The Logistics Center was transferred from the Service Planning Division to the Finance Division in April 2015 and became the Procurement and Logistics Center. The project initially started with a total of 38 members in five groups: the Management Group, Procurement Group, Naka Logistics Group, Kansai Logistics Group, and Kasado Logistics Group. In April 2016, the Demand Forecasting Group was newly established and separated from the other groups.
At the time of the transfer to the Finance Division, we aimed to establish a rapid parts supply system under the slogan “parts supply in sync with service activities”, and worked to expand our inventory of parts and to provide a 24-hour, 365-day service.
In the logistics field, a network was established between the core SAP R3 system and the warehouse system at the three domestic bases of the Naka Logistics Center, Kansai Logistics Center, and Kasado Logistics Center, and parts information (inventory, pricing, delivery information, discontinuation information, order results, etc.) was linked.

The Naka Logistics Center was a three-story steel-frame building with a floor area of approximately 1,500 ㎡, and was equipped with an automated warehouse with three bucket stackers and one pallet stacker. In addition, one prefabricated cold storage, eight cold storage units, and three freezers have been installed for the storage of chilled items, and a 40-square-meter toxic substance management room has been set up for the storage of highly toxic substances.
In response to the increase in the volume of goods, we began using external warehouses (three warehouses) such as the Narita Warehouse as satellite warehouses in 2015, but we consolidated these warehouses and relocated to Hitachinaka City Inada from Hitachinaka City Horiguchi (on the premises of Hitachi High-Tech's Naka Works) in May 2016. The warehouse has been expanded to a work area of approximately 1,000 m2 and a storage area of 2,700 m2, and it has begun operating as a mother warehouse for parts from Japan and overseas.
After that, in 2018, they examined the future vision of warehouse management and worked on the Central DC-Depot Model (CDC-DP) concept. The CDC-DP is a plan to establish a system that links a mother warehouse (central DC) in Kanto and Kansai that is responsible for inventory and shipping with depot bases that are responsible for temporary storage and shipping for the region. The aim was to enable nationwide next-day morning delivery and to enable flexible management, such as reviewing inventory in response to demand.
In April 2020, as Phase 1 of the CDC-DP, we started operating a 3PL (third-party logistics) operation at the Kansai Logistics Center. At the Kansai Logistics Center, operations are carried out using a state-of-the-art automated warehouse system, which has enabled us to improve the speed and quality of our receiving and shipping operations.
In May 2022, as part of Phase 2, the function of the Naka Logistics Center for domestic parts was transferred to the Kanagawa Logistics Center (Yokohama City, Kanagawa Prefecture) and 3PL operations began. The Kanagawa Logistics Center is our company's mother warehouse with a storage area of approximately 2,000m².
In FY2024, the CDC-DP concept was temporarily suspended due to the impact of changes to the core system, but we plan to continue with Phase 3.
The Kasado Logistics Center began operations in December 2001 and mainly handles parts related to etching. As it mainly handles parts for clean rooms, it used to ship them using plastic corrugated cardboard. In August 2017, it relocated to the Hayama area.
In April 2021, the Koyama Logistics Center in Gotemba City, Shizuoka Prefecture, was added following the transfer of the Hitachi High-Tech Science BT business. The storage area is approximately 300m².
As of July 2024, our logistics functions are operated at five bases: the Naka Warehouse, Kanagawa Warehouse, Oyama Warehouse, Kansai Warehouse, and Kasado Warehouse, each of which makes the most of its own characteristics.

With regard to demand forecasting, we have been promoting inventory management using the Global Service Parts Management (GSPM) system since 2020, and we are working on inventory control on a global scale by linking the GSPM system with the ERP systems of our company and those of Asia, Europe, and the United States. Demand forecasting using GSPM is now widespread, and inventory replenishment operations using data have become established.
In order to improve the rate of fulfillment of customer delivery requirements, our company's inventory balance had been on a significant upward trend. Our company's performance was also improving, and our inventory balance was gradually increasing, but in 2023, the increase rate was more than 20% compared to the previous year.
The main factor was the impact of global procurement difficulties due to coronavirus infections and the situation in Ukraine, etc., due to an abnormal increase in recommended orders under the GSPM and forecasts from overseas subsidiaries. From July 2024, concerned about a deterioration in cash flow due to an increase in inventory balances, each department began implementing measures to reduce inventory levels. The effects of these measures gradually became apparent from around December 2024, and the inventory balance at the end of FY2023 was reduced to the target level. Going forward, we will continue to strengthen cooperation with the service and sales departments to optimize inventory levels.

From April 2024, the Service Parts Business Group, Procurement Group, and Logistics Group of the Procurement and Logistics Center were reorganized into the Planning Center, Procurement Center, and Service Support Center, respectively. This is to strengthen the checking function by separating the functions of the three authorities (order instructions, order processing, and incoming goods inspection) of each group.
The Procurement Center will specialize in procurement operations from now on, identify current issues and develop improvement measures, and begin initiatives to optimize procurement by strengthening collaboration with offices and suppliers. SAP S/4 went live in July 2024. We will significantly review existing business processes and promote efficiency and standardization. In addition, we have introduced and started operating SOCIO, Hitachi's purchasing system, for purchasing expenses. Going forward, we will continue to strengthen our organizational functions with the aim of optimizing procurement operations in the services business, including strengthening compliance, improving operational quality and efficiency, etc.