers had to adapt the normally daylong program to a world of virtual interaction. It proved highly successful. The online format opened up access to people throughout Japan, and registrations rose from 224 for the previous year’s in-person event to 320. Similar results were repeated last year. Not only has accessibility been boosted, but the extended interactions also strengthened the summit’s impact and benefits.

With such success, the committee has decided to stick with the three-day series, and this year will host sessions on October 4 and 18, as well as November 8.

The first day will focus on gender diversity and equality, and will feature a training session with Jennifer Shinkai, an ikigai and inclusion facilitator and coach. The main session for the day will be led by Tetsuya Ando, founder of Fathering Japan, the non-profit organization he started in 2006 to focus on supporting fathers who are balancing the responsibilities of work and home.

The second day will feature a discussion of cultural diversity and inclusion with Nissan Corporate Vice President Catherine Perez, while Day 3 will explore psychological safety in sessions hosted by Google.

The series will be a wonderful opportunity to share personal and professional experiences in advancing D&I in Japan and abroad, including strategies that can be employed individually, at work, and in the community at large. Additional coverage can be found on the Digital Journal website following the sessions.

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Learn more about this year’s summit series.

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An Evening in the Windy City

The ACCJ Charity Ball returns for an in-person celebration of Chicago

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One of the most popular dates on the social calendar each year is in December. That’s when the American Chamber of Commerce in Japan (ACCJ) hosts the annual Charity Ball. Since the onset of the coronavirus pandemic in early 2020, the exciting gathering has been pushed online. But this year, the winds of change are blowing. On December 3, we’ll unplug from virtual space and step back to a more analog era as we gather at the Hilton Tokyo in Shinjuku to celebrate the Windy City itself: Chicago.

Despite being virtual, the 2020 and 2021 galas brought great fundraising success. But there’s no substitute for the vibrant atmosphere of a live event. So, the ACCJ Charity Ball Committee, in partnership with the ACCJ-Kansai Community Service Committee, has been hard at work to bring the Charity Ball back, live and in person.

The theme will offer attendees a chance to experience Chicago—from food to music to spirits. And don’t worry, there’s no prohibition here! We hope you’ll dress the part and bring back the chorus lines of Chicago or that Blues Brothers look made famous by John Belushi and Dan Akroyd.

Community Support

While the Charity Ball is great fun, and a chance to close out the year by celebrating with friends and networking with business associates, it’s also an important opportunity to raise money for the local community. As the chamber’s biggest fundraiser of the year, the Charity Ball supports the ACCJ Community Service Fund, which provides assistance to recipients for whom relatively small donations have a significant impact.

This year, the selected charities focus on at-risk children—including homes and programs for these children—as well as the homeless and citizen science.

These charities include:

• The Mike Makino Fund
• The ACCJ Community Service Fund
• YMCA/ACCJ Ohisama Camp
• YouMeWe
• Children’s Shelter Okinawa
• Safecast
• Kansai Food Bank
• Minna no Gohan
• Kurumu

You can learn more about these charities on the ACCJ website. Details about the entertainers, food and drink, and the ever-popular raffle will be added as we get closer to the event.

Sponsorships are also available and are a great way to highlight your business while making a real difference in the community.

We look forward to seeing you on the streets of Chicago and toasting the return of the in-person Charity Ball!

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December 3, 2022
Hilton Tokyo, Shinjuku

Tickets and details: accj.or.jp/charityball

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No-Show Charity Ball

Annual ACCJ gala offers a chance to give through virtual raffle and auction

Last year, the coronavirus pandemic made planning one of the biggest dates on the American Chamber of Commerce in Japan (ACCJ) calendar difficult, and the Charity Ball Committee (CBC) rose to the challenge with a successful online event that raised more than ¥7.4 million—topping the 2019 gala.

Despite the hope that 2021 would see a return to the traditional format, it was once again impossible to plan such an event. But as a cornerstone of the chamber’s fundraising for community support, the Charity Ball remains a top priority and the CBC has organized a fun and exciting online auction and raffle which will run December 1–11.

“Though much has changed over the past year, what remains consistent is ACCJ members’ passion for supporting and contributing to the communities in which we live and work,” said ACCJ President Jenifer Rogers. “Each year, we are grateful for ACCJ members’ enthusiastic and generous participation in the Charity Ball. This year is no exception.”

