33rd APEC Transportation Working Group Tokyo, Japan October 10-14 2010

1. 33rd APEC Transportation Working Group Tokyo, Japan October 10-14 2010 The restructuring of supply chain management via APEC initiative Presenter’s Name: Mr. TakayukiHIRABAYASHI Economy: Japan

2. Contents Current problemsof international logistics Value of visibility Challenges of establishing a visibility platform (1) (2) Public and private scoters’ cooperation Key points for Supply Chain Visibility Supply Chain Visibility Initiative

3. Current problemsof international logistics Scope of outsourcing: difficult for shippers to control the process Production Inland transportation Warehousing Customs／ Container loading International transportation Customs／ Container unloading Warehousing Delivery／ sales In addition, under economic globalization, production and sales all over the world will involve the management of a greater number of trade lanes and, hence, involve a greater number of entities. Man-hours Excessive Safety Stocks Shipper / Consignee Production Delivery／ sales Truck company Customs broker Safety stocks Safety stocks Ocean carrier In anticipation of uncertainty that may exist in the performance of transportation, there are excessive safety stocks at every stage of the process. Phones, fax, and e-mail are means of communication normally used to send and receive information.

4. Value of visibility Establishment of a visibility platform to share cargo movement information between entities involved in the supply chain will have following effects. •  Reduction in consolidated stocks • lead-time to be reduced by 1.1 dayson average • consolidated stocks to be reduced by 1.6 days’ worth of stockon average •  Reduction in workload • The number of inquiries and an anticipated reduction therein by the establishment of a visibility platform • 　　　・exporting workloads to be reduced by 9%~30% • 　・importing workloads to be reduced by 10%~25% • Shippers and forwarders can expect that 30%~60%of the work in the process that has not yet been automated ※According to the questionnaire survey conducted by the Ministry of Economy, Trade and Industry in 2009

5. Challenges of establishing a visibility platform（１） Production plant Container Yard Warehouse Warehouse Vessel Inland transportation Logistics facilities / environment Cargo/ transport materials Logistics process (stages) Ocean shipping Vessel (Layer5) Different code structures are applied. Customs Transship-ment Inland transportation Inland transportation Container (Layer4) Warehousing Ship loading Container Vanning Ship unloading Pallet (Layer3) Container Devanning Customs Carton/tote box (Layer2) Inspection Transship-ment Wrapping Warehousing Package (Layer1) Inspection Delivery Individual item (Layer0) Production Sales

6. Challenges of establishing a visibility platform（２） • EPCIS proposed by GS1 • Ensure interoperability among standards currently used • Set an operational rule; a data set, code structure accounting management Production management Sales management Accounting management Operation management Shipper DB Logistics trader DB EPCIS Standard interface Internet Terminal repository Logistics provider repository Shipper repository Customs repository Shipping company repository Terminal repository Customs repository Systemized code Production system RFID Customs system AIS TOS Customs system RFID Information to be shared Plant Container terminal Customs of the exportingside Ocean-going vessels Container terminal Customs of the importing side Warehouse ※EPCIS: Electric Product Code Information Services

7. Public and private scoters’ cooperation Private Sector Manufacturers:Canon Inc., Toshiba Logistics Corporation Logistics providers:Deutsche Post DHL (forwarder) NYK Line (shipping company) Shanghai International Port Group (port operator) System vendors:Oracle, Japan IBM Visibility Platform Standards organizations WCO UN/CEFACT GS1 Public Sector Customs: Peru, Chinese Taipei Transport: Japan (MLIT), China, South Korea (MLTM), EU Commission Science: Hong Kong, China Economy: Japan (METI), South Korea (MKE),

8. Key points for Supply Chain Visibility • Technology • Visibility platform architecture (EPCIS network) • Technical specifications • Technologies for capturing data • Database • Query method • Information sharing • Data set to be shared • Structure of codes to describe cargo movements • How to promote the implementation • Port-to-Port implementation • Collaboration with customs systems • Eventual provision of door-to-door services from the original shipper to the consignee • Response to the needs of specific industries • Best practices • Pilot outline / system composition • Practicality of a visibility platform • Verification of the effects of improvements in supply chain management

9. Supply Chain Visibility Initiative CY 2010 ~ 2012 CY 2013 CY 2010 • SOM1@Hiroshima ・APEC ICT Global Value Chain Workshop, ECSG • SOM2@Sapporo ・Supply Chain Connectivity Framework, CTI • SOM3@Sendai ・Supply Chain Visibility Workshop, SCSC 　・Supply Chain Connectivity ActionPlan, CTI • Strengthen business competitiveness • 2. Reduce the burden on the environment • 3. Achieve both security improvement and trade facilitation • Workshop collaborating with other fora, such as TPTWG/SCCP • Pilot Project among economies as the BEST PRACTICE • APEC Guideline Based on “APEC Supply Chain Connectivity Framework Action Plan for Chokepoint 6”