Konica Minolta – the global electronics manufacturer – has considerable expertise in imaging, optical, sensing and printing products and services. It did, however, face a big challenge: producing such a broad and high tech product line for the Japanese market meant managing a complex logistics structure — and that was difficult, given its inhouse supply chain resources.
“With more than 100 logistics partners in Japan, we did not have enough resources to manage them all,” says Takashi Kurimoto, Director of the Supply Chain Management Center for Konica Minolta in Japan. “We needed one solution provider to manage them and optimize our Japan logistics operations. Our biggest priority was to lower our costs.”
So, in 2013, Konica Minolta contracted DHL Supply Chain (DSC) to be its lead logistics provider (LLP). Apart from performing a set of logistics services, Konica Minolta wanted DHL to apply expertise, resources and oversight to the company’s entire domestic logistics operation in Japan. Over the long term, DHL was also expected to implement lean logistics processes, cost management visualization and endtoend supply chain planning and design, with the ultimate aim of taking over control of Konica Minolta’s logistics sites in Japan.
Konica Minolta also wanted to increase its supply chain flexibility and resilience. “Our experiences with the natural disaster in Japan showed how difficult it can be to recover your supply chain after such an event,” says Kurimoto. “Also, when we change product design, we need those changes to carry through to our parts suppliers, which is always a challenge, particularly given the high velocity of an electronics supply chain.”
The LLP arrangement has already delivered significant benefits to Konica Minolta. “DHL has hit our firstyear targets to reduce logistics costs and expand services,” Kurimoto reports. “DHL Supply Chain has transformed our supply chain operation into a more controlled and efficient one by implementing various process improvements. We are very much satisfied.”
Other achievements include properly setting up a new distribution facility as part of restructuring the domestic distribution network; introducing quality improvement processes into DSC operations as a step toward optimizing warehouse operations; establishing more effective key performance indicator (KPI)based quality management; and reducing transportation costs by standardizing contracts and implementing shared trucking.
The success of this LLP arrangement isn’t just benefiting Konica Minolta long term; it has also spurred interest in strategic supply chain management outside of the company. “LLP was not so popular in Japan a year ago, but based on our experience, other companies that see what we are doing are studying it and starting to consider similar solutions,” says Kurimoto. — Rod Sweet