Charities

The CBC and the Community Service Advisory Council select several charities to promote, publicize, and support each year with the funds raised through the Charity Ball. Favored are smaller non-profit organizations (NPOs) with specific needs that work to help the homeless and support women’s issues, children, education, and US–Japan relations. Three NPOs to which the ACCJ donated in 2021 through the Community Service Fund are:

• Hands On Tokyo, which focuses on children’s homes, disaster relief, and those with special needs
• Mirai no Mori, which creates life-changing outdoor programs for abused, neglected, and orphaned children in Japan
• Save Food, which provides cooked food through Commune, a cafeteria where people can have meals together and connect

This year, the chosen charities focus on the homeless through the long-established Mike Makino Fund, which supports the Sanyukai homeless shelter as well as the Franciscan Chapel Center and Tokyo Union Church rice programs.

Money raised through this year’s Charity Ball will also support the ACCJ Community Service Funds for Tokyo and Kansai, which traditionally help our communities through food banks, local children’s homes, and programs that assist these shelters for at-risk children and women. For the first time, the ACCJ Kansai chapter is collaborating with the Tokyo chapter on fundraising through the Charity Ball.

“The Community Service Fund is an important part of our charitable giving as it enables us to respond quickly to urgent needs and emergencies that come up,” explained Barbara Hancock, who chairs the CBC and works each year with vice-chairs Lori Hewlett and Kevin Naylor to plan the big event.

Community

Many great entertainers have lent their talents to the Charity Ball over the years, including:

• Steve Gardner
• Felix Sonnyboy
• Kevin McHugh
• Erika Abe
• And more to come!

Due to restrictions on public gatherings, many have lost the opportunities to perform and make a living during the past two years. The CBC would like to highlight them this year and hope that you will support them as they recover from the pandemic.

Likewise, restaurants that have supported the Charity Ball, including Soul Food House and Devil Craft, have also faced businesses challenges, and the CBC encourages you to help these beloved members of our culinary community.

Auction

Singer-songwriter Felix Sonnyboy, in collaboration with artist Erika Abe, is auctioning off a one-of-a-kind, hand-painted sunflower-themed ukulele. The price for this item will include a one-hour ukulele lesson with Sonnyboy and a one-hour painting demo with Abe.

Together with Rambling Steve Gardner—a Charity Ball favorite—Sonnyboy is also presenting a private acoustic concert. The duo is offering either a performance at your office event or home party or a workshop/concert for your service organization, club, or school.

Gardner is also making available some of his amazing photographs from the Old South that are in his book Rambling Mind, which traces the blues across Mississippi in stunning black-and-white imagery.

Art lovers will be thrilled by a major offering organized by 2018 ACCJ Volunteer of the Year (Kansai) Royi Akavia, who is a long-term supporter of ACCJ featured charity Food Bank Kansai. For this year’s auction, Akavia and his companies—Double Bounce Productions, Inc. and KOA Production, Inc.—have arranged a donation which includes art by both himself and six other artists: DAAS, Eamon Harrington, Clifford Land, Roberto Mitrotti, Dorit Schwartz, and Shlomo Tuvia. A curated selection will be available for bid.

More enticing auction items are expected between publication of this issue of The ACCJ Journal and the start of the event. Join us!

While the No-Show format is a departure from the traditional year-end gala, it builds on the great success of last year’s virtual event and offers even more opportunities for ACCJ members and their guests to support the chamber’s mission of helping the community and those in need.

“We look forward to your support for our charities and those who continue to struggle through the prolonged pandemic,” said Hancock. “Please watch our website for updates. We look forward to your participation!”

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Entrepreneurship in Japan and Beyond

Oak Lawn Marketing co-founder Robert Roche shares his personal journey

When entrepreneurs consider entering the Japanese market, often they eye the nation’s capital as their starting point. The allure of Greater Tokyo, with its population of more than 35 million, is strong. But ask American Chamber of Commerce in Japan (ACCJ) Vice President-Chubu Robert Roche where you should start and he’ll invite you west, to the city of Nagoya.

It was there that the entrepreneur, investor, civic leader, and philanthropist got his start building businesses, and he believes that the capital of Aichi Prefecture, in the central Japan region of Chubu, remains one of the best places in the country for entrepreneurs.

