Yamato Auto Works Co., Ltd.

Around-the-clock Truck and Bus Inspections and Servicing, 365 Days a Year 
Yamato Auto Works Co., Ltd.

Rendering Backup Vehicles Obsolete and Cutting Total Vehicle Management Costs

Yamato Auto Works provides vehicle management services for trucks, buses, and other commercial vehicles. The company's most significant advantage is its ability to handle vehicle servicing and inspections around the clock 365 days a year for companies with membership agreements. This enables the company to receive vehicles for servicing after the end of a regular workday and redeploy these same vehicles the following morning. As a result, member companies can dramatically reduce the number of backup vehicles and substantially cut vehicle management costs. On top of this, there are other major advantages for member companies such as the ability to inexpensively purchase fuel and insurance products and consolidate the management of vehicle management data. As of the end of 2010, the number of contract vehicles numbered around 88,000 for member company vehicles and 45,000 for Yamato Group vehicles, for a total of approximately 133,000. This comprises approximately 10% of all commercial vehicles used in Japan. In the future, Yamato Auto Works plans to increase this figure to 200,000 vehicles and expand the number of its service bases. 
(Reporting and editing by Nikkei BP Consulting Inc.)

Total Cost Reductions of 10-30%

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Keishirou Sasaki
President
YAMATO AUTO WORKS CO., LTD.

Tatsumi, Koto-ku, Tokyo is home to a high concentration of manufacturing plants and warehouses. In one corner of this district is a servicing plant marked with the Yamato Group's logo. From dusk through night, trucks and buses from a myriad of transport business operators gather at this servicing plant. They are driven by Yamato Auto Works' servicing supervisors who engage in the inspection and servicing of Yamato Group vehicles.

Yamato Auto Works President Keishirou Sasaki explains the special traits of the company's services: "We inspect and service the vehicles of cargo transport businesses and bus operators that have concluded a one-year servicing membership agreement with us. Our company's supervisors visit the business offices of member companies after their business hours have ended in order to pick up buses and trucks that need vehicle inspection or repairs. We finish up operations and return the vehicles to clients before the start of business the next day."

The Tokyo direct servicing plant, which has dramatically improved operational efficiencies, is located in Tatsumi. Yamato Auto Works has dubbed this type of plant "Superworks". At present, 23 of the 73 servicing plants located throughout the country are Superworks. "Because these plants go beyond previous notions of vehicle servicing plants, most visitors upon viewing Superworks seem to get the impression that requesting inspections and servicing from Yamato Auto Works would result in higher costs," says Sasaki.

Countless Member Companies Greatly Cutting Costs

Yamato Auto Works was established in 2003. Until then the Yamato Group had only inspected and serviced its own vehicles, totaling 30,000 in number, but "We wondered if we would be able to use our expertise to offer servicing for trucks and buses operated by other companies. We established the company after considering this," reflects Sasaki.

The around-the-clock 365 days a year operating system was developed as a way to differentiate the company from conventional dealers and servicing plants that inspect and service other companies' vehicles. Sasaki proudly asserts, "Consigning vehicle management to our company enables completion of vehicle inspections and repairs during the night after a company's operations end on weekdays or over the weekend. Recently other dealers and servicing plants that respond around-the-clock 365 days a year have come onto the scene, but many of them seem to only receive inquiries around-the-clock 365 days a year, with many cases of the operations themselves not being conducted on weekends or nights. It goes without saying that Yamato Auto Works can conduct operations during holidays and nights by acting based on its 'nonstop servicing' concept."

It is not uncommon for up to 5 to 10 days to be required for the return of a vehicle brought to a dealer or servicing plant by a transport business. Because transport businesses cannot stop making deliveries during this period, they are usually forced to own in advance backup vehicles, which is one major factor for rising vehicle costs. Though not always the case, Sasaki says, "They prepare at each base one backup vehicle or one backup vehicle for every 10 to 20 vehicles used in operations."

Becoming a Yamato Auto Works' member facilitates a dramatic reduction in the number of backup vehicles. In fact, many member companies claim that they have reduced the number of backup vehicles by more than half, and succeeded in dramatically cutting vehicle management costs.

Also Cutting Vehicle Fuel, Insurance, and Overhead Costs

Another significant advantage for member companies is the ability to purchase fuel and vehicle insurance at member prices. Combining the Yamato Group's purchasing power with that of each member company enables more economical purchasing thanks to scale advantages than if such purchasing was done individually, which results in cost cutting. In the same way, vehicle insurance policies with inexpensive premiums can be formed via Yamato Auto Works.

Also, in order to improve the operating efficiencies of a transport business, it is necessary to use vehicle data such as vehicle inspection times, tire replacement times, and brake malfunction histories to utilize vehicles without waste. However, many companies do not sufficiently utilize data after vehicle management becomes complicated when its fleet grows in size. In response to these needs, Yamato Auto Works provides a "Vehicle Management System" that enables the visualization of management data for each vehicle. Member companies can always use the Internet to check their own vehicles' inspection and repair histories, schedules, and the like, resulting in vehicle management cost reductions.

Sufficient inspections and servicing also effectively improves the safety level of operations.

