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Hitachi

日立物流ソフトウェア株式会社

“In order to strengthen the parts supply system for machinery that are active at construction sites around the world, we selected ONEsLOGI as the common infrastructure for the warehouse.”

Komatsu Ltd.

Warehouse Management System(WMS), Tablet Picking System

From the left of the photo,
Komatsu Logistics Co., Ltd., East Japan Logistics Department, Kanto Supply Center Management Section Manager, Kentaro Hisamoto
Komatsu Production Division, Oyama Factory, Production Engineering Department, Production Engineering Section, Chief Engineer Kazuyuki Suzuki
Komatsu Production Division, Oyama Factory, Production Engineering Department, Production Engineering Section, Yoichi Ino
Komatsu Information Strategy Division, Solution Department, Parts Group Project Manager Koichi Matsumoto

Komatsu Ltd.

Komatsu (Komatsu Ltd.) is globally restructuring and strengthening the spare parts supply system used by construction machinery provided by the company.
Hitachi Distribution Software “ONEsLOGI / WMS” (hereinafter referred to as ONEsLOGI) was adopted as the warehouse management system. The background and effects are as follows.

Index
  1. Komatsu's “Dantotsu Products” are used everywhere in the world
  2. Using ONEsLOGI at parts centers in Japan and overseas
  3. Improved operational efficiency, increased operational visibility, and reduced lead times
  4. Warehouse management system is selected on the assumption that it will be expanded to 18 distribution centers globally
  5. The majority of Komatsu members appointed the proposal from Hitachi Distribution Software
  6. Hitachi Distribution Software contributed to a smooth transition to the new warehouse
  7. Looking forward to the support and suggestions from Hitachi Distribution Software for future expansion

1. Komatsu's “DANTOTSU Products” are used everywhere in the world.

Hybrid hydraulic excavator "HB215-2" Dump Truck "HD785"

Photo above/Hybrid hydraulic
excavator "HB215-2"
Photo below/Dump Truck "HD785"
(Photos provided by Komatsu)

-Please briefly introduce Komatsu.

Komatsu is expanding various services and solutions with focus on the development of “DANTOTSU products” such as the world's first “hybrid hydraulic excavator” that uses both an electric motor and a diesel engine (according to Komatsu, there are 7 major commercial machines, as of May 13, 2008), and the “Autonomous Haulage System (AHS)” that automatically detects obstacles and transports ore.

Komatsu was established in 1921, and is a diversified provider of industrial-use products and services. While remaining an international leader in the field of construction and mining equipment, the Komatsu Group engages in other businesses, such as utility equipment (compact machinery), forest machinery, industrial machinery, logistics and other solutions-based operations.

Today, Komatsu's products are used everywhere in the world. There are more than 40 factories in globally, and distributors in about 150 countries. Overseas sales account for about 80% of sales, and more than half of Komatsu Group employees are foreign nationals.

2. Using ONEsLOGI in domestic and overseas parts centers

-Please tell us about the usage status of ONEsLOGI at Komatsu.

Currently, ONEsLOGI is used as a warehouse management system at the Oyama Plant and Hokkaido parts center in Japan, and parts center in Australia. ONEsLOGI has made it possible to handle the inbound and outbound of parts efficiently and accurately, while at the same time making it paperless.
As of Nov. 2020, ONEsLOGI is operated at Japan, Australia, South Africa, UAE, Indonesia, and USA.

Until now, at the Oyama Factory, the shipping slips were outputted from the ordering system, and it was manually sorted and distributed to workers. However, after the introduction of ONEsLOGI, tablet and barcode readers were installed, and instructions for shipping operation are now displayed on the tablet.

Also, we had to collect stubs of shipping slips after picking operation, and reflect them in the old system. But with ONEsLOGI, when the barcode read with the barcode reader, the data is shown on the tablet screen and registered into the system real time. In the event that the wrong barcode is read, an error will be displayed to prevent mispicking.

-Please tell us the inbound / outbound quantity, the number of parts which are handled, the number of employees, etc.

Information on the Oyama Plant's spare parts center is as follows:

小山工場の補給部品センターに関する情報
Items Summary
Number of parts handled Approx. 100,000 parts
Inbound Approx. 4,500 OL/day (OL:number of items ordered)
Outbound Approx. 11,000 OL/day
Target area
  • Mainly Tohoku / Kanto / Chubu
    (Responsible for about 40% of domestic shipments, “Inbound and outbound on the same day, delivery on the next day")
  • Overseas (By sea and air)
Number of workers Approx. 200 employees
Plant area Approx. 22,000㎡
Start of operation August 2014(start operation of ONEsLOGI with the opening of the new center which consolidated several parts warehouses in the Oyama Plant and Tochigi Plant)
Inside the spare parts center in the Oyama Plant (Photo left), high-rise rack installed in the center (Photo right)

Inside the spare parts center in the Oyama Plant (Photo left), high-rise rack installed in the center (Photo right)

3. Improve operational efficiency, visualize operations, and shorten lead times

“On-site operations can now be grasped in real time through the system” (Mr. Suzuki)

“On-site operations can now be grasped in real time through the system” (Mr. Suzuki)

-Please tell us about the effect of introducing ONEsLOGI.

