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.)

Chapter-03.

Restructuring Operational Processes from the Recipients’ Standpoint 
Reduced Total International Procurement Costs by Some 23%

After accepting YPC's proposal, Company A was able to shorten export lead time just as planned and reduce the number of staff involved in export documentation to one-third of the original force. Company A also tightened its management over tier-two manufacturer delivery deadlines by using YPC's systems. For these reasons, YPC's solution received strong marks from Company A's Tokyo head office.

After the success of these operational reforms, YPC's President Egashira and others paid a visit to Company A's local subsidiary in Asia. Yet, they soon found that feedback showed their solution was rather lackluster. A major reason behind this response was that a component ordered in Tokyo after Company A's local subsidiary received an order from its customer required on average a total lead time of 68 days from when it was ordered until it was actually delivered.

Several days' production time is an unavoidable fact for a special order product that is manufactured upon request. However, information communication, administrative processes and international logistics took more than thirty days beyond the tier-two manufacturer's lead time of production. Around 20 days is required to process exports for ocean freight, which meant lead time could be reduced by the remaining 11 days. After discovering the needs of the recipient, Company A's overseas subsidiary, YPC went back to the drawing board to come up with an improved solution.

Thanks to discussions with persons in charge at Company A's overseas subsidiary, Egashira already had an idea of where to start. That is, lead time could be reduced by enabling the overseas subsidiary to transmit information to YPC's Export Factory directly, without having to first pass through Company A's Tokyo head office.

YPC worked alongside the management team of Company A's Tokyo head office to come up with a solution. The answer was found in adding a function, Shipment Instruction Direct, to the EASY system. The new solution makes it possible for Company A's overseas subsidiary to be directly notified when its ordered components arrive at the Export Factory. This also enables the overseas subsidiary to place a shipment order directly through EASY.

This in-depth solution that changed Company A's operating processes helped the company pursue other efficiencies as well. Company A was able to reduce its administrative workforce in charge of enforcing delivery deadlines on tier-two manufacturers by half. It also was able to cut irregular air cargo shipments by more than 80%.

What is more, throughout this entire process, Company A has spent little in the way of new investments. This is because the cloud-based EASY system requires absolutely no initial implementation costs. Even when accounting for the system usage fee, the total cost of Company A's international procurement has been reduced by some 23% compared to before.

"This taught me that the real challenges facing the global distribution of components can be found by standing in the shoes of the ordering party, or the recipient," says Egashira as he looks back at his experience. "Initially, we focused on providing a service that would satisfy the shipper. However, the real customers in procurement operations are the recipients. Therefore, if you can't please the recipients, then you can't enhance the satisfaction of your client."


  • 01
  • 02
  • 03
  • 04
  • 05
  • (Previous)  A Business Model That Evolved from the Packing Business
  • (Next) Sales Support Derived from Procurement Support

<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.