Analysis of Hitachi's Global Logistics and Supply Chain Management

This report provides a comprehensive analysis of Hitachi's global logistics and supply chain management. It begins with an overview of the company, including its products, services, major customers, and operational details. The report then delves into transportation regulations, public policies,...Read More

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Analysis of Hitachi’s Logistic and Transportation Systems
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1LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Executive Summary
The aim of this report is to develop the understanding and concepts related to global logistics
and supply chain practices. The organization chosen in this report is Hitachi. This report will
provide an extensive research and analysis on the logistics works associated with Hitachi.
Firstly, an overview is provided about the company and various information related to it like
the products and services offered, who are its major customers, the no. of employees and their
annual income, its facilities and offices, are provided. After that, the follow up section
includes transportation regulations and policy associated with railways, marines, aviation and
roads are provided along with a gist of public policy. The report also highlights the supply
chain strategies of the organisation and its numerous logistics operations. It also provides
information about the transportation system related to motor carriers, railroads, airlines and
water carriers. Various security measures undertaken whilst the transportation of goods and
services are provided for the smooth and efficient seamless flow of the operation which
includes technologies in every aspects of transportation system i.e., railways, airlines,
marines and also the safety education measures for the employees. In addition to this, Hitachi
has various risk management measures to cope with the unprecedented disasters and
challenges. And lastly, concluding remarks has been provided related to the management of
logistic services along with the recommendations that should be implemented in order to
increase the efficiency of the transportation system which includes strategies like AI based
engines, next generation freight rails etc.

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Table of Contents
Hitachi: An Overview................................................................................................................3
Products and services.............................................................................................................4
Major Customers....................................................................................................................4
Transportation Regulation and Public Policy............................................................................5
Hitachi’s Supply chain management..........................................................................................7
Global Transportation Modes – Motor Carriers & Railroads..................................................10
Global Transportation Modes – Airlines, Water Carriers and Pipelines.................................13
Transportation security.............................................................................................................15
Transportation risk management..............................................................................................17
Conclusion and recommendations...........................................................................................19
References................................................................................................................................21

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Hitachi: An Overview
Hitachi was founded in 1910. Since then it has helped in resolving various social
issues through the application of Social Innovation Business which combines operational
technologies with the IT. It has introduced technologies in healthcare, transportation,
agriculture etc. It has 3,650 employees across the Oceania region (Australia and New
Zealand)
and has a revenue of AU $2.4 billion as per 2017 statistical data survey (Hitachi.com.au,
2019). Group companies operating in this region are as follows:
Regional Headquarters
 Hitachi Australia Pty. Ltd.
Social infrastructure & Industrial systems
 Ansaldo STS Australia Pty. Ltd.
 Sullair Australia Pty. Ltd.
Automotive Systems
 Clarion Australia Pty. Ltd.
Construction Machinery
 Hitachi Construction Machinery (Australia) Pty. Ltd.
 Bradken Limited
 H-E Parts International LLC
Information and Telecommunication Systems
 Hitachi Vantara Australia Pty. Ltd.
 Hitachi Consulting Australia Pty. Ltd.

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Products and services
Hitachi groups provides a wide range of product and services which are as follows:
 Home Appliances: Televisions, Air Conditioners, Home Appliances
 Healthcare Solutions: Medical & Healthcare Solutions, Life Science & Diagnostics
 Mining Solutions: H-E-Parts, Mining & Construction, Mining Solution etc.
 Agricultural Solutions
 Digital Presentation Solutions
 Industrial Equipment
 Social Infrastructure
 Rail Projects and Hitachi Rail STS
 Smart and Safe Cities and Hitachi Consulting
Figure 1: Hitachi Distribution Software
Source: sunrise-lsa.com
Major Customers
Hitachi has a wide customer base which uses their technologies and solutions. Following are
the lists:
Clients using their Gauges and Analyzers
 Nikon

