Yamato Group Solutions

Seamlessly Supporting the International Distribution Needs of Component Manufacturers  
Global Distribution Support Solution

Shortening Lead Time and Reducing the Cost of Procurement

Influenced by the appreciation of the yen, corporate Japan is currently accelerating the pace of its global expansion. Major manufacturers that have shifted their production sites overseas are already forcing strict business terms on their partner tier-one manufacturers in order to achieve globally-optimized procurement. However, nearly all tier-two manufacturers that supply components and parts to tier-one manufacturers have been left behind in Japan, meaning tier-one and tier-two manufacturers now face the challenge of procuring materials across international borders in order to maintain their supply chains. The Yamato Group's Global Distribution Support Solution helps these companies to build and expand their supply chains globally.  
(Reporting and editing by Nikkei BP Consulting Inc.)


A Business Model Evolved from the Packing Business  
Providing Access to Proprietary Facilities and IT Systems

In the world of international logistics, persons in charge of export packing, customs clearance and forwarding tend to be spread out between the company and different external parties. Consequently, an intricate and time-consuming "communication game" takes place between the administrative departments of shippers and specialist firms in charge of each of these processes, with methods such as Internet-based rationalization left unused.

Established in 1947 as an export packing provider, YPC was just another one of these specialist firms until about six years ago. Why did YPC decide to transform itself into a solutions provider for the type of component manufacturers mentioned above?

Actually, the Global Distribution Support Solutions was born from YPC's dealings with a machinery component manufacturer, Company A. YPC was responsible for Company A's packing operations for many years.

Company A is a tier-one manufacturer that provides specialty screws and fastener components to major manufacturers. The company expanded its operations outside of Japan more than 30 years ago, but most of its approximately 700 supplying tier-two manufacturers did not have the resources to follow it overseas. As a result, even though Company A had already established business overseas, it still had to procure many items from Japan and deliver them to the locally incorporated subsidiaries of major manufacturers around the world.

Company A mobilized a large contingent of staff to undertake these processes. Each day, the company would receive more than 1,000 orders from customers located in 10 countries. On top of this, product part numbers appearing in order documents varied by customer, so Company A first needed to translate these into the suitable format in order to send out orders to its several hundred tier-two manufacturers in Japan. Exchanging this information through methods such as facsimile, telephone and e-mail also consumed considerable time and labor.

While tier-two manufacturers promised delivery in 30 days, in reality, this time frame was often delayed. While it is easily understood that unexpected fluctuations in demand and other factors could delay delivery, the problem was that no one at Company A was properly managing delivery times after placing an order. Consequently, it was almost a daily occurrence for Company A to find out about a delay right before the scheduled delivery.

As a result, Company A's average delivery time from tier-two manufacturers was 34 days. Delays in delivery from tier-two manufacturers meant that Company A had to take irregular measures to keep its delivery time with its customers. This included using air shipping for products normally shipped by ocean freight to make up for the delay. Consequently, Company A's spending on air cargo reached upwards of 10 million yen.

Having learned of this situation, in October 2007 YPC moved beyond its scope as a packaging service provider by proposing a solution that made comprehensive changes to Company A's operations. This is because at the time YPC was in the process of creating a service that would transform it from a dedicated packing provider to a one-stop provider of export operations.

The proposal consisted primarily of two points.
First, YPC spent approximately 300 million yen building a facility known as the Export Factory in Ichikawa City, Chiba Prefecture. This facility was used to consolidate Company A's packing of parts to be shipped overseas, export document creation, and customs clearance operations, each of which had been handled by different firms previously.

Solution Diagram

YPC also developed EASY, a cloud-based IT system, in order to receive order data directly from Company A's overseas subsidiaries over an electronic data interchange (EDI), automatically generate export documents and manage logistics operations. This helped to reduce Company A's administrative burden and at the same time shorten the lead time of its exports.

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  • 04
  • 05
  • (Previous) Procurement / Sales Agency Services for Mid-sized Component Manufacturers
  • (Next) Restructuring Operational Processes from the Recipients' Standpoint

<Global Distribution Support Solution > 
Seamlessly Supporting the International Distribution Needs of Component Manufacturers

  • Chapter-01. 
Procurement / Sales Agency Services for Mid-sized Component Manufacturers
  • Chapter-02. 
A Business Model Evolved from the Packing Business
  • Chapter-03. 
Restructuring Operational Processes from the Recipients' Standpoint
  • Chapter-04. 
Sales Support Derived from Procurement Support
  • Chapter-05. 
Meeting the Expectations of a Component Manufacturing Cluster

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About the Yamato Group

The Yamato Group includes the following companies: Yamato Transport Co., Ltd., which has developed an express delivery network nationwide; Yamato System Development Co., Ltd., which develops and operates diverse IT solutions including data centers; Yamato Home Convenience Co., Ltd., which transports and sets up consumer electronics, household goods, and machinery that cannot be transported via express delivery; Yamato Logistics Co., Ltd., which specializes in domestic and overseas logistics outsourcing; Yamato Financial Co., Ltd., which provides settlement services; and others. These companies pool their talents, which encompass "information, logistics, and settlement", to provide optimal solutions from a comprehensive perspective to the problems of client companies.