Logistics Consulting to Identify Challenges and Optimize Procurement Logistics
From current-state analysis to strategy development and implementation support, we work alongside our clients to achieve total cost reduction.
Customer：Assembly and Processing Manufacturer
Challenge (Before)
The company operated two factories, with all component inventory consolidated and stored at Factory A.
Procurement logistics had been managed by component suppliers, but the company believed that taking direct control of these logistics operations could potentially reduce total costs.
Additionally, supplier deliveries tended to concentrate during specific time periods, causing congestion of delivery vehicles within the factory premises. This resulted in operational disruptions and highlighted the need for improvement.
Solutions
NX Solution
- Based on preliminary interviews, NX defined the entire procurement logistics system—including cost structures and delivery flows—as the scope of investigation and formulated an analytical approach aimed at optimization. Key analysis areas included workflow analysis, vendor location and delivery volume analysis, on-site interviews, and facility layout assessments.
- The investigation revealed that irregular deliveries managed independently by vendors were causing operational inefficiencies within the factories. Furthermore, the costs associated with component deliveries had not been fully identified, and storage capacity at Factory A was approaching its limits.
- As an improvement measure, NX designed a milk-run system for vendors making small-volume deliveries located near both factories. Through simulation-based validation, the required number of vehicles was calculated. For remote vendors and large-volume deliveries, a plan was developed to shift logistics control to the company while promoting consolidated transportation. In addition, NX proposed the development of a delivery information management system and the establishment of an external buffer warehouse near Factory B.
- NX supported the phased implementation of these measures, including the stabilization of milk-run operations, the launch of the delivery information management system, and the transfer of inventory storage to the buffer warehouse. Post-implementation effectiveness was also evaluated.
Benefits
Benefits (Results)
By introducing the milk-run system and restructuring the delivery framework, the number of inbound delivery vehicles was reduced by more than 80%.
Traffic congestion within the factory premises was eliminated, significantly reducing the workload associated with receiving and inspection operations.
In addition, transitioning procurement logistics to in-house management made previously untracked component delivery costs visible and enabled a substantial shift of inventory management expenses from fixed costs to variable costs.
The utilization of the buffer warehouse also resolved the storage capacity constraints at Factory A.
Through these improvements, the company successfully achieved a significant reduction in total procurement logistics costs.
