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Streamlining the supply chain that goes beyond the corporate framework - Downsizing and downweighting in concert with the industry


  Nissui Logistics Corporation Anjo Logistics Center

The Nissui Group, led mainly by its Supply Chain Management Department, has been looking beyond the conventional framework of the "logistics division" and promoting efficiency based on a new concept of the "supply chain." As a result, the Group has achieved major success in reducing the environmental burden and reducing costs. However, in order to further broaden the effects of these initiatives, cooperation with the industry that extends beyond the corporate framework is necessary. It would also be worthwhile as an urgently needed measure against global warming to extend the know-how developed by the Nissui Group to the world stage. The Group is committed to making the Nissui standard the world standard.

Effects of downsizing demonstrated in processed salmon products

In January 2006, 16 members of the Business Restructuring Meeting Task Force of Nippon Suisan Kaisha, Ltd. (Nissui) gathered at the refrigerated warehouses of the Tokyo Logistics Center (now Nissui Logistics Corporation) with their tape measures in order to measure the cartons (outer boxes) of the 928 items of the Group. The size of the cartons impacts every aspect of logistics, from shipping efficiency and cost reduction of packaging materials to efficient use of refrigerated storage space, enhanced safety in freight handling, reduction of waste, and beyond, to the cutting of CO2 emissions.

The DS Project Team was born out of this research. "DS" stands for "downsizing." The first item to become the object of the Team' s scrutiny was the main product of the Group, processed salmon. The primary focus was the dimensions of the gridiron-shaped pallet that was used to load the cargo in the warehouse and during transport. Processed salmon products are manufactured by the Group company, Salmones Antartica, S.A. of Chile and placed in cardboard cartons that are stacked onto pallets and taken directly to cold storage by forklifts. Previously, however, the size of the cartons did not match the size of the pallets, so gaps and spaces formed between the cartons as they were stacked.

Therefore, the Team studied the dimensions of the pallets used both in Japan and abroad, and settled on the most commonly used size of 1,000 x 1,200mm. The Team calculated the size of the carton that would most efficiently fit on the pallet. Consequently, by downsizing the salmon products carton, it became possible for a single pallet to hold 63 ten-kilogram cartons whereas, prior to the DS, a pallet could only hold 59, representing an increase of four cartons.

Improved load efficiency through the review of the cartons for processed salmon products (10kg cartons)
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Distribution of processed salmon products
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The smaller carton eliminated the need for cushion materials, as well as the trouble of throwing away the materials for the customers. In case of ten-kilogram cartons, it means a savings of 38 yen per case for the cost of cushion materials. Moreover, the elimination of gaps and protrusions when the cartons were loaded onto pallets ensured more-stable stacking and contributed to greater safety in the storage workflow.

Furthermore, load capacity was improved by approximately 10% when the cargo was shipped on container ships from Chile to Japan. The improved load capacity, in turn, led to cost reductions and reduced CO2 emission.

Hisami Sakai, current Executive Officer and Commissioned Deputy Chief Operating Officer, who, as the SCO (Supply Chain Officer), led the DS in January 2006 and later became General Manager of the Supply Chain Management Department, recalls, "Previously, cartons were ordered independently by each manufacturing plant for each product, which meant that neither the product divisions nor the logistics division gave much thought to the shape or size of the cartons. In fact, when we first embarked on the DS, some did not feel the need to change what they had gotten used to, and it was no simple task switching over to the new cartons.

However, once the cross-sectional Business Restructuring Meeting Task Force took the lead and demonstrated the major effects generated through DS with the cartons for processed salmon products, DS initiatives began to spread to other products. Currently, product packages as well as cartons are being reviewed and, on a sales volume-basis (all product categories excluding marine products), 85% of the Group' s products have been subjected to DS.

Furthermore, in order to enable efficient loading of cargo, when determining the carton size of new products, design software has been introduced that has been input with the dimensions of the pallet, the sizes of truck rear-bodies and ship containers. Currently cartons are being designed for the purpose of achieving utilization rates of 90% in terms of the base area and 85% on the basis of volume. Logistics has always been one of the backbones of the Fisheries and the Food Products businesses. Especially as the supply chain surrounding the Nissui Group is time-consuming and involves vast distances, streamlining and improved efficiency in logistics can have massive benefits.

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