He expanded on this while also sharing his personal business journey on September 3, during an event hosted by the ACCJ-Chubu Programs Committee. The virtual session was a one-on-one discussion between Roche and his longtime friend and ACCJ-Chubu External Affairs Committee Co-chair Michel Weenick. Together, in 1990, they helped found the American Business Community Nagoya (ABCN), a hub for the US and greater international business communities in Nagoya. The ABCN became the Chubu chapter of the ACCJ in 2000.

The Magic of Nagoya

Roche joined the session from China, where he currently invests and does business in addition to his US and Japanese endeavors. But he remains very involved in Nagoya. In 2018, he returned to Oak Lawn Marketing, Inc., the company he co-founded with Tadashi Nakamura almost 30 years ago, as executive chairman and president.

Although Oak Lawn Marketing, and its Shop Japan e-commerce brand, are well known today, their start is sure to inspire burgeoning entrepreneurs. Roche shared the story.

Recalling those early years after university, when he had recently married, he explained: “My wife’s family is from Nagoya, and they didn’t want me to be anywhere else. So, I had this constraint of needing to figure out something to do. I didn’t know what to do, but [whatever it was] I needed to do it in Nagoya.”

He soon met Harry Hill, a current ACCJ governor who has long been a leader in the Chubu community as well.

“Harry and I became partners pretty much the second day after we met, in 1990. He had his own business, and I had my ‘business’ that really wasn’t a business—it was just me kind of doing stuff,” he shared. “Then he and I formed H&R Consultants together, and that was really the beginning of a successful creation of a business. We are very complementary. He’s very good at stuff that I’m not very good at, and I’m very good at stuff that he’s less good at.”

Roche said that’s how he got started on the entrepreneurial front. At first, they made just enough money to survive. But after expanding H&R and earning a bit more, he got into the import–export business.

On Air

Initially, Roche was importing Tiffany products and L.L. Bean bags. His partner, Nakamura, being a local with lots of connections in Nagoya, was able to set up some meetings with a local TV shopping company.

“In the early 1990s, there was this show called Waku Waku Terebi Shoppingu. They would tape a one-hour program once a month and run it over and over on 25–30 stations. We were lucky enough to secure a four-minute spot for Tiffany,” Roche recalled.

Soon he found himself selling Tiffany items on television in Japanese—a stint that his mother-in-law enjoyed critiquing—and the seeds for Oak Lawn Marketing and Shop Japan were planted.

As a result of these appearances, Roche gained a reputation for having access to the country’s TV shopping market. One day, in 1992, he received a call from a company in Canada that was selling all sorts of products on CNN. Viewers around the world could call a local number in their country and order items such as the now-famous Didi Seven stain remover. But not in Japan.

The company saw Roche as their path into the market. They told him that he needed to have a call center, a fulfillment center, and all sort of other things.

“I didn’t have a call center. I didn’t have logistics ready. I didn’t have anything,” Roche recalled. “I said, ‘Sure we got it, we’re gonna go, you just let us know.’ And then they said that we had to make a minimum order. I asked how much, and we just scrambled to get the money together. And we ordered all this stuff.”

At the start, Roche and Nakamura just ran calls through their tiny 100-square-meter office. They stored products there as well. The calls started rolling in, and the business grew. Doing fulfillment from the office wasn’t easy. “One of the products was a stepper machine, and some days we’d send out 100. We were landlocked, trapped in the office until the Sagawa guy came and took the boxes away,” he remembered.

“If I was a better planner, I would have had all that stuff in place before the first call came. But we just had to adapt. And that was good, because we learned every key part of the business. The very beginning, that was fantastic.”

Accelerated Growth

The business grew incrementally until they were bringing in about ¥1.5 billion per year. At that point, something different was needed to take the next step.

“As entrepreneurs, we love chaos. We love to be the hero. We love for there to be a problem and then come in and solve that problem,” Roche said. “H&R Consultants kind of went through this. Harry and I ran it, and then we brought in John Coomes to run it, and then Scott Reid, and then Harry went back to the States and did a big development. When he came back in 2004, there really wasn’t a spot for either of us at H&R anymore.”

So, Hill joined Oak Lawn Marketing and this, Roche said, is when things really began to take off.