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 Panasonic
 Hyundai
 Toyota
 Casio
 Mitsumi
 Victor-JVC
 Kia Motors
 Sony
Organizations that uses Hitachi’s Detectors and Technology
 Advanced Light Source (ALS) Berkeley, CA
 Cornell High Energy Synchrotron Source (CHESS) Ithaca, NY
 National Synchrotron Light Laboratory (LNLS) Brazil
Transportation Regulation and Public Policy
Road Transport
 Heavy Vehicle Regulation: The law covers areas relating to fatigue management, on-
road enforcement, vehicle standards, the Intelligent Access Program, mass dimensions
and loadings and heavy vehicle accreditation.
 Australian Road Rules: The National Transport Commission amends rules for the
maintenance of Roads and checks that they are up to date (Stevenson et al., 2015).
 Austroads Registration and Licensing Task Force: State governments does the task of
driver licensing and vehicle registration.
Aviation Policy & Regulation

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Aviation and Airports Division manages the policy and framework related to
Australian aviation and airports industries. It looks into the relationship between the Civil
Aviation Safety Authority (CASA), Australia's airlines, Airservices Australia (Airservices)
and the Government.
Following are some Legislation, Regulations and Guidelines:
 Air Navigation Regulations 2016
 Civil Aviation (Carrier's Liability) Act 1959
 Damage by Aircraft Act 1999
 Family Assistance Code
Rail Legislation and Regulation
National Rail Safety Regulatory Reform: The reform aims to provide single rail
accreditation for rail transport operators, availability of resources for decision making and
safe investigations and removing audit duplication (Merkert & Hensher, 2014).
Maritime Legislation and Regulations
The rules and policies associated with the maritime legislation is looked by Minister for
Infrastructure and Regional Development and the various information related to it can be
found in the Administrative Arrangements Order.
Public policy
Following are required lists of public policy:
 Financial Services Reform Act 2001 The Prime Minister's Community Business Partnership (PMCBP)
 Standards Australia
 Environment Australia

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 Australian Stock Exchange (ASX)
Hitachi’s Supply chain management
Hitachi provides the best logistic services at lowest possible costs. It evaluates the
current logistic operations and determine the optimum solutions (Chung, Elgqvist &
Santhanagopalan, 2016). The aim of the firm is to make the supply chain more transparent,
manageable and measurable. The supply chain management service, project management
service and inventory works in full coordination for the proper functioning of the company.
Short reaction times and real-time insights are the few techniques that has helped the
operations to run smoothly (Noorani & Carpenter, 2016). It offers a safe way to deal with the
transport costs and inventory costs while keeping them in check. Hitachi performs the
following roles for the efficient management of supply chain:
 Reducing logistic costs by integrating consignments and sharing storage
 Ships smaller volumes of products with low costs and also working with JIT
deliveries and shipments
 Stock levels optimisations and insights (Fichtinger, & Yates, 2017).
 Accessing global networks and providing flexible delivery times
 Selecting the most reliable, cheapest and the quickest shipping methods

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Figure 2: Hitachi’s Supply chain
Source: hitachi.com
Hitachi also manages various logistics-related operations which includes:
 Transportation to any location
 Network studies
 Various In-house services
 Planning
 Storing goods
 Selection of distributors
 Custom clearance
 Tax activities
 Consolidating shipments
 Negotiating with suppliers

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Strategic location of warehouses
Since the efficiency of logistics largely depends on the transport linkages, the
distribution and warehousing facilities are located in very ideal locations across the globe:
proximity to airports and ports and efficient rails and roadways (Askin, Baffo & Xia, 2014).
Hitachi’s logistics and warehousing solution include:
 Reverse logistics (Govindan, Soleimani & Kannan, 2015)
 Bonded and public storage of goods
 Custom activities
 Automated management of inventory and its optimisation
 Cross-docking (Ladier & Alpan, 2016)
 Quality control
 Distribution activities
 Value added services like assembly and labelling
Global Transportation Modes – Motor Carriers & Railroads

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The railway transportation solutions of Hitachi handles carriages for monorails, bullet
trains, city trains etc. along with platform barriers, railway girders and other maintenance
parts for transportation infrastructure. The HTS (Hitachi Transportation System) group
provides facilities in domestic as well as overseas markets. The company delivers various
equipments safely across the globe by optimal combination of land, sea and air
transportation. The company provides the latest rolling stock technology along with services
and products in signalling, power distribution, on-board components, depot systems and
station equipment. Its E&M subsystems gives it a unique edge in railways integration
services.
Figure 3: Hitachi’s Transportation System
Source: hitachi-transportsystem.com
Following are the features of its Railways connections:

