Case Studies > Outsourcing Generates Supply Chain Efficiencies

Outsourcing Generates Supply Chain Efficiencies

Customer Company Size

Large Corporate

Region

America
Asia

Country

United States
Vietnam

Product

Navisphere

Tech Stack

Electronic Data Interchange (EDI)
Optimization Tool
ERP System

Implementation Scale

Enterprise-wide Deployment

Impact Metrics

Cost Savings
Customer Satisfaction
Productivity Improvements

Technology Category

Functional Applications - Enterprise Resource Planning Systems (ERP)
Analytics & Modeling - Predictive Analytics

Applicable Industries

Transportation

Applicable Functions

Logistics & Transportation
Warehouse & Inventory Management

Use Cases

Supply Chain Visibility
Inventory Management
Predictive Maintenance

Services

System Integration
Cloud Planning, Design & Implementation Services
Training

About The Customer

Toshiba International Corporation’s Motor Business Unit (MBU) is a global leader in the design, manufacture, and sale of electric motors. With a production system extending from Japan to China and Vietnam to Texas, Toshiba’s MBU depends on flawless logistics processes to support their aggressive growth goals and maintain service and quality standards. In 2010, Toshiba moved some manufacturing for premium industrial motors from Houston to a factory strategically located near Ho Chi Minh City, Vietnam’s international port. The new Vietnam plant was planned to ship up to 1.2 million motors a year to the global market. Toshiba’s MBU in Houston sought to resolve cost and service failures with their incumbent logistics provider and needed a highly efficient, collaborative supply chain relationship to support their growth goals.

The Challenge

With a global footprint and production system extending from Japan to China and Vietnam to Texas, the Motor Business Unit (MBU) of Toshiba International Corporation’s (Toshiba’s) Industrial Division depends on flawless logistics processes. In 2010, Toshiba moved some manufacturing for premium industrial motors from Houston to a factory strategically located near Ho Chi Minh City, Vietnam’s international port. With plans for the new Vietnam plant to ship up to 1.2 million motors a year to the global market, Toshiba needed a highly efficient, collaborative supply chain relationship to support their aggressive growth goals and maintain service and quality standards.\n\nToshiba’s MBU in Houston searched for a solution to resolve cost and service failures with the incumbent logistics provider. With limited tracking and traceability, poorly defined and followed standard operating procedures (SOPs), a narrow focus on inbound transportation, and no visibility to freight costs, leadership felt the lack of internal supply chain expertise hindered their ability to grow. They needed creative solutions.

The Solution

C.H. Robinson, having successfully handled domestic truckload needs for Toshiba since 2007, was invited to bid for a portion of Toshiba’s international business transportation spend — both inbound and outbound. Toshiba looked for a truly collaborative outsource to reduce costs, add automation and visibility through technology, and improve processes. The solution included supply chain consulting and account management to identify, improve, and standardize global organizational processes, technology to automate orders for eight commodities to eliminate manual entries and quickly provide visibility to the order cycle, and a strategy to reduce transportation costs while improving customer service.\n\nThe transition team developed a detailed onboarding plan, including mapping process flows for the order cycle, gap analysis, testing, training, measurement, improvement, and constant communication. One of the first actions was to create a process for shipping from Vietnam to Houston, or anywhere in North America. The collaborative team documented the necessary shipping steps and created SOPs from the bonded warehouse to customer locations. C.H. Robinson also worked with inventory control in Houston for product dimensions; the information was then fed into an optimization tool to create container diagrams. The new container process yielded positive outcomes — shipment weights in legal limits and containers loaded based on specific diagrams to maximize space, minimize the number of containers, and reduce costs.

Operational Impact

Toshiba achieved significant operational improvements through the collaboration with C.H. Robinson. The implementation of Navisphere technology improved Toshiba’s supply chain visibility and efficiency. Navisphere online access provides customized reporting, ability to track shipments, and business intelligence. To meet customer requirements, C.H. Robinson helped Toshiba set up EDI transactions with suppliers. The team also updated the Vietnam warehouse with scanners and barcodes to improve operational efficiency. Prior to the improvements, customer service had up to a 24-hour delay. Now, forklift drivers scan shipments and the shipment information is automatically entered into Toshiba’s ERP system. Automation consolidates orders more quickly and gives customers same-day access to Toshiba’s web portal to pick items in stock and see freight costs.
Toshiba lists service — from experienced people to account management — as a major benefit. For example, account management and process improvement helped reduce freight damages. C.H. Robinson’s account manager worked with a carrier known to have a history of damaging freight. By establishing and posting packaging standards for Toshiba, freight damages were reduced by 90 percent. Additionally, C.H. Robinson account managers help reduce costs through consolidation and optimizing inventory at regional distribution centers. Account managers also monitor supply chain industry developments — from emerging work stoppages to changing regulatory policies — to keep Toshiba leadership informed of potential impacts on their business.
C.H. Robinson operates as the MBU’s logistics department and functions as an extension of Toshiba’s team. Toshiba leadership describes the collaborative outsource relationship as additive, not subtractive. C.H. Robinson identifies continuous improvement strategies and works collaboratively with Toshiba to implement actions to improve their operations. In fact, Toshiba adopted several C.H. Robinson best practices, including mirroring the onboarding process for their customer contacts and setting up key account managers to provide oversight, accountability, and communication between Toshiba and customers.

Quantitative Benefit