33rd APEC Transportation Working Group Tokyo, JapanOctober 10-14 2010

The restructuring of supply chain management via APEC initiative

Presenter’s Name: Mr. Takayuki HIRABAYASHI

Economy: Japan

1. Current problems of international logistics

2. Value of visibility

3. Challenges of establishing a visibility platform (1) (2)

4. Public and private scoters’ cooperation

5. Key points for Supply Chain Visibility

6. Supply Chain Visibility Initiative

ContentsContents

Scope of outsourcing: difficult for shippers to control the process

In addition, under economic globalization, production and sales all over the world will involve the management of a greater number of trade lanes and, hence, involve a greater number of entities.

WarehousingCustoms ／Container

loading

International transportation

ProductionCustoms ／Container

unloadingWarehousing

Delivery ／sales

Inland transportation

１

Phones, fax, and e-mail are means of communication normally used to send and receive information.

Shipper / ConsigneeTruck company

Customs broker

Ocean carrier

Production

Safety stocks

Delivery ／sales

Safety stocks

Man-hours Excessive Safety Stocks

In anticipation of uncertainty that may exist in the performance of transportation, there are excessive safety stocks at every stage of the process.

Current problems of international logistics

Reduction in consolidated stocks

lead-time to be reduced by 1.1 days on average

consolidated stocks to be reduced

by 1.6 days’ worth of stock on average

Establishment of a visibility platform to share cargo movement information between entities involved in the supply chain will have following effects.

Reduction in workload

The number of inquiries and an anticipated reduction therein by the

establishment of a visibility platform

　　　 ・ exporting workloads to be reduced by 9%~30%

　　 ・ importing workloads to be reduced by 10%~25% Shippers and forwarders can expect that 30%~60% of the work in the

process that has not yet been automated

2

Value of visibility

※According to the questionnaire survey conducted by the Ministry of Economy, Trade and Industry in 2009

3

Individual item(Layer0)

Package(Layer1)

Carton/tote box(Layer2)

Pallet(Layer3)

Container(Layer4)

Vessel(Layer5)

Production

Wrapping

Transship-ment

Warehousing

Transship-ment

Container Vanning

Inland transportation

Ship loading

Ocean shipping

Ship unloading

Customs

Customs

Inland transportation

Container Devanning

Inspection

Warehousing

DeliveryInspection

Sales

Production plant Warehouse Container Yard Vessel Warehouse Inland transportation

Cargo /transport materials

Logistics facilities / environment

Logistics process (stages)

Challenges of establishing a visibility platform （１）

EPCIS proposed by GS1 Ensure interoperability among standards currently used Set an operational rule; a data set, code structure

PlantContainer terminal

Customsof the

exportingside

Ocean-going vessels

Containerterminal

Customs of the

importing side

Warehouse

Production system RFID Customs system AIS TOS Customs system RFID

Production management

Salesmanagement

accountingmanagement

Shipper

Operationmanagement

Accountingmanagement

Logistics trader

Internet

Customsrepository

Shipping companyrepository

Terminalrepository

Customsrepository

Terminalrepository

Logistics provider

repository

Shipperrepository

DB DB

Information to be shared

Systemized code

EPCISStandard interface

4

Challenges of establishing a visibility platform （２）

※EPCIS: Electric Product Code Information Services

Private Sector

Manufacturers: Canon Inc., Toshiba Logistics Corporation

Logistics providers: Deutsche Post DHL (forwarder) NYK Line (shipping company)Shanghai International Port Group (port operator)

System vendors: Oracle, Japan IBM

Public Sector

Customs: Peru, Chinese Taipei

Transport: Japan (MLIT), China, South Korea (MLTM),EU Commission

Science: Hong Kong, China

Economy: Japan (METI), South Korea (MKE),

Standards organizations

WCO

UN/CEFACT

GS1

Visibility Platform

5

Public and private scoters’ cooperation

Technology• Visibility platform architecture (EPCIS network)• Technical specifications• Technologies for capturing data• Database• Query method

Information sharing• Data set to be shared• Structure of codes to describe cargo movements

How to promote the implementation• Port-to-Port implementation• Collaboration with customs systems• Eventual provision of door-to-door services from the original shipper to

the consignee• Response to the needs of specific industries

Best practices• Pilot outline / system composition • Practicality of a visibility platform• Verification of the effects of improvements in supply chain management

 6

Key points for Supply Chain Visibility

CY 2010 CY 2013

1. Strengthen business competitiveness

2. Reduce the burden on the environment

3. Achieve both security improvement and trade facilitation

Workshop collaborating

with other fora, such as TPTWG/SCCP

Pilot Project among economies as the BEST

PRACTICE

APEC Guideline

CY 2010 ~ 2012

SOM1@Hiroshima・ APEC ICT Global Value

　　 Chain Workshop, ECSG

SOM2@Sapporo・ Supply Chain Connectivity

Framework, CTI

SOM3@Sendai・ Supply Chain Visibility

　　 Workshop, SCSC　・ Supply Chain Connectivity 　　 Action Plan, CTI

7

Based on “APEC Supply Chain Connectivity Framework Action Plan for Chokepoint 6”

Supply Chain Visibility Initiative