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Rolling Stock
 Hitachi Transportation Design
 Japanese Shinkansen Technology
 A-train Concept (Kroon, Maróti & Nielsen, 2014)
 High Speed Projects in the UK
 Linear Motor Driven System
 High Speed Lightweight Bolsterless Bogie
 Monorail Systems
 Tilting Train
 Bi-mode Solution (Yin et al., 2017)
Signalling Systems
 Digital ATP System
 Communication Based Train Control (CBTC)
 ATO (Automatic Train Operation) System
Figure 4: Hitachi Rail’s Products and Services
Source: hitachi-rail.com

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On-board Components
 HVAC
 ATI (Autonomous Decentralized Train Integrated System)
 Propulsion Equipment
Traffic Management
 Features of Railway Traffic Management Systems
 Maintenance Support
 Train Operation Management
 Operation Information for Passenger and staff
 Tracking Function
 Route setting according to the latest diagram
 Route Setting Function
 Sequence Assessment
Power Supply
 Power Supply Equipment
 SCADA (Supervisory Control And Data Acquisition)
Station Equipment
 Elevators
 Escalators
Depot Systems
 Project Areas

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 Project References
Road transportation is carried out by Hitachi using the following truck types:
4 Wheels Jumbo Truck
 Loading weight: max. 1 tons
 Dimensions of container’s inside: 1.6 x 2.2 x 1.75 m
 Capacity of container: 6.16 m³
6 Wheels Truck
 Loading weight: max. 6 tons
 Dimensions of container’s inside: 2.2 x 7.2 x 2.4 m
 Capacity of container: 38.02 m³
Global Transportation Modes – Airlines, Water Carriers and Pipelines
Airline transportations
There are three things HTS group focuses on during Air freights
 ULD intact delivery: The ULD service reduces the risk of loss or cargo damage
during air transit. Regular improvements is being made in this area to provide secure
air transportation.
 Re-forwarding Service: connecting flights and networks are used for the
transportation that needs transits and it also manages lead times (Hitachi Transport
System, 2019).
 Rigorous Compliance Standards: the HTS group has an efficient compliance system
certified by AEO/C-TPAT.

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Ocean freight/transportation
The HTS group ships cargo across the globe delivering products that are of different
shape, content, weight and also which require various delivery time-frame. There are three
things that the company takes care of during ocean freights:
 Experts in handling special containers (Hitachi Transport System2, 2019)
 Break Bulk and Ro-Ro Vessels: break bulk and ro-ro vessels are used for the
shipments, rail carriages, cargos and plant equipments that doesn’t fit into normal
containers. So, these vessels are used to transport them to different parts of the world
(Su et al., 2015).
 Own Groupage Services for LCL Cargoes

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Figure 5: Hitachi’s Intermodal Transportation system
Source: hitachi-transportsystem.com
Transportation security
Hitachi follows the motto of "safety takes precedence over everything" to deliver safe
and reliable services. Every year, company rolls out its safety initiatives. It provides safety
education and self-improvement training opportunities. Training programs are carried out to
enhance the skills in order to guide and advice the staffs along with the elimination of unsafe
behaviours and acts. Hitachi also promotes G-mark accreditation (certified by the Japan
Trucking Association) for facilities.
Following are some principles followed by HTS group regarding transport safety:
 To improve the traffic system, and ensures proper function of the traffic under the
guidelines of the law
 To regularly improve the safety related to transportation by implementing techniques
like PDCA (Plan-Do-Check-Act) cycle (Pietrzak, & Paliszkiewicz, 2015)
 To create awareness among the employees of the company regarding safety by
organising campaigns and educational sessions
 To spread awareness amongst the partner transportation companies by holding regular
meetings and trainings with the staffs of other companies, indulging in on-site
inspection activities, organising joint venture educational sessions and programs and
distributing materials and brochures related to safety.
Hitachi performs reliable and safe loading/unloading, installation, transportation of
equipment and machinery irrespective of the function, size or shape. The AEO (Authorized
Economic Operator) programs of each country/region and the C-TPAT (Customs-Trade
Partnership Against Terrorism) program of the United States helps in providing increased

