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Logistically speaking

To make operations smarter, cheaper and more environmentally friendly, Toshiba Logistics turns to data warehousing.

by Yoshihiko Izumoto

From left to right: Ko Itoi, group manager, Logistics Engineering Group, Logistics Engineering Division of the Toshiba Logistics Corporation; Naoto Yokoyama, president, Toshiba Logistics Consulting Corporation; Tatsuo Iwaya, chief specialist, Logistics Engineering Planning Group, Logistics Division of the Toshiba Logistics Corporation

When you're solely responsible for shipping, handling, distributing and storing everything from consumer electronics to heavy electrical machinery for a global corporation, you've got a complex and demanding job. If you're Toshiba Logistics, the sole in-house logistics company for the Toshiba Group, you turn to data warehousing and Teradata to help.

Toshiba Logistics deals with products ranging from precision machinery to consumer electronics, from atomic energy to batteries. Currently, there are on-site systems appropriate for each distribution structure and each division has data accumulated within its own main system. To use such a vast and dispersed collection of data for real-time management control, the data must be consolidated in one place—the Teradata Warehouse.

In 1988, when Teradata was introduced at Toshiba Logistics, the logistics industry was undergoing a shift from demand for high-volume shipments to lower-volume shipments. Toshiba Logistics itself was under mandate at the time to reduce costs while providing logistics information to customers, a combination that required rapid, informed management decisions. To effectively address these challenges, they invested in data warehousing.

Toshiba Logistics required a data warehouse that would comprehensively manage various data on inventory shipping orders, shipments/returns, deliveries/receipts, billing/deposits and customers. Such a broad range of data meant it would be impractical for one person to be in charge of it all. Instead, it was important for all necessary information to be shared and available throughout the division. Implementing the data warehouse would also create an environment in which a field site could deal with issues on its own, an approach that would accelerate the management decision-making process.

Naoto Yokoyama, then group manager of the Logistics Engineering Group within the Logistics Division of Toshiba Logistics, took on the task of implementing the data warehouse. "With the trend of IT shifting from conventional host computers to open systems, there arose business needs to capture the current status of management issues in real time," says Yokoyama, who is today the president of Toshiba Logistics Consulting. "For that purpose, infrastructure must have the capability to build up and analyze raw data, which was a challenge that the data warehouse could solve."

Data warehousing in action
The company defines real-time management as the mechanism to deliver information rapidly and openly without waste, and to build a data model for use within the business. In the view of Toshiba Logistics, the purpose of assimilating raw data is to speed up management decision making.

The fact that the data is raw is key to the solution. Before Toshiba Logistics implemented the data warehouse, each division operated its own main system because data requirements and business processes differed from division to division. Some divisions needed only summarized results, for example, while such information often would not make sense to other divisions.

The objective became to make unprocessed raw data available throughout the company, using the Teradata Warehouse. By accumulating raw data in a data warehouse without processing it, Toshiba Logistics created an infrastructure of pure intelligence for corporate decision making.

The implementation of the Teradata Warehouse depended on a planning group, led by Yokoyama. The planning group vigorously supported education and training for end users, as designed by the Information Systems Division. The decision to discontinue existing output—which had the potential to bring objections from on-site staff—was made as a corporate decision.

Toshiba Logistics ships a variety of products, from precision machinery to consumer electronics.

Tatsuo Iwaya, who supported the project as part of the planning team, is the chief specialist of the Logistics Engineering Planning Group in the Logistics Division. He paved the way for introducing the data warehouse within Toshiba Logistics. "The data warehouse was the first tool for use by all the employees," he says. "We put our effort into making sure everyone would understand how this would be a useful system for the users."

The biggest challenge was aligning the existing terminology within the systems, particularly the front-end systems connecting to the data warehouse: manufacturing may use the term "product," for example, while sales uses the term "commercial product." By standardizing these terminologies, the full operation of the system became attainable.

