The Ricoh Group is promoting SCM (Supply Chain Management) in logistics for procurement, manufacturing, and sales, aiming to reduce CO2 emissions and costs. The Ricoh Group’s manufacturing bases are now in the Americas, Europe, China, and other Asia Pacific countries, which has caused year-to-year increases in transportation among global production sites. For example, the monthly transportation volume of products and parts from China to Japan is enough to fill 400 40-foot containers. To the Americas and Europe, products and parts of a volume equivalent to 1,000 40-foot containers are shipped from China each month. Given these volumes, efficiency improvement in logistics is an important issue in promoting business on a global scale. The Ricoh Group surveys all processes and promotes efforts on a global scale, including the improvement of cargocarrying efficiency through reviewing packaging materials and mixed packing, modal shifts among warehouses, direct deliveries to customers, and by optimizing transportation routes through the introduction of the milk run system. The Group thus aims to reduce wastage related to packaging materials, transportation, space, trans-shipment, and storage.
CO2 emissions in logistics (FY 2012, Ricoh and Ricoh Japan Corporation)
• CO2 emissions in Japan (fiscal 2012 results) have been calculated in compliance with the Energy Saving Law.
I began to engage in activities to reduce the environmental impact of logistics operations in 1999, when our team implemented a joint project to create reusable packaging materials with the product and packaging design departments. As a result, we were able to develop “resource recirculating eco packaging” materials using resin. Subsequently we began work on full-scale packaging reforms, and have since been developing and promoting the use of unique packaging materials, such as eco-packaging materials for large machines and mini-racks to be used for delivery to households. We need to review the transportation methods if we want to reduce the use of packaging materials, which are designed to protect products during the transportation, transshipment and storage processes. In other words, we can transport our products with simple packaging—using only plastic wrap, for example—if we choose to and manage the appropriate transportation method for the products. In developing packaging materials, it was essential to visualize the entire logistics operations. We were able to achieve the “packageless” delivery of our products, such as delivering products simply wrapped in plastic, because we conducted activities targeting the entire logistics operations.
Reduction of packaging materials
In the middle of 2000, the use of cardboard for transportation between our production bases began to increase rapidly in accordance with the full-scale launch of the global production system.
Logistics operations are the “blood vessels” of the supply chain, which connect the procurement, production, distribution, and recovery operations. At least 10 departments are related to the logistics operations for each of the domestic transportation routes. For global transportation, the number of related departments (including outsourcing partners) is doubled, because legal regulations and commercial customs differ by region and the frequency of transshipment is higher. It requires a considerable amount of work to collect precise information about daily transportation activities from related parties and to check the actual logistics situation. However, once the logistics operations are “visualized,” we can easily identify what needs to be improved to reduce CO2 emissions and if we make the improvements, the effects will accumulate day by day, leading to substantial reductions in both CO2 emissions and cost.
In line with the three-year plan started in fiscal 2008, the Logistics Innovation Group has been conducting activities to minimize waste across five areas of packaging, transportation, space, transshipment, and storage, utilizing the ratio of logistics cost to sales, the use of cardboard, and CO2 emissions from transportation as major management indicators. From fiscal 2011 onwards, we will further promote activities based on the results of past visualization and reduction activities. By 2013, we aim to build a group-wide production and logistics system to always respond flexibly to requests from the procurement, production, sales, and service departments as well as to changes in the environment surrounding logistics, and to choose optimal packaging materials and transportation routes to ensure low-cost and low-emission logistics operations.
The Ricoh Group has production bases in five global regions (Japan, the Americas, Europe, China, and Asia-Pacific). In each of the regions, we have built a “local production and consumption” system. Specifically, in each region, our sales and production staff cooperate closely with each other to develop products and services that meet the true needs of local customers and to provide the customers with these products and services in a speedy and appropriate manner. Parts, semi-finished products and finished products are transported between these production bases, and the total transportation volume has exceeded the amount that can be transported using 20,000 40-foot containers. As part of its measures to promote logistics reform, the Ricoh Group has been endeavoring to visualize the loading efficiency of marine transportation containers used for its logistics operations.
