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Hitachi

Hitachi Transport System

[Southeast Asia] Procrement logistics of precision equipment parts, holizontally rolled out to overseas

When setting up a production base in Thailand, our customer, a precision equipment manufacturer, chose a lump-sum outsourcing agreement with us regarding local parts procurement logistics, at the planning stage of the project. Capitalizing on our know-how and experience in Japan, we were able to design an optimal procurement logistics system in the region with the customer. We also responded accurately to changes in their logistics needs in the phased start-up period.

Customer's Challenges

CHALLENGE 1

Reduction of procurement logistics costs

When newly starting up their Thailand factory, reducing procurement logistics costs from the large number of vendors spreading over a wide area was an issue. They wanted to implement the Milk Run method which had led to efficiency in Japan.

CHALLENGE 2

JIT provision of production parts to the factory

While there was little storage space in the new factory, we needed to construct a mechanism to feed parts into production lines in synchronization with the production plan.

CHALLENGE 3

Phased start-up of production function

The customer planned to start up the production in several phases at the new factory. In other words, they needed a flexible logistics system, which was able to take into account changes in the types and volume of parts, including both imported and locally-procured.

How Hitachi Transport System Solved Them

SOLUTION 1

Rationalization through Milk Run

With the Milk Run method, where produced parts from multiple vendors are collected together as a base, we conduct many simulations aiming to optimize cargo routes.
We are working toward rationalization of the transport and delivery process to minimize costs.

SOLUTION 2

Set up our own XD center

We established a cross-dock (XD) center on our own near the customer's new factory. Through strategic location arrangement, it has become possible to achieve both efficient parts collection and JIT supply to the factory.

SOLUTION 3

Flexible support for start-up progress

We managed our cross-dock (XD) center operations in line with the customer's production status at the start-up. By flexibly adding the storage space, workers, and vehicles while controlling the costs, we provided dedicated support for the start-up period of the new factory.

Some More Facts about the Value We Deliver

With our extensive network in and out of Japan, we can provide solutions for you to cope with your global SCM challenges, building on our operational expertise as well as cutting-edge information technology (IT) and logistics technology (LT).

Milk Run procurement solutions using a XD

  1. We adopted our successful Milk Run procurement model with the same customer, by applying our operational expertise from Japan to the new overseas market.
  2. We constructed an XD center on our own, near the new factory, and enabled JIT supply also.
  3. We are continuously working to maximize the local operations efficiency, while matching the customer's business growth.

By letting us handle everything from system development to location operation, including delivery, you can concentrate your resources on the manufacturing function, which is your core business. We at the HTS Group provide support on the logistics front for your global business expansion.

Milk Run procurement solutions using a XD