The importance of the construction of logistics system and the rapid progress of IT

It is generally mentioned that logistics cost accounts for about 5-10% of the total product costs. We can find that it occupies a large portion of the product cost, though it is sometimes overlooked.

In other words, it is directly linked to the raise of the profit ratio of the company to build a best-logistics system and to keep the cost appropriately.

Here, we would like to explain about the importance of building logistics system and the existing circumstances of the accelerating IT implements in the logistics industry.

The importance of Christmas Chicken and the building of logistics system

First, we will explain about the importance of logistics system in corporate activities by giving an example of “Christmas Chicken”.

Speaking of Christmas, Chicken with bones is the classic menu in the food industry.  And speaking of Christmas, Logistics is also the busy season. 

Please imagine what loss would be occur if in the case of that “successful importing chicken and passing the customs clearance, but unable to deliver by lack of getting carriers for distribution” or “wrong date of delivery by miscommunication”

An opportunity loss is taken as the largest loss.  It must be a large risk for the company that a massive amount of imported product can’t be available to sell being unable to deliver.  And simultaneously, it is also conceivable that causes a decrease of customers’ reliability.  

Conversely, no delivery loss, observance of delivery date, shortening and flexibility of lead time and no misdelivery, would not only prevent an opportunity loss but also make a stiff reliability, and have differentiation to other companies. Building of logistics, which tends to be postponed, assumes a very important role.

The progress of IT in logistics industries

Well, what would be good for how we are building the important logistics system? 

Nowadays, in the information society, IT technology weighs with all the industry, and it is no exception in logistics industry. For example, like ALIS of Ajinomoto Logistics Corporation or NDC of Daiichi Reizou Corporation, among tripartite relationship such as shipper, manufacture and warehouse, it is progressing to build the system for managing inventory, arrivals and shipping, and so on.

 

To visualize and to make sharable of the loading/unloading request, ordering, and inventory information that have been done manually up to now will lead to improvement of the work efficiency and cost reduction. It is considered that the implementation of IT system is essential to build an optimal logistics system.

Merged Companies of Logistics / IT to Omni-Channel Logistics

It is not rare that new companies are established in cooperation with IT industry and logistics industry as if it is symbolized that they are in a close relationship. The purpose is to reduce mistakes implementing IT where human error had occurred in analog way.

LSM has both sides of logistics IT and logistics operation, and innovates logistics work which has been depending on operation ability.

And also, these years, new initiatives are born by closely involving of IT and logistics. That is what we call “Omni-channel”. “Omni-channel” means to integrate various sales channels and distribution channel such as actual shops and/or online shops.

Through the total management of customer contacts such as online/offline stores, catalog sales, social medias, and DMs, it will be possible to facilitate the management of ordering and inventory. In Japan, Seven & I Holdings is proactive on Omni-channel logistics.

Logistics system to corresponding to variegated customer needs

Era has shifted to system management from analog. To keep up with variegated customer needs, being only with analog doesn’t make it. 

Systematization is essential to make faultless corresponding to customer needs. We need to pay attention so as not to delay the wave of the systematization of increasingly accelerating logistics industry in Japan.