Logistics Concept, Japan Institute of Logistics Systems

Japan Institute of Logistics Systems. Logistics Concept - Seeking for the Enhancement of Corporate Value - What is logistics? Logistics is the management which synchronizes such providing actions as procurement, production, sales, and distribution with demands. It aims to enhance corporate competitiveness and increase corporate value by realizing fulfillment of customers’ satisfaction, cutback of unprofitable inventory and minimization of its transfer, and reduction of supply costs. To achieve those objectives mentioned above, collaboration of companies concerned is essential and development of logistics using supply chains is strongly required. Environmental Changes Surrounding Corporate Management and Important Logistics Issues. Important logistics issues surrounding corporate management include globalization and reduction of environmental load, assurance of safety and ease of mind, response to a low birthrate and an aging population. We need to address these issues from a logistics point of view. 1. Important Logistics Issues Surrounding Corporate Management. (1) Logistics and Management. Such providing actions as procurement, production, sales, and distribution were managed based on sector-specific evaluation indicators in the past. These optimum activities for individual sectors resulted in significant managerial losses including stock shortage, and excessive or bad inventory. Under the circumstances where synchronization of providing actions with trends for demands was required in order to eliminate such losses, logistics as management optimizing the entire providing actions developed. In logistics, all the providing actions function to synchronize with trends for demands. For management, logistics is required to contribute to gain in profits by cutting down supply costs, and the reduction of assets by lowering inventory. It is important to assess it using ROA (Return On Assets) and/or others as the preliminary index/indexes. Accumulation of this kind of effort may establish such business models that could produce new demands from a logistics point of view. (2) Logistics and Globalization. Recently Japanese companies have actively deployed manufacturing bases overseas. Such globalization of corporate activities has been supported by IT represented by the Internet and logistics. The establishment of systems and structures quickly responding to changes by visualizing worldwide production and inventory through the utilization of IT is crucial in realizing efficient global supply chains. The international distribution connecting each function and player of globally conducted procurement, production, and sales also plays an extremely important role. There has been a great expectation for the advancement of 3PL (3rd Party Logistics) businesses as a counterpart of global SCM (Supply Chain Management). In the globalization of corporate activities, efficient and seamless logistics is necessary and when it is realized, it would make a huge contribution to corporate competitiveness. (3) Logistics and Environment. We are responsible for passing a global and local healthy environment as the most important asset in our society over to future generations. To fulfill our commitment, we need to place maximum priority on the harmony with the environment and to establish logistics which aims at reducing environmental load such as global warming, air pollution, waste, noise, and vibration, and creating a recycling-oriented society. It is important to broaden our perspective to material selection and waste disposal methods, and to consider reuse and recycling as well. (4) Logistics and Securing of Compliance. Since logistics is a foundation which supports not only economic activities, but also people’s lives, the viewpoint of providing safety and ease of mind to consumers is essential. Therefore, the important issues include: securing of safety by eliminating accidents during transportation and by strictly complying with proper product handling procedures throughout distribution processes, and pursuing ease of mind such as with the development of the product traceability system and/or others. It is necessary to implement a safe and efficient international distribution mechanism in response to the enhancement of international security after the 9-11 terrorist attacks. (5) Logistics, and Human Resources and Working Environment. Logistics is regarded as the infrastructure supporting economic activities and people’s lives and has an important role. Personnel with professional knowledge and a wide range of comprehension are required to establish and operate logistics. As for management, a CLO (Chief Logistics Officer) should be assigned as a member of top management to perform comprehensive planning and control of logistics such as procurement, production, sales, and distribution. Systematic training for personnel engaging in logistics practical operations is also an important issue. With a continuing tendency of a low birthrate and an aging population, it is necessary to improve the working environment and find a solution to the diversification of working styles, and it is obvious that education is required to make individual persons involved in logistics feel proud of their jobs which contribute to a society, and to enhance the quality of work. 2. Issues and Perspective Addressed by the Industry - From the viewpoint of the practical area - The advanced logistics systems are vital to establish totally optimized SCM. Industrygovernment-academia collaboration is strongly required, but the role of the industry implementing logistics is significant among them. The following is the presentation of issues and perspective which the industry is required to address.