Compared with private vehicles, Japanese law requires more stringent inspections and servicing for commercial vehicles. Performing statutory inspections once every three months and receiving a vehicle inspection once per year is mandatory. In reality, however, many transport businesses suffer from the burden imposed by those costs and therefore do not carry out the statutory inspection every three months, let alone receive vehicle inspections. "Our company accumulates data for each vehicle one by one and only replaces the necessary parts when it truly is necessary. If vehicle inspections are implemented only once per year, it is not uncommon for parts to be replaced early after determining that they would not last for 12 months even if they seem capable of lasting 11 months. Because our company frequently conducts inspections to check the status of the vehicles, parts capable of lasting 11 months are replaced after the 10th month. In the long-term, the accumulation of these differences results in a substantial difference in costs. Frequent checks facilitate both improved safety and cost reductions. Furthermore, because three-month inspections are implemented onsite in visits to garages by our company supervisors, they require no effort on the part of the member company. If there is any concomitant disassembly it is carried out at our company's plants. We also pick up and deliver the vehicles," explains Sasaki.

Member fees differ based on the vehicle model year, size, and manner of use, but in addition to the ordinary fee system in which the costs necessary for actual servicing are invoiced after-the-fact, Yamato Auto Works has also established a "Maintenance Pack 12 Month Fixed Amount Payment" through which a fixed amount is paid upfront based on an estimate of the servicing costs that will be incurred throughout the year. The use of a maintenance pack will prevent the considerable ballooning of vehicle management costs that occurs only during specific periods such as vehicle inspection times and thus facilitates monthly equalization of costs, creating an advantage in terms of budgetary management.

Improving Servicing Efficiency at Our 'Dream Plant' Superworks

Yamato Auto Works strives to improve operating efficiencies when performing inspections and servicing of vehicles from outside the Yamato Group. For example, it has implemented such reforms as the standardization of operational content so that operations are conducted in fixed procedures and timeframes to enable planned assignment of mechanics. It currently has established procedures facilitating completion of vehicle inspections by two workers in two hours for two-ton trucks, two workers in four hours for four-ton trucks, and three workers in seven hours for large vehicles.

At the same time it has also made substantial capex investments. "We have made a mechanic's dream plant a reality," says Sasaki. Superworks was constructed based on this concept. Its most distinguishing characteristic has been the creation of a 'one-stroke' line of flow that prevents the backlogging of vehicles after their arrival.

The complete vehicle inspection process is also conducted by a single supervisor from onboard the vehicle.

Mechanic Atsushi Yoshida is in charge of inspections and servicing at the Superworks Tokorozawa Plant (Tokorozawa City, Saitama Prefecture) which began operations in February 2010. He explains with a smile, "Thanks to the 'Sky Train' assistance device, which enables a single person to replace the tires of a large vehicle, the under-floor illumination, and the like, we have considerably improved operating efficiencies. This has also resulted in extraordinary reductions to the physical burden imposed by our labor." Mechanic Yuichi Kikuchi adds, "The facilities are completely outfitted with heaters and air conditioners. As a result we can complete our work even in the winter without wearing thick clothing, and detailed operations have also become much easier. The plant is a very friendly environment for us mechanics." Sasaki also explains with satisfaction, "Because we can return vehicles at the promised date and time, the plant is very customer friendly."

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Since many transport businesses position their servicing divisions as cost centers, large-scale investments are difficult for them. Because Yamato Auto Works has become a profit center that receives external vehicles as well, the making of bold investments is now possible. Sasaki beams as he says, "Morale of employees has been greatly improved due to the servicing divisions operating behind the scenes of transport operations taking a leading role in the business. We have continuously worked to improve our level and speed of operations so that we can handle an increasing number of commercial vehicles when dealing with clients from outside the Yamato Group. One such undertaking has been the encouragement of mechanics to acquire the automobile inspector certification that enables a single mechanic to perform the entire vehicle inspection. This has prevented us from having to wait for complete inspections at vehicle inspection time. Currently, more than 450, or a little over 60%, of our 750 mechanics have acquired this inspector certification."

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Supporting Bus Operators in Rural Areas

Yamato Auto Works is focusing efforts on assisting the vehicle management of bus operators. The company has proactively established new joint venture businesses with rural bus operators which have helped to save the jobs and equipment of rural bus operator's maintenance divisions. For example, the company established Yamato Auto Works Hokushinetsu in November 2006 via a joint investment with Niigata Kotsu and at that time also took in 77 employees from the Niigata Kotsu Servicing Division. Even now, the company is conducting management of vehicles from outside the Yamato Group in addition to the 850 Niigata Kotsu buses and the 500 Niigata district Yamato Group vehicles without drastically increasing the number of mechanics on staff. In the same way, Yamato Auto Works established a new company in 2008 after taking over the Vehicle Servicing Division of Iwateken Kotsu, which owns approximately 600 buses.

Sasaki views the state of affairs as follows: "In the future there will likely be an increase in the number of new companies formed in collaboration with cargo transport companies and of course regional bus operators. This is because employment can be maintained through our scheme involving the undertaking of maintenance of outside vehicles to create a profit center, resulting in improved employee morale."

In the future, the company's policy will be to further increase the number of servicing bases centered on government-ordinance-designated cities. The number of Superworks will in a few years be expanded to about 40 locations, more than double the current amount. At the same time, Yamato Auto Works plans to further enrich its menu of services to support member companies in all phases of the vehicle management chain, from purchasing through to disposal.


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About the Yamato Group

The Yamato Group includes the following companies: Yamato Transport Co., Ltd., which has developed an express delivery network nationwide; Yamato System Development Co., Ltd., which develops and operates diverse IT solutions including data centers; Yamato Home Convenience Co., Ltd., which transports and sets up consumer electronics, household goods, and machinery that cannot be transported via express delivery; Yamato Logistics Co., Ltd., which specializes in domestic and overseas logistics outsourcing; Yamato Financial Co., Ltd., which provides settlement services; and others. These companies pool their talents, which encompass "information, logistics, and settlement", to provide optimal solutions from a comprehensive perspective to the problems of client companies.