Logistics Market Trends - Japan 2022

Think of the supply chain industry, and you will see Japan has been one of its leaders and a great power for many years. It ranks 5th for logistics in the World Bank ranking. Due to its size, density and efficiency, distribution costs are very low by international standards. According to data from the Japan Institute of Logistics Systems, these costs represent only 5% of total sales for the manufacturing, wholesale and retail industries in the country, as opposed to 9% in the US. 

Positive effect of the pandemic

When we analyze the economy, one of the side effects of Covid-19 was an increase in demand for e-commerce. In order to successfully manage technologies in times of pandemic, such as AI and Machine Learning (ML), business innovation strategies gained more power, which resulted in an increase in SCM, cloud-based solutions adoption by SMEs.

In this article, we will explore market trends, needs and expectations, and how digital solutions can help companies venture deeper into innovation.

Customer trends for the logistics industry

What do Japanese customers expect from logistics companies in a post-pandemic scenario? In Japanese consumers' purchasing decisions, delivery speed is a deciding factor, and one-day shipping is almost a rule. Country size and the existence of an efficient logistics sector allow for greater speed in deliveries, making them much faster and agile. An interesting curiosity about Japanese customers is that they prefer to receive their packages directly from the driver who makes the delivery, so packages are rarely left at the door. We should also take into account the fact that, according to studies, Japanese buyers are less likely to buy from foreign markets than any other buyers around the globe, and there is a clear preference for domestic delivery services. In the absence of this option, a world-renowned delivery company should suffice. Buyers' concern for quality is consistently greater than their concern for the cost.

Industry trends and key strategies

Logistics and supply chains are a key part of global businesses. Designing supply chains and networks is strictly related to understanding a company's strategy, field operations, technology, underlying trends and its potential risks. Right now, logistics companies face many challenges and among them we have:

Customer Service: customers are looking for complete transparency and speed when tracking their delivery.

Environmental Issues: Anti-idling laws and emission reduction regulations, established by state and local governments, have triggered a warning to companies about the costs of complying with such laws, which could exceed the benefits to be achieved.

Driver shortage and retention: Hiring and retaining this type of workforce is still an unsolved issue.

How to overcome these challenges

Companies can now understand the need to build trends and strategies in order to solve a great variety of issues. Among these issues, we can name:

Trends

EcoLogistics or Green Logistics: The circular supply chain that is gradually replacing the traditional linear supply chain. This trend will benefit from lower expenses in the long-term, less waste, and lower environmental impact.

3D Printing: 3D printing technology consolidates the number of components and processes required for manufacturing, which will have a major impact on global supply chains, reducing complexities and delivery time, lowering production costs and improving resupplying time on the market.

Internet of Things (IoT) in Automation: The Internet of Things (IoT) allows warehouse and fleet managers to keep track of their cargo and inventory as tracking and monitoring are the two main goals when deploying IoT in supply chain and logistics.

Omnichannel Approach: Customers get a customized experience with the omnichannel approach as marketing, sales and logistics work together to ensure purchases are made consistently across all channels.

Customer centricity: The main lesson here is to think “outside the box” and extend supply chain communications among organizations, of which the company depends on for its revenue, which would involve both customers and suppliers.


Strategies

Supply Chain Management Software: Players focus on developing software, which provides a real-time analytics platform as well as managing products and information flow across the supply chain network. The software is designed to enhance and strengthen an organization's supply chain operations by managing production, inventory, sourcing, transportation, and product demand supervisioning. It can be customized based on company requirements, and its sub-categories include supply chain planning, transportation management system (TMS), warehouse management system (WMS), manufacturing execution system, and more.

Warehouse Management Solution: Players focus on embracing emerging technologies like AI, ML and Big Data. The adoption of Artificial Intelligence has made the creation of more efficient, advantageous and reliable processes easier. Technology such as the Internet of Things (IoT) assists in maintaining a transparent supply chain network, which in turn helps bring customer visibility, loyalty and trust. From modern WMS and Automated Guided Vehicles (AGV) to robotics, AI driven and use of data analytics, technology adoption will be at the heart of the growth and development of the Indian logistics and supply chain sector.


Smart Logistics Solution: Players focus on the adoption of the Internet of Things (IoT), automation technology, Blockchain technology, cloud computing, advanced analytics/Big data, Artificial Intelligence (AI) and robotic technologies to provide end-to-end, cutting-edge, lean and smart logistics solutions, improve quality, reduce costs and minimize human intervention.


Autonomous Vehicles, Wearable Devices and Warehouse Digitization/Automation: To achieve operational efficiency in order to combat supply chain cost pressures in the industry.

CI&T as a partner

Logistics is one of the most innovative industries that has especially changed market needs and expectations during the pandemic. It is the industry that most needs to keep up with innovation. That’s also one of the reasons CI&T is your digital transformation partner and is here to support you throughout your entire innovation journey. In order to overcome the barriers that our current situation imposes and become an antifragile company, we must understand and respond to customer needs. We have the expertise to enhance your strengths with our up-to-date digital solutions. For more, visit https://ciandt.com/jp/en/product-ready


To learn more about us, check out our pages below:
What we can do: https://ciandt.com/jp/en/what-we-do/digital-transformation
Case studies: https://ciandt.com/jp/en/our-work

Would you like to share your challenges with us? Get in touch at: https://ciandt.com/jp/en/contact-us

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