“The company didn’t need a firefighter anymore; it was getting pretty standard. We had a nice foundation, but what really moved it [to the next level] was that Harry just took over and he banged it out,” he explained. “I think that, from an entrepreneur’s perspective, there is always that time when, as a founder, you have to hand off.”

Fast-forward to 2017 and Hill handed back the baton. “But he gave me a much bigger platform than I gave him,” Roche said.

Making Connections

For the success they have had, Roche credits the environment of Nagoya and the easier access to top executives compared with Tokyo.

One of the things he said was most important to him about being a young entrepreneur in Nagoya was the access to people whom he never would have met in Tokyo.

“There were all these real leaders of Japanese industry who we had access to. We never did business with those guys ever, but we learned from their demeanor, and they told us little things like, ‘Don’t say it that way.’ You would say something [in Japanese] and they would kind of twist their head and you would think, ‘Oh, that’s not the way to say that,’” he recalled. “It was this almost subliminal teaching from true leaders [that helped], and we never would have gotten access to that caliber of leader in Tokyo. The big business guys of the ACCJ in Tokyo do, and now we do. But then? No way.”

To make the most of such opportunities, Roche advises entrepreneurs to learn Japanese.

“If you think you can do this without speaking Japanese, you can—you can be that unicorn—but I’ll tell you right now, it’s better to speak Japanese,” he said.

That’s because it’s the unplanned conversations you end up having with people whom you didn’t plan to meet that can make a difference and lead you down unexpected—and fruitful—paths.

“Learn Japanese if you’re going to do business in Japan, because there are all these seasoned guys like Nakamura, who could not have communicated with me in English. And I learned from that guy. That’s what really made a difference.”

More Advice

“Hire planners.” That was Roche’s tip when Weenick asked if he is a better planner today than he was 30 years ago, when he dove right into the pool of TV shopping. Often, entrepreneurs feel as if they can do it all. But to really succeed requires surrounding yourself with those who are more skilled in areas where you are weak, just as Hill and Roche complement each other in their business endeavors.

“My plan, basically, is to hire people to run the business who are better planners than me,” he said. “I hire people who can plan and not react—because I’ll react for them.”

Then Roche gave his biggest recommendation: Don’t take no for an answer. “I was told no every day, 10 times a day. You can’t do that. You can’t do that.” It’s one of the realities of Japan’s very orderly society—with its resistance to deviating from exactly what has been laid out—that can be discouraging to those wanting to explore new ideas.

But he encouraged people not to let the little things that sometimes frustrate expats get to them. “There is a tendency to get a little bit negative on Japan,” he noted. “We’ve all sat through those complaint sessions. Why do they do this? Why is it that way? Why are a bunch of things out of our control? But, really, it’s the positive nature of this that we should focus on. Japan is a very, very good market, because things don’t change much. And the reality is that most people in Japan want to see foreigners succeed.”

To sum it all up, Roche looked back at how, perhaps by lucky chance, he was accepted into the local business community, the mura (village), as he called it, and why it’s important to become part of the group.

“If you hang out in the village long enough, you understand the rules and you just get incrementally bigger and bigger and bigger. And then you can diversify. I do a lot of business in China, and I do a lot of business in the States, but Japan is a really, really nice base, if you can keep it going.”

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HxD 2021

ACCJ drives innovation by bringing together startups and big pharma

Last August, the American Chamber of Commerce in Japan (ACCJ) announced Healthcare x Digital, an XPRIZE-style competition meant to spur industry-changing technologies and connect Japan-based startups with major pharmaceutical companies and public officials.

Driven by the ACCJ Healthcare Committee—with support from the chamber’s Kansai Chapter—the initiative is led by ACCJ Corporate Sustaining Members AstraZeneca K.K., Bayer Yakuhin, Ltd., Deloitte Touche Tohmatsu LLC, and President’s Circle Member Eli Lilly Japan K.K.

The inaugural event was a huge success, with 28 companies submitting proposals. Three finalists were selected from this pool, and each emerged from the December 1 Pitch Event with awards and prize money to help them continue development of their ideas. Honors went to:

• Bisu, Inc.: Best Innovation; the Moonshot Prize
• MediFrame, Inc.: Best Value Proposition
• MICIN, Inc.: Best Product

Great Opportunity

In a follow-up interview, Bisu Chief Executive Officer Daniel Maggs told The ACCJ Journal that participation in the Healthcare x Digital competition was important to them because “it matters for us to have validation and recognition from the medical industry, because we care very deeply about quality.”