The newly established spare parts center of the Oyama Plant is a warehouse that consolidated several parts warehouses that were dispersed within the Oyama Factory and the Tochigi Factory. Therefore, not only ONEsLOGI, but also the structure and operation of the warehouse have been streamlined.

In addition to the implementation of ONEsLOGI, Hitachi Distribution Software has also provided us with variety of proposals that lead to more efficient warehouse operations, so please allow me to explain about the synergistic effects of the system.

Benefit 1.
Improvement of operational efficiency

By using ICT devices such as tablets and other devices, the system eliminates the need to sort receiving/shipping slips, and picking/shipping for urgent delivery is smoothly instructed to the workers. The barcode system also reduces the number of mispicks and significantly improved the worker's efficiency.

Previously, the locations of overflow parts were manually managed. With ONEsLOGI, it is now possible to manage overflow parts in free locations, allowing for optimal placement of parts and giving priority to the efficiency of putaway and picking.

Benefit 2.
Operation visualization

Until now, stubs for shipping instructions that was picked have been collected and reflected in the system. Therefore, it was impossible to grasp the work status in real time, and it was not possible to respond to delays in advance.

In the new warehouse, it is now possible to track the progress of operations onsite in real time through the system. The work status can be visualized and objectively determined, and the workload can be distributed and equalized.

Benefit 3.
Reduction and optimization of lead time

By changing management by order date to delivery date, the progress of the work can be managed in real time, so it shortened the lead time and eliminated many situations that delayed delivery.

Specifically, for overseas shipments, the lead time in the center was almost halved, and a reduction of 5 days was achieved. As a result, it took an average of 10 days from arrival to container shipment, and we were able to shorten it to 4 days.

4. Warehouse management system is selected on the assumption that it will be expanded to 18 distribution centers globally

“We are working on strengthening the spare parts supply system for the entire group” (Mr. Matsumoto)

“We are working on strengthening the spare parts supply system for the entire group” (Mr. Matsumoto)

-Please tell us why the decision to renovate the warehouse management system.

First of all, the background of the renovation of the warehouse management system is to improve customer satisfaction by strengthening and improving the supply system of spare parts, and at the same time, increase the profitability of spare parts sales and aftermarket services. The aim is to increase the value of the Komatsu brand.

This is a global strategic effort not only in Japan, but it is a model case based on the assumption that it will be deployed at 18 distribution centers globally starting from the introduction at the Oyama Plant.

Therefore, it can be said that the renovation of the warehouse management system is not just a system replacement in one warehouse, but an effort as a part of strengthening the spare parts supply system.

-What are the aims of standardizing the structure of parts supply bases in Japan and overseas, including the warehouse management system?

It is inefficient to try to optimize at each site. Governance can be strengthened by establishing a “Komatsu Way” common to all parts of the world, as well as a common parts system, enabling swift horizontal development. In addition, there is no end to optimization, so improvements to the system itself can be reflected at each site without man-hours and time.

There is also an advantage that a common evaluation axis can be set by using a common mechanism. One of the aims is to establish a system that optimizes not individual sites but the entire system by setting global KPIs, measuring and analyzing work performance.

- What are the requirements to decide a warehouse management system?

The requirements to decide a warehouse management system can be summarized in the following points.

Requirement 1.
Realization of paperless and visualization

The old operations had the following problems and issues.

  • It takes time, effort, and a large amount paper to output large number of shipping slips.
  • There was many manual tasks such as issuing slips, sorting, and managing stubs.
  • Countless shipment errors due to worker mistakes.
  • The grasp of work status in real time.
  • The accuracy of the work plan, and it was not possible to optimize/manage the delivery date of the freight vessel.

Relying on paper slips made it difficult to improve such issues and increase work efficiency. The first requirement was to go paperless and promote the digitalization of the work environment. The system had to be able to visualize the status of the work while improving the efficiency of the work itself.

Requirement 2.
Customizable package software

Developing a system from scratch would require time, effort and cost. In this case in particular, the system had to be up and running in line with the construction schedule of the new warehouse, and it was essential that the system could be implemented within a specified period of time.

In addition, by aligning operations with a warehouse management system (WMS) that has a proven track record and sophisticated functions, we can expect the advantage of optimizing shipping and receiving operations.
We felt that the use of a customizable software was ideal because it would eliminate the need to discuss basic operating procedures and allow us to focus on defining and developing the requirements for functions that would be customized.

Requirement 3.
Support for global expansion

In addition to the fact that the system supports multiple languages, it was one of the requirements for selecting a warehouse management system to receive support for actual deployment of the system to overseas locations.

