Feb 20, 2012

TOTO to reform international logistics

TOTO Ltd. (formally known as Toyo Toki Co. as a leading manufacturer of sanitary chinaware), which has built an efficient domestic logistics system, will make a full-fledged attempt to reform its international logistics. It will push forward with efforts for such as (1) reducing lead times (LT) and strengthening its total global inventory management, from production to sales, in an effort to reduce stock levels, and (2) reducing LT and improving delivery efficiency to reduce logistics costs. It has posted a sales goal of Y150 billion for its global (for use in houses overseas) operations by 2017, which will mark its 100th year of business, in its mid-to long-term business plan - a goal it will also attempt to meet from the perspective of international logistics. It is poised to push forward with freight rate negotiations for the coming fiscal year with shipping companies, with a proposed monthly global cargo volume of 800 FEUs, in an attempt to lower costs.

The series of these measures was disclosed by Masayuki Kato, managing executive officer and chief director of Logistics of TOTO, at Kansai Logistics Seminar 2012 (hosted by the Japan Institute of Logistics Systems) held on Feb. 16. The theme of the speech was "TOTO's SCM reform efforts". In an effort to contribute to environmental protection, the company has set up the "TOTO Green Challenge", which is now being implemented across all of its business activities, from product development to production and logistics.

Regarding efforts towards international logistics, Kato commented that TOTO will provide support in areas such as logistics inventory management, warehousing, and transport for its subsidiaries in four locations across the globe, namely China, Asia/Oceania, the U.S. and Europe, indicating that the company will create systems there similar to the one it has created in Japan. The company continues to develop itself in five locations, including Japan, and has 30 production and logistics hubs across the globe. In an effort for further expansion, the company has opened a sales company in Brazil, and will open a sanitary ware production hub in Gujarat state, India with business scheduled to open toward the end of next year. It has set a total sales goal of Y600 billion for 2017, of which it expects overseas sales to make up 25% (Y150 billion). Current overseas sales comprise only 15% of overall sales.

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