Ryoichi Kusama, co-founder and senior vice president of MICIN, said that his company wants to help the medical industry change from within and become a player that can be trusted. Therefore, “the biggest plus is that it has expanded the collaboration with major pharmaceutical companies.”

And Mediframe CEO Atsushi Wada said that it meant a lot to him to be recognized by AstraZeneca, Bayer, and Lilly. “For them to see the potential in my company made me feel very pleased and encouraged.”

This year’s competition will once again bring together global healthcare leaders with top and emerging tech companies, entrepreneurs, and innovators in the search for new ideas.

Three Challenges

Healthcare x Digital 2021 will carry forth the goal of forging new partnerships and creating new solutions to solve Japan’s most critical community healthcare and individual patient challenges by focusing on three areas:

• Overcoming the urban vs. rural healthcare divide
• Reimagining the hospital of the future
• Empowering patients to own their healthcare

These areas tie into the digital transformation of society and can help Japan continue to take care of—and provide even better care for—all its citizens. Demographic and economic trends are creating a strong contrast between rural and urban regions, and these shifts will require Japan to adopt new healthcare approaches and solutions. One question being asked in this year’s competition is how digital technology can break down the boundaries of distance to provide great and uniform care for everyone, no matter where they live.

Of course, reform of the healthcare system puts great pressure on hospitals to transform themselves and make better use of tools and resources. Technology is certainly key to that makeover, but what are the most innovative digital levers that can open up those paths to greater efficiency?

Another important part of ensuring that the healthcare system remains sustainable is empowering individuals to monitor their own health. A great example of such a tool is Bisu’s home health lab, for which the startup won ¥1 million in funding at last year’s competition. The elegant and easy-to-use system supports a range of tests that anyone can perform at home, allowing early disease detection and providing a way for individuals to track their health and adjust their daily lifestyle habits and decisions.

Joining Forces

At the core of Healthcare x Digital is the goal of bringing together emerging players—who have healthcare ideas, but require partners—with established players looking for innovative ideas to solve healthcare challenges.

This is made possible through the Healthcare x Digital ecosystem, which comprises four groups:

• Innovators and startups
• Established companies
• Government organizations
• Academic and non-profit institutions

These public, private, and non-profit sector players join forces to deliver all the pieces required to envision and execute groundbreaking solutions.

In the private sector, startups often have innovative digital healthcare ideas, but they lack the partnerships to evolve them. Teaming up with established companies that have the resources to develop an idea and bring it to market can allow the startup not only to grow as a company, but to change the course of future healthcare.

In the public and non-profit sectors, government bodies are searching for solutions to long-term healthcare challenges, such as cost, quality, and access. They want to drive innovation, which can lead to economic growth, but how to drive that change is not always clear. Academics and research institutions have insights that can help effect change, and they need a way to translate this into real-impact non-profit organizations.

Pitch Your Idea

Healthcare x Digital 2021 began accepting submissions on July 1 and the deadline is October 1. Evaluation of submissions is set to start on October 5. Pitches will be evaluated according to the following criteria:

• Focus on patient and community needs
• Healthcare x Digital value proposition
• Need for an ecosystem to flourish

Everyone who participates in Healthcare x Digital will benefit from having their ideas reviewed by top executives from leading international healthcare and technology companies.

Those selected to participate in the Pitch Day will be invited to the full-day virtual event on October 14. Finalists will then take part in the HxD Ideas Day on November 11, a hybrid in-person and virtual event at which they will present to a panel of leading healthcare and pharmaceutical executives—all empowered to initiate business deals and new relationships on behalf of their global brands.

Monetary prizes will also be awarded, and the finalists will meet with senior executives from the organizing sponsors. Winning companies will receive mentoring and support from healthcare professionals and executives from organizing sponsors.

Join us to discover Japan’s most innovative healthcare ideas and develop partnerships to make them a reality.

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Sponsors

President’s Circle Sponsor

Eli Lilly Japan K.K.

