What a logistics CIO in Japan has to get right

Our settlement system calculates what roughly 3,100 shipper accounts owe us and what we owe 820 partner carriers, many of them family firms that cannot wait for a late payment. When I designed its replacement, the central decision was sequence. I moved one business line at a time, food contract logistics first because its tariffs were simplest and automotive last because its sequencing charges were the most intricate, and ran old and new in parallel for at least two closing cycles per wave. Before any code moved, we reduced 14,200 customer-specific rate tables to 2,900, which was a commercial negotiation more than a technical task. Parallel running costs about ¥410 million a year. I accept that cost because a failed cutover would fall first on the smallest carriers, whose cash flow depends on our payment date.

Since April 2024 truck drivers in Japan have been subject to a 960-hour annual cap on overtime, alongside revised standards on restraint time and daily rest. Our dispatch system reads digital tachograph and attendance records each night, forecasts each driver's remaining allowance and blocks any assignment that would breach a statutory limit. Internal limits, which are stricter, produce warnings that a depot manager may override with a recorded reason. I designed the rules with our human resources and operations executives and a lawyer who checked each threshold against the standards. The harder work was redesigning runs: relay points at Kakegawa and Fukuyama let a driver hand over a trailer and return home the same day. The system makes the limit visible; the relay network makes it possible to keep.

A driver who waits two hours at a shipper's dock spends two hours of a limited working day producing nothing. Until 2023 we recorded that waiting on paper, if at all. We introduced berth booking at our own warehouses, then offered shippers the same booking and arrival records for their sites under a reciprocal agreement: they send advance shipment notices a day ahead, and we report waiting by site, by hour and by cause. The agreement limits how either side may use the data and keeps individual drivers' identities out of shipper reports. The amended logistics efficiency law now asks shippers and carriers alike to reduce loading and waiting time, which has made the conversation easier. The data turns a complaint into a measurement that both sides can act on.

I spent ten years inside a Japanese integrator, so I know what a fixed-price contract for work buys and what it hides. It caps the client's price, but it also moves design decisions to the vendor and pushes the risk down through subcontracting tiers to the engineers with the least authority. At Seriyama we now keep requirements, architecture and data design in-house, and we buy engineering capacity under quasi-mandate contracts with named people and a published tier structure. Directing an integrator's engineers day to day is permissible only under the right kind of contract, so our contract choices and our working practices are reviewed together. I also ask every vendor to disclose how many subcontracting layers sit beneath a statement of work. The answer tells me where our knowledge will live when the project ends.

Much of our operating estate runs on systems we do not host: warehouse management in a vendor's data centre, telematics in a supplier's cloud, electronic data interchange through industry networks with our automotive customers. My resilience planning therefore starts with the question of what we do when a supplier's environment fails or is attacked. After the November 2024 incident we pre-delegated the decision to sever external links to the duty incident lead, wrote paper operating procedures for chilled warehouses, required vendors to use separate maintenance accounts for each customer and to notify us within four hours of a suspected compromise, and began exercising with operations every six months. I report our IT general controls to the Audit & Supervisory Board each year as part of internal control reporting, and I report incidents to it when they happen.

Almost half our revenue comes from moving parts to assembly plants in the order the line will fit them, often within a two-hour window. That business runs on electronic instructions from the automakers, relayed through their parts suppliers to us, with sequence changes arriving after a truck has been loaded. I learnt this exchange from the supplier's side at Amabe Industries, where I ran the systems that received delivery instructions and returned shipping notices. At Seriyama I make sure our dispatch and warehouse systems receive the same instruction the supplier does, rather than a copy re-keyed hours later, and that every sequence change is traceable to its sender. On-time arrival at assembly plants has stayed at about 99.6 per cent through the changes to drivers' hours.