BCP Measures by Distributing the Functions of Distribution Centers

ASKUL Corporation

Industry: Wholesale and retail / Compound service business

Publication date	December 4, 2023 (Posted on April 16, 2024)
Sector	Industrial and economic activities / Life of Citizenry and Urban Life

Company Overview

ASKUL Corporation operates e-commerce and logistics businesses, including ASKUL, a mail order service of office and worksite supplies for business establishments, and LOHACO, a mail order service of daily necessities for individuals.

Climate Change Impacts

Increased rainfall and strong winds due to climate change may cause an increase in delivery delays and accidents, resulting in higher costs for delivery, personnel expenses, compensation, and insurance payments. We have 10 distribution centers nationwide to provide next-day delivery (same-day delivery in major cities), but if a distribution center is damaged by flooding or strong winds, it will not only cause physical loss of facilities and inventory, but also the inability to use other companies' warehouses or facilities as a replacement of the distribution center. This may lead to the loss or suspension of functions such as procurement from suppliers and delivery to customers, and potential risks affecting sales and operating income can be assumed.

Adaptation Initiatives

We have established multiple order centers, inquiry centers, and distribution centers to diversify risks in the event of natural disasters, and the resulting large-scale power outages and public transportation disruptions. In particular, we are promoting functional distribution by establishing distribution centers in different areas within the same distribution jurisdiction (Fig. 1). In Kansai area, the first distribution center was established in Osaka City, but in 2018, a new distribution center started operation in the neighboring city of Suita, achieving functional distribution within the same area (Fig. 2).

Based on the "ASKUL Business Continuity Plan Basic Policy," we have established a business continuity plan for various emergency situations based on specific disaster scenarios. This business continuity plan, for example, defines the structure of the disaster response headquarters and various responses and procedures in the event of a disaster. Water, food, and emergency evacuation bags are also stockpiled at each site, and satellite cellular phones are deployed at major sites as a means of emergency communication. In order to enhance the effectiveness of the business continuity plan, plans and manuals are regularly reviewed by the relevant departments.

Effects / Expected Benefits

One result of the functional distribution was in 2019 when the distribution center in Suita City was damaged by Typhoon No. 19 and its operation was reduced. we were able to minimize the reduction in sales by switching shipments to the distribution center in Osaka City.
The implementation of the business continuity plan is expected to ensure the safety of employees, continue providing services to customers even in emergency situations, and fulfill social responsibilities in the event of accidents and disasters.