Organizing Sponsors

AstraZeneca K.K. | Bayer Yakuhin, Ltd. | Deloitte Touche Tohmatsu LLC | i2.JP (Innovation Infusion Japan)

Contributing Sponsors

Dentsu | K&L Gates LLP | NRW Global Business | Omron Corporation | Trilations G.K. | Real Life Sciences

Supporting Organizations

City of Kobe | Embassy of the United States, Tokyo | Foundation for Biomedical Research and Innovation at Kobe | Global Venture Habitat | GVH#5 | LINK-J | Osaka Innovation Hub

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Do the Right Thing

Medline’s Tomo Hasegawa on the importance of ethics to business success

As the coronavirus pandemic unfolded in early 2020, supply chain disruptions put extreme pressure on many companies. The healthcare industry, in particular, struggled with a shortage of personal protective equipment (PPE), and procuring resources became a difficult—and sometimes risky—business for those in need, as some unscrupulous vendors took advantage of the situation.

For others, the crisis was a chance to show how strong ethics provide a solid foundation for long-term business success. One such company is Northfield, Illinois-based Medline Industries, LP, whose Japan president, Tomo Hasegawa, is scheduled to speak at an upcoming American Chamber of Commerce in Japan (ACCJ) event hosted by the ACCJ Independent Business Committee on November 4.

Topics he will discuss include supply chains and ethical sourcing, and The ACCJ Journal spoke with Hasegawa ahead of the event to find out how Medline weathered the Covid-19 storm of 2020 and what advice he has for leaders trying to make tough choices and guide their companies in a sustainable way.

Sudden Impact

Many of us watched the early days of the pandemic unfold on TV, as initial reports from China painted a confusing and grave picture, but one that felt far away. For Hasegawa, however, the reality of what Covid-19 would bring to the world was much closer.

“We were at the 35th Annual Meeting of the Japanese Society for Infection Prevention and Control, which was being held in Yokohama in February 2020,” Hasegawa recalled. “That was just after the Diamond Princess made its way into the port there. Having the ship right in the backyard of this major medical conference, which was all about infection control, made it very real.”

As the seriousness and widespread nature of the pandemic became clear, Medline began to look at how the situation might affect their business in Japan. Hasegawa said that their initial assessments underestimated the impact.

“We thought it might drive the sales of some PPE and were not thinking about changing what we would do in terms of strategy,” Hasegawa said. “Then, all of a sudden, the next stage of the crisis occurred and there was a business continuity scenario playing out. I don’t think anybody anticipated the entire country of China literally shutting down for two months.”

Supplies Stopped

China manufactures almost half of the world’s supply of PPE. With the source of so many medical supplies cut off, Medline had to quickly work with its Chinese partners to assess the situation and look at alternative ways of obtaining products, including qualifying new substitute PPE offerings.

Recalling the scramble for toilet paper that occurred in spring 2020, and the empty shelves that greeted panicked buyers, he said that Medline faced the same situation with medical supplies, as masks, gowns, and gloves “were literally being hoarded.”

As it turned out, the China supply situation, while acute and unprecedented, was just a harbinger of even bigger issues. China was able to get Covid-19 under control and mobilize its entire infrastructure so that, by the middle of 2020, most of its PPE factories had increased capacity to meet the ever-increasing global demand.

The real crisis turned out to be a shortage of examination gloves. Malaysia supplies 75 percent of the world’s nitrile (synthetic rubber) gloves. Unlike factories that manufacture non-woven PPE products, such as masks and gowns, those that produce examination gloves require significant capital investment and cannot increase capacity in a matter of months. Figuring out how to manage the supply chain was critical, but doing so was not as simple as finding a factory that could churn out PPE. For example, the nitrile gloves supply had a hard constraint and, despite all factories running 24/7, demand outpaced supply by 37 percent, according to the 2020 Personal Protective Equipment Market Report, published by the Health Industry Distributors Association.

“Medline is very proud of how we do sourcing to begin with. We’re very strong advocates of what we call ethical sourcing—we have a supplier code of conduct, for example—and there were certain companies and factories with which, even prior to Covid-19, we chose not to work,” Hasegawa explained.

“This is because we did not agree with how they went about producing products, making money, etc. Coronavirus literally brought out the best and worst of many companies. A lot of suppliers went into a mode that was pure capitalism—supply and demand at its extreme—as the demand skyrocketed,” he said.

Ethical Sourcing

Human rights issues in supply chains is a growing concern and is something investors consider when assessing how a company is doing in the social aspect of its environmental, social, and corporate governance, or ESG, efforts.