Ricoh Electronics Inc. (REI), which is based in Tustin, California in the United States, has an assembly factory for copiers and a warehouse for finished products. The factory and warehouse had multiple contact points accepting cargos, and these contact points had different functions and delivery destinations. For marine transportation between Japan and the factory and warehouse, cargoes were delivered separately, although they shared the same location, because separate delivery was believed to be more efficient. However, by visualizing the loading efficiency of containers used for the transportation (a total of about 100 containers per month were used), it was revealed that the loading efficiency of containers used for transportation to some specific contact points within the site was low and that the efficiency was particularly low for containers used to transport large products.
In response, Ricoh and REI reviewed the flow of the logistics operations and the cargo handling in the warehouse, and made adjustments to shipments from the warehouse, shifting the focus from partial optimization by each contact point to total optimization. As a result, the companies decided to have parts and semi-finished products delivered to the assembly factory and finished products kept in the warehouse for delivery to a range of destinations transported in a mixed manner in a container, thereby improving the loading efficiency of marine transportation from Japan to the site.
As a result, the loading efficiency was improved by 10%, leading to substantial reductions in both the cost and CO2 emissions associated with container transportation. It is estimated that at least 30 million yen can be saved per year and CO2 emissions can be reduced by at least 700 tons a year through this improvement.
REI’s plant in Tustin, California, the United States
The Ricoh Group is committed to reducing the use of packaging materials through such activities as promoting “resourcerecirculating eco packaging.” Production printers, the largest products both in terms of weight and size among our imaging systems, were traditionally delivered to users on wooden pallets and packaged in cardboard. This delivery method, however, resulted in a high packaging cost and a large environmental impact. It also caused inconvenience to customers, because it took time for them to open the packages, and a sufficiently large space was also necessary. In addition to these problems, “resource-recirculating eco packaging” was not very effective for large products produced only in a small quantity by model in terms of both cost and environmental impact reduction.
In response, the Logistics Innovation Group launched a project for the “packageless” delivery of production printers. First, the team asked all the departments related to the transportation of the printers, including the product design, logistics, and sales departments to join the project. Then the team “visualized” the transportation routes and methods for each of the transportation phases to examine how to transport the products in a better way. For three days in early August, the team conducted a transportation test on a route from Tohoku to Kansai via Kanto (1,830 km). In this test, production printers and accompanying bookbinding units wrapped in plastic wraps and fixed on pallets by belts were transported. In order to prevent the machines from being damaged by the belt, cushioning materials were used as required and also sleepers were applied to prevent the products from sliding on the pallets while being transported by truck. The team compared the temperature and moisture in the truck between the tested method and the conventional method, and it was revealed that the peak humidity was the same for the two methods, the highest temperature was 2��C lower in the tested method, thus giving less thermal impact on the products.
Based on the test results, the “packageless” delivery of production printers was actually started, and since January 2010, the transportation area for which this delivery method is used has been gradually expanded.
This activity has led to a reduction in the cost of packaging materials used for production printers and (bookbinding units). Specifically, the cost was reduced by about 40,000 yen per unit, and the waste of packaging materials was also reduced by 115 kg, equivalent to 70 kg in terms of CO2 emissions reduction. Moreover, the time required for unpacking was reduced by as much as 70 minutes.
Implementing the packageless delivery
All packaging materials, except for the plastic wraps, can be reused, including the belts, REI’s plant in Tustin, California, the United States cushioning materials, and sleepers.
Ricoh Express (S.Z.) Warehouse Ltd., based in China, delivers parts, mainly from suppliers in Southern China to Ricoh Service Parts Centers in Hong Kong, Shanghai, Japan, North America, and Europe. Previously, Ricoh Express collected parts from different suppliers separately, causing low loading efficiency and needlessly long total travel distances for the vehicles. To address this issue, Ricoh Express introduced the “milk run” method, by which one trucktravels around to multiple suppliers to pick up cargo. To operate the milk run system effectively, the company developed a system to optimize vehicle routing, by checking shipment volumes with suppliers prior to collection, by telephone or dedicated network. This new initiative more than doubled loading efficiency, from 30% to 65%, and shortened total travel distances for transportation. In addition, for large cargo with a sufficiently high loading rate, the company began to operate direct transportation from suppliers to the port—without reloading at Ricoh Express warehouses. These efforts led to an annual reduction of 310 tons, or 35%, in CO2 emissions.
Improvement of loading efficiency by introducing milk run method