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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Compaq Japan to Speed Supply Chain Mgt. System Implementation
  • January 6, 1999 (TOKYO) — Compaq Computer KK of Japan told Nikkei Information Strategy it plans to speed the implementation of a supply chain management system in the spring of 1999.
    Compaq Japan aims to reduce the current one month worth of inventory to about four days. It also aims to reduce the current one week delivery time to less than five days.

    The implementation plan is expected to be carried out in parallel with the commencement of the configure-to-order production system of personal computers at Compaq Japan’s Tama plant.

    Compaq Japan is currently transporting PCs as finished products from Singapore to Japan, which often results in excess inventories. Because of this, it aims to assemble products at its Tama plant by introducing the supply chain management system.

    “This will help us to drastically cut inventories of finished products as well as improve inventory turnover,” said Hisayuki Hikichi, Compaq Japan’s information management manager.

    Compaq has 15 percent of the worldwide PC market share. However, its market penetration in Japan accounts only for 4 percent. Compaq Japan hopes to turn around the PC business in Japan by effectively carrying out configure-to-order production while taking advantage of the supply chain management system.

    The new system is to be called “TOPS.” This is the Japanese version of the supply chain management system that has already been enforced by the U.S. head office. It makes it possible for the Tama plant to access Compaq’s head office server in the United States through the corporate network.

    The new system is designed to manage, on a monthly basis, order acceptance information gathered from all over the world and also to project demand conditions in the coming six months. This is done by comparing various past data, including the market trend of similar products of competitors.

    Based on these results, the system is designed to draw a conclusion on the product allocation in each area and set up appropriate production plans for production bases that cover their respective areas.

    Such plans are to be reviewed monthly, and orders for components are placed on a monthly basis en masse. In addition, the production plans are adjusted either on a daily or weekly basis, depending on changes in demand conditions of each production base.

    Until now, PCs for the Japanese market have been produced in Singapore, and they have been delivered as finished products to various dealers via the company’s Atsugi plant in Kanagawa prefecture. Then, dealers were required to carry out such tasks as hardware changes and software installations. This has been an extremely time-consuming procedure.

    Once the new system is fully implemented, components will be transported from Singapore, and Compaq Japan hopes to migrate to a system that allows the Tama plant to assemble components tailored to customer specifications.

    In an effort to enhance cooperation with sales channels, negotiations with several leading dealers to deploy electronic data interchange are in progress. In 1999, Compaq Japan also hopes to expand the system to a dozen or so big dealers. As for other small- and medium-sized dealers, it hopes to deploy EDI using either the Web or email.

    TOPS’ application and database servers are centrally controlled by the head office located in Houston, Tex. In Japan, only terminals are to be installed. In introducing TOPS to the Tama plant, nearly 50 million yen (US$440,000) has been invested in an effort to strengthen PC terminals as well as the network.

    (Nikkei Information Strategy)

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