In August, Japan’s Ministry of Economy, Trade and Industry began a large-scale investigation into about 2,600 companies listed on the first and second sections of the Tokyo Stock Exchange to better understand where they stand on these issues and what support they need from the government.

Medline is a great example of how a company should approach the matter. Their Ethical Sourcing Program comprises 11 pillars, through which the company carries out its commitment to promote human rights. That involves setting expectations and requirements for its suppliers, assessing and investigating alleged violations, and empowering employees and suppliers with information and training.

The company undertook a comprehensive assessment of its policies and procedures in 2020, and its approach is guided by widely accepted international standards, including the United Nations Guiding Principles on Business and Human Rights.

Medline’s suppliers are obligated to ensure:

• No forced labor, human trafficking, and slavery
• No child and underage labor
• No discrimination and harassment
• Promotion of health and safety
• Minimal environmental impact

“These are standards that most companies would normally state, but I think the difference is that we put our money where our mouth is,” Hasegawa said. “We regularly conduct onsite social compliance audits, and we expand and update our supplier risk assessments on an ongoing basis.”

He added that there is a strong belief at the top of the family-managed business that the values which are important to the family should be important to the company. Medline’s stability and success show that the approach works. The company recorded $17.5 billion in worldwide sales in 2020 and has had 54 years of consecutive annual growth. In all but one, the growth was in the double digits.

Focus on Stable Supply

Hasegawa said that Medline’s strong buying power was a real asset during all of last year, as companies were scrambling to secure supply. Not only were they able to minimize price increases from various suppliers as the situation changed, but they were also able to secure much needed supply allocations for their customers.

“It certainly was challenging, not just for us but the entire industry,” he said. “The radical imbalance in supply and demand was unprecedented. Literally, on our supplier side, costs reached levels previously unimaginable. Masks went up by a factor of 16. Gowns and gloves went up by at least five times. That was our cost to procure the products. So, what do you do with that?”

As costs rose, Medline eventually did have to raise their own prices, but Hasegawa said that the way this was done makes him feel proud. “After making initial price adjustments to get the exam gloves business profitable again, we took a different approach where, if we got a cost increase of, say, ¥5 per glove, then we asked our customers to pay that same ¥5 increase. We did not take any incremental profit on top of that to our customer,” he said.

Covid-19 forced companies to make trade-offs. At Medline, the decision was to prioritize stable supply over growing the bottom line. “Our mission is to be a partner for healthcare providers so they can focus on providing care,” said Hasegawa. “We interpreted that as, ‘Don’t stop healthcare’ and focused all our energy on maintaining stable supply to our customers.

“In addition, multiple new customers were willing to pay a higher price to us for the much needed gloves. It was painful to turn away accounts who obviously needed help but we chose to prioritize protecting our existing customers over the opportunity to make more money,” he continued.

“Specifically for gloves, where the pricing truly went out of control all around the world, we saw some very unethical behavior; customers ended up getting something completely different than what they had ordered when they went outside the normal supply chain.” Customers purchased what they thought were medical-grade gloves from a new vendor and received substandard gloves. Even now, around the world, many hospitals are realizing they have stockpiles of inappropriate gloves and are having to replace them.

Medline, Hasegawa said, chose to protect their customers and make sure they did everything they could to ensure that customers received a steady flow of proper supplies. This meant minimizing, as much as possible, the financial impact of price gouging by unscrupulous vendors. This also meant educating customers on how to conserve usage of much needed PPE products such as examination gloves.

Making a Difference, Together

Japan is known for coming together in the face of adversity, and Hasegawa noted that there was very good cooperation among vendors and distributors. While most large companies moved to protect their own customer base, wholesalers worked together to ensure the supply was as stable as possible to hospitals.

“It was all about making sure we got life-saving equipment to the hospitals, to the doctors and nurses who depend on it,” he explained. “That singular focus on the mission to provide not just a service, but to protect the healthcare workers who were doing everything they could to save the lives of Japanese citizens, was very clear to us and, I believe, most of the industry followed suit.”

And that’s a big reason Hasegawa—who says he is fortunate that his personal values mesh with those of the company—believes so strongly in Medline and its role in healthcare. “That tone from the top makes it very, very clear that this is how we want to run the business. And waking up the next day, I always want to be proud of the decisions I made.”

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