Requirement 4.
Linkage between systems

The warehouse management system must exchange data with the order management system. Although the system and situation varies depending on the location, the basic requirement for the system was that the warehouse management system can cope with it with minimal modification reducing the impact on the order management system side.

5. The majority of Komatsu members appointed the proposal from Hitachi Distribution Software

“Because it is a self-developed product, I thought it would be possible to expect flexible customization and quick  troubleshooting” (Mr. Ino)

“Because it is a self-developed product, I thought it would be possible to expect flexible customization and quick troubleshooting”
(Mr. Ino)

-Why did you select ONEsLOGI?

We decided to adopt ONEsLOGI based on a comprehensive evaluation of not only its functions and specifications, but also its ability to make proposals, track records, and support system. Among the proposals from several companies, the majority of the selected members supported the proposal from Hitachi Distribution Software.

The main selection points are as follows.

Selection points for ONEsLOGI

  • A vendor product specializing in logistics.
  • WMS covers all basic functions (no need for additional functions) and is highly complete.
  • The work status can be grasped in real time on the system.
  • System construction using a tablet is possible.
  • Tablets are easier to use than handy terminals, and can be installed and operated at low cost.
  • Minimal customization and enable short-term introduction.
  • Abundant operation experience, it is highly reliable and can be used safely for a long period of time.
  • Version upgrades are carried out regularly, to continually improve functionality.
  • Because it is a self-developed product, flexible customization and quick troubleshooting can be expected.
  • Supports multiple languages.

Selection points for Hitachi Distribution Software

  • A vendor specializing in logistics-related systems, with a wealth of experience, knowledge, and expertise.
  • Not only do they implement and build systems, but they also provide consultations on how to optimize warehouse operations.
  • Experience of systems implementation and development not only in Japan but also overseas, and are able to provide support for implementation at overseas locations.
  • They have a high level of understanding of your requirements and the ability to make proposals.

6. Experts who are familiar with the warehouse site help the smooth transition to the new warehouse

“I was very helpful because they were able to answer any questions immediately”  (Mr. Hisamoto)

“I was very helpful because they were able to answer any questions immediately” (Mr. Hisamoto)

-Please tell us about your evaluation of Hitachi Distribution Software.

First of all, with regard to system start-up, it was difficult to start operation smoothly without any major trouble during operation in my experience so far, but we were able to start operation on time because Hitachi Distribution Software took responsibility for the part of cooperation between the systems. I am really glad that we asked Hitachi Distribution Software.

The response to inquiries and requests was quick, and if there were any questions or doubts, I was able to receive their responses immediately, which was very helpful. The quick response was a great help to us as we needed to ensure that our service parts were shipped to our customers.

In addition, they have a good knowledge of the warehouse floor and provided us with accurate advice based on examples of other companies' workplaces and initiatives. As for the introduction at the Oyama Plant, we had to proceed with the design and construction of the system in parallel with the work to migrate and consolidate the divided warehouses into a new warehouse. By leaving the system aspects to experts, we were able to concentrate on the start-up of the new warehouse, which is what we needed to do.

-How was the expansion to the overseas distribution center (Australia)?

They sent an engineer who could communicate in English, so the relationship with the local staff was valued, and ONEsLOGI was successfully implemented. ONEsLOGI itself is operating smoothly and is a different system from the Oyama Plant. But cooperation with the order management system has also been improved, and is highly appreciated by the local workers.

It was also very helpful to have the Oyama Plant reflect the improvements made in Australia.

*As of Nov. 2020, ONEsLOGI is operated at Japan, Australia, South Africa, UAE, Indonesia, and USA.

7. Expectation to supports and suggestions from Hitachi Distribution Software for further expansion

-Please let us know if you have any requests or expectations for Hitachi Distribution Software.

In the future, the system will be expanded to other bases both in Japan and overseas. However, each location will have a different ordering system and a different warehouse configuration at the time of introduction. For example, in the case of the Oyama Plant, multiple warehouses were consolidated and relocated to a new warehouse, but in Australia, the logistics center management system was renovated along with the new warehouse architecture for the purpose of in-house production of outsourced warehouse operations.

Therefore, there are many expectations for the support and proposals of Hitachi Distribution Software. We look forward to the same prompt and courteous support in the future.

Komatsu (Komatsu Ltd.)

Head office
2-3-6, Akasaka, Minato-ku, Tokyo, Japan (Komatsu Building)
Representative
Hiroyuki Ogawa, President and CEO
Capital
Consolidated ¥ 68,689 million (based on US GAAP),
Non-consolidated ¥ 70,973 million
Employees
Consolidated 62,823, single 11,692
Businesses
Construction and mining machinery, utilities (small machinery), forestry machinery, industrial machinery, etc.
URL
https://home.komatsu/en/

*The profile is as of March 31, 2020 when translated into English.

*Interviewed in March 2016
*The department in charge is the name of the organization at the time of the interview.

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