ITOCHU Announces Business Alliance with Sinops for Optimal Food Value Chain
January 20, 2022
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter “ITOCHU”) has entered a business alliance agreement with sinops Inc.(headquartered in Osaka City, Osaka; Hiroshi Minamitani, President and CEO; hereinafter "sinops"), which provides a demand-forecast automatic order placement system, for the construction of Demand Chain Management*
1 for foods that reduces food loss and increases the efficiency of logistics. This business alliance will accelerate collaboration between the companies as they promote the optimization of the food value chain together.
According to the estimations from Japan's Ministry of Agriculture, Forestry and Fisheries* 2, the volume of food lost in Japan in FY2019 was 5.7 million tons. Of this, the industrial food loss from food-related operators including production and logistics processes was 3.09 million tons, more than half of the total year's food loss. The food distribution industry is required to act to reduce food loss. In addition, amid problems such as the labor shortage, the aging workforce and increased logistics costs, social demand for the White Logistics promotion which is implemented through improving the productivity of truck transport and the efficiency of logistics operations, etc is increasing, with the goal of the realization of a sustainable society.*3
sinops is an IT solutions company that provides automatic order placement and inventory optimization solutions based on the demand forecasts using retail sales data. Since the 1980s, it has focused attention on the field of demand forecasting and automatic order placement and has patented the systems it has developed. The accuracy of its demand forecasts has been praised, leading to sinops having a 17% share of the retail industry market, a main target with net sales of more than 40 billion yen, and more than 30% of the food supermarket industry market.
ITOCHU has set "Enhancing our contribution to and engagement with the SDGs through business activities" as one of its Basic Policies in the medium-term management plan and it is promoting the innovative transformation of the value chain originating downstream from a market-in perspective in the consumer-related field where it is competitive. Going forward, ITOCHU will construct Demand Chain Management for foods that will comprehensively links demand information in the retail industry to distributors and manufacturers using sinops' expertise in demand forecasting and automatic order placement and the diverse networks of ITOCHU. In addition, the two companies will look ahead to the foundation of a joint company in the future and will optimize supply and demand throughout the food value chain as they aim to contribute to the reduction of food loss and the White Logistics Movement.
Outline of the Business Alliance
(1) Building a
Building of a comprehensive system linking retail demand forecasts, order placement data, inventory data, etc. to retailers, logistics centers, and manufacturers.
(2) Advancing DX throughout the Logistics Industry
The improvement of business efficiency using the DCM platform at each stage of distribution to retail stores, the operation of retail joint distribution centers, and the logistics of manufacturers, etc.
(3) Contribution to the SDGs
Contribution to the reduction of food loss and CO2 emissions, and work-style reforms, etc. through the initiatives of both companies
(4) Considering the establishment of a joint venture
Considering the establishment of a joint venture aiming for the operation of a business by both companies together
*1Demand Chain Management
An information management method that comprehensively organizes product development, production and supply planning, logistics, and sales systems, etc. based on information obtained from the demand side (e.g. consumers).More specifically, it forecasts demand based on POS and other data and optimizes production and inventory management.In contrast, an information management method based on information obtained from the product supply side is called Supply Chain Management (SCM).
- *2Ministry of Agriculture, Forestry and Fisheries website https://www.maff.go.jp/j/press/shokuhin/recycle/211130.html (Japanese)
*3 White Logistics Movement https://white-logistics-movement.jp/outline/
Outline of sinops Inc.
|5th floor, Tokyo Tatemono Umeda Building, 1-12-12 Umeda, Kita-ku, Osaka-shi, Osaka
|Hiroshi Minamitani, President and CEO
|・The sinops automatic order placement and inventory optimization solution (their developed system)
・Consultation (logistics diagnosis and improvement, planogram consultation)