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security and compliance (Miled & Fiore, 2014). So, HTS have acquired these certifications.
Goods are being moved efficiently and safely to different parts of the world through
forwarding capabilities, proper 3PL/contract logistics integration and haulage of heavy
machineries. The areas which are not under the company’s reach, trusted partners provide
reliable and safe services.
Packaging solutions
The HTS group offers various package design for safe transportation of materials and
products. It has specialized facilities for optimization and packaging analysis. It also provides
measurement devices and evaluation equipment for doing logical tests. It does its job by
running simulations of various hazards that can occur while the transportation process and
propose the ultimate packaging solution on the basis of test results and quantitative data.
There are three things which are taken acre of during the packaging process which are as
follows:
1. Optimum packaging: HTS provides the best packaging by examining the material of
the product like the temperature, strength, resistivity to water and air, hazardousness
etc. and also takes into account the storage conditions, routes of transportation and the
climate for better delivery. In addition to this it also looks at the cost of packing and
disposal.
2. Special packaging design: the solutions provided by the HTS includes buffer designs
to manage the effects within the standard allowable value, vibration proof designs that
can counter the resonance range, temperature controlled packaging that will withstand
the temperature during the transportation process, returnable containers to cope with
the repetitive usage of the containers etc.

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3. Technical centre: HTS also provides verification by exercising various tests to
provide solutions to improve the operational activities.
Figure 6: Cold Chain Solution for Maintaining Safety of Food and Medical Products
Source: hitachi.com
Transportation risk management
It is important that the risks associated with the system should be discovered early and
proper preventive measures should be taken. Hitachi continuously develops the risk
management system in order to understand and analysed the risk quickly after which the
counter measures can be taken.
Disaster Risk Measures
Emergency Training: Training is carried on a regular basis between the head office, group
companies, sales division and the disaster response unit so that whenever a disaster occurs
business operations can be restart quickly (Faturechi & Miller-Hooks, 2014).
BCP Promotion: BCM committee (Business Continuity Management Committee) which is
chaired by the CEO and the President, is responsible for developing measures and policies for

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the BCP (Business Continuity Plan) which deals with providing services at time of risks like
natural disasters and infection (Ono, 2015).
Safety confirmation: Hitachi provides a safety confirmation system for its employees by
using computers and mobile phones. It keeps a safety check on its employees and the ones
abroad by sending global alerts (overseas safety information) and international safety
education to make them aware about the risks.
Figure 7: Disaster Management and Security Solutions provided by Hitachi
Source: hitachi.com
Tightening of Information Security

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Hitachi knows the importance of managing and storing internal information and
customer information. It maintains the security level by implementing regulations, training
and employee education to deliver safe and secure logistic services.
Personal Information Protection: Hitachi transportation System group has a “Privacy
Policy” which protects its customer’s personal information. It has a privacy mark and is a
certified company with systems to protect personal information (Zhang, 2018). They are
certified according to ISO/IEC 27001 which shows that their security management is above
standard.
Certification Standard: ISO/IEC 27001: 2013 & JIS Q 27001: 2014
Figure 8: Security Systems Hitachi
Source: hitachi.com

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Conclusion and recommendations
With the advancement in digital technologies, mobility and transportation companies
are nowadays focusing on the every aspects of business growth whether it is related to rail,
air travel or waterways. The digital era has provided various horizons and challenges for
transportation and mobility companies. Hitachi has offered efficient modes of transportation
in order to move the people and products across the globe more safely, seamlessly and swiftly
and has foster big picture thinking to arrive at fundamental solutions. It has gained deep
experience in how to enhance commuting experience for the betterment of the society. It has
diverse option for transportation services.
Following are some recommendations that the organization can work on, for the betterment
of the society:
 Electric cars can be introduced to reduce carbon emissions thus safeguarding the
environment hence bringing social, economic and environmental ease to roads
everywhere.
 Freight rails also impacts the economy as it offers jobs, goods and open up
opportunities for business in the domestic as well as international markets. Safe and
reliable rail freight should be provided to domestic customers by building next
generation of freight rail transportation.
 AI- based engines are providing same level of accuracy and speed making the
transportation system safer and agile. Further developments should be carried out in
the fleet management by introducing Artificial Intelligence.
 Smart logistics should be developed by implementing strategies to build solid
domains.

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 Fleet management can be worked out as these days IoT are used to manage fleets and
locate vehicles, monitor vehicle condition and speed and also to recommend
maintenance practices.
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