Procurement Logistics

Reinvent procurement logistics to transform monozukuri (manufacturing)

As globalization accelerates, so procurement logistics is being reinvented for the manufacturing industry. Despite this, many customers are now facing new challenges.
Take our assembly manufacturer customers who want to contract delivery lead times but want to avoid carrying an inventory. One option is to ask suppliers to operate a vendor-managed inventory (VMI) warehouse in the vicinity of the production plant, but for suppliers without any suitably located warehouses this represents a significant burden.
For our supplier customers, too, Just In Time Delivery presents a significant challenge. Can the supplier really be expected to operate as many VMI warehouses as they have customers? And if a supplier is delivering a high mix of parts to a single customer, that creates even more difficulties with transportation.
Alps Logistics can act as a bridge between both assembly manufacturers and suppliers who are struggling to optimize their supply chains. The solution for both categories of customer is the same: our procurement logistics service.

The challenges of procurement logistics

Three strengths enabling us to commit to production schedules

Alps Logistics boasts three distinct strengths that allow us to drive the reinvention of procurement logistics.
The first is what we call our enhanced network for consolidation. Using the warehouses we have established domestically and internationally, we operate cost-efficient consolidated services in the shape of our so-called “extended virtual milk runs”. This is procurement as only a logistics company with formidable freight capabilities can make possible.
The second is Just In Time Delivery. We use Alps Logistics centers, located in the vicinity of assembly manufacturer plants, to implement inventory control. This makes possible Just In Time Delivery, aligned strictly to production schedule, simply by issuing a shipment instruction.
The third is kitted delivery to production lines. When we deliver components according to the shipping instruction we've received, we're able to kit components for each production line. This reduces input processes for production lines and aids the creation of an environment in which the focus can be placed fully on production.
Delivering what is needed, when it's needed. This is the reality of the optimized logistics that Alps Logistics can provide. We are doing our part to reinvent procurement logistics for assembly manufacturers and suppliers alike.

BMI: a unique solution championed by Alps Logistics

As part of our procurement logistics service, we have developed a unique service for assembly manufacturers and trading companies. Namely, BMI: our buyer-managed inventory system.
As opposed to vendor (i.e. supplier) managed VMI warehouses, this system is operated by buyers (i.e. assembly manufacturers). At the core of the BMI approach is our ACCS warehouse management system, developed in-house by Alps Logistics. We link the buyer's core system to our ACCS to enable centralized control of the parts inventory. Components are then kitted for each production line, in accordance with shipping instructions based on production schedules and BOM (Bill of Materials), and supplied through Just In Time Delivery. By delivering components, previously delivered on an ad hoc basis, to plants in strict accordance with production schedules, Alps Logistics eliminates the need for plants to maintain their own warehousing controls for components, allowing customers to instead focus on their primary work of production.
For suppliers, too, having Alps Logistics handle the shipping means they are freed from the burden of having to arrange deliveries or arrange delivery vehicles.

The flow of BMI

Parts procurement reactive to the shift to overseas production

Alps Logistics offers its services throughout Japan and, thanks to our own international network, globally too. That's why we're able to offer our BMI service anywhere in the world. A good example of the service is an export warehouse serving overseas production centers.
The customer in this example had previously received deliveries of components and materials from some 1,000 suppliers across Japan to their own warehouses, from where they were exported to multiple production centers in line with production schedules. We thought that Alps Logistics could offer a better solution: namely, integrating all those components and materials into a single center that could the function as an export warehouse. Firstly, we would pick up items through both milk runs and trunk line transport in all necessary areas, via a solution we call our extended virtual milk run. These would be stored in one of our multi-functional logistics centers, which integrate domestic cargo warehouses and bonded warehouses, and then sorted by the transportation mode by which they would be shipped to one of the customer's multiple production centers overseas. This could mean sending them to a consolidated freight station (CFS) in the case of ocean freight or through drayage by loading the cargo into containers and driving it to the destination. Cargo to be sent as air freight would be first directed to Narita. Having multiple transport options is another one of our strengths.
The reality is that, today, monozukuri (manufacturing) is shifting overseas. But that's not a problem for Alps Logistics, since we are able to handle everything from domestic pick up to Just In Time Delivery to overseas production centers.

Export warehousing solutions regardless of pick up location or transportation mode