With access to the intelligence infrastructure for massive assimilation of corporate data, many end users, including back-office divisions and site supervisors, started to search, analyze and use the data in conjunction with issues—the data warehouse became known as "the data infrastructure for taking action."

At the same time, management began to use the data warehouse to improve strategic decisions through the use of accurate data, as well as to identify previously unavailable indicators of success.

The introduction of the data warehouse had more concrete effects, such as reducing the need for ledger sheets. The data warehouse eliminated the need for:

	23 out of 36 books covering operations check documentation
	six out of 17 books containing documentation for shipment/delivery companies
	23 out of 52 books for monthly control/analysis documents

In all, the data warehouse allowed Toshiba Logistics to cut 52 books of documents monthly—220,000 pages—for an annual savings of around $1.5 million.

The data warehouse's good reputation within the company drove up the numbers of users and demand for access to the system. The burden on the system increased, but no significant problems occurred, thanks to the system scalability. The consistent architecture of the Teradata Warehouse helped increase the level of system application, easily utilizing past data assets.

Earth-friendly operations
The data warehouse now plays other important roles within Toshiba Logistics. Its usage has enhanced route design, reduced costs and even assisted in the engagement and management of environmental issues.

Let's start with a look at route design. Before introducing Teradata, it was necessary to input and process data that had been collected on paper as delivery reports before designing routes. The burden of such manual work required about three months to optimize the routes. In contrast, route optimization can now be finished in only one or two weeks since all the data necessary for route design is available from the Teradata Warehouse.

The fact that the data is readily accessible there has a huge impact on performance. The results appear in every aspect of the business, including the actual data for each branch. This example on route design involves the collection of data as it is generated; analyzing the data requires a business intelligence (BI) tool.

Toshiba as a group is committed to the reduction of carbon dioxide (CO₂) and nitrogen oxides. The company aims to bring gaseous emissions under control by improving load efficiency and using rail transportation where possible, while cutting costs at the same time. The analyses performed by the Teradata Warehouse help them make the decisions to achieve these goals.

The company optimizes load efficiency by analyzing data on the types of trucks and their capacities, as well as on shipping volume and destination. With regard to the modal shift, which lets the company take advantage of the efficiencies of volume transport, Toshiba Logistics accumulates cost data, capturing its monthly and yearly railway usage.

Concerns existed that railway transportation was unsuitable for the transportation of precision machinery due to the effects of radio waves and movement and poor load efficiency. In spite of these factors, through experimentation and diligence, the company increased its railway transportation rate by a factor of three compared to the rate before the introduction of the Teradata Warehouse.

Into the future
Ko Itoi, group manager of the Logistics Engineering Group, Logistics Division, who assumed responsibility for logistics IT technology from Yokoyama, intends to take full advantage of Teradata's capabilities. "Factory and distribution-center work is based upon optimized individual systems. We, a logistics company, should be an entity that helps them function well," says Itoi. "Our dream is to connect operating bases all over the world flexibly through the use of information data."

At Toshiba Logistics, individual in-and-out store-control systems operated at 40 bases throughout Japan are gradually shifting into a period of renewal. Along with that system renewal, the company intends to build an architecture that implements a unified logistics policy by collecting in-and-out store data in the data warehouse at the head office.

Toshiba Logistics is also going to initiate the use of ABC (ranking analysis) for product control. Although products, prices and features vary, the company intends to capture everything as a cost in the Teradata Warehouse.

In the years since the data warehouse became operational, the experts at Toshiba Logistics have learned much about what can be done with broad access to a single view of the business. Using the intelligence infrastructure of the Teradata Warehouse, they are always striving to find new ways to improve performance. T

Yoshihiko Izumoto is the author of an online IT magazine, editor-in-chief of IT magazine and president of Right-Seven Co.

Photos by Kanzo Kitagawa.

© Teradata Magazine-June 2006

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