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Watanabe Pipe Co., Ltd.

It is said that the U.S. economy is flourishing now because while the U.S. economy was slow, U.S. companies continued to invest in improving their information infrastructures. The CEOs of Japanese industries are finding it difficult to balance TCO reduction and positive investment. Watanabe Pipe Co., Ltd. solved this problem by introducing Hitachi's groupware "Groupmax". By introducing groupware, Watanabe Pipe Co., Ltd. optimized indirect business while maintaining a budget lower than the budget for maintaining their network during the era of mainframes. They also succeeded in strengthening their competitiveness, increasing information sharing, accelerating workflows, and providing new customer services through the Internet. At the same time, they prevented the increase of TOC through centralized management.

Revolutionizing distribution to reach the top of the industry

Watanabe Pipe Co., Ltd. has two faces: one as a trading company and the other as a maker. As a trading company, they deal in materials for plumbing, such as drain pipes, and steel materials. As a maker, they manufacture and sell agricultural materials, such as pipe-houses and steel frame houses. "We revolutionized the distribution of pipe materials," Mr. Moto Watanabe, CEO of Watanabe Pipe Co., Ltd. explained. For example, normally a construction company buys long pipe from one maker and pipe joints from another maker. Watanabe Pipe Co., Ltd. was the first pipe company to provide one-stop-shopping (collective purchasing and collective supply).

The marketing concept of Watanabe Pipe Co., Ltd. is summarized in one phrase; "SEDIA system". Mr. Watanabe says "The main point of the 'SEDIA system' is not only the purchasing and sales of products, but also the integration of products with services and technique to implement one-to-one marketing."

Groupmax will continue to reduce TCO

Watanabe Pipe Co., Ltd., is alone at the top of each market the company deals in and is expanding office space to over 154 locations. In 1997, Watanabe Pipe Co., Ltd. maintained 800 mainframe terminals and was running a tight network. However, the mainframe terminals could not optimize indirect business, so, in that year, they decided to install groupware. Mr. Watanabe, CEO of Watanabe Pipe Co., Ltd., uses a PC himself and is a chairman with a progressive spirit. "When we proposed the introduction of groupware, he quickly approved and actively supported our proprosal," said Mr. Igarashi, a group leader in the Information System Unit of Watanabe Pipe Co., Ltd.

There are four reasons to choose Hitachi's Groupmax.

First, Groupmax is a domestic software product, so you can easily incorporate your Japanese-oriented business customs into a Groupmax system.
Second, Groupmax has an excellent user interface, and even managers who are not familiar with PCs can quickly use the system.
Third, you can use Groupmax to centralize management, and as a result, reduce operating costs. Mr. Igarashi said "Reducing TCO is a major goal of our company, so we concentrated on centralizing management of our PC network that will be expanded to 1100 terminals in the next 3 to 4 years."
Fourth, workflows are easy to build, so you can build the workflows in your company without any outside help.

"If we have to contract an outside company to create the workflows each time one is required, we cannot estimate the future TCO cost. That is our largest problem," said Mr. Katsunuma, the operation group chief in the Information System Unit of Watanabe Pipe Co., Ltd. Once the system starts running, user requirements and the number of workflows to be built will inevitably increase. If a budget is required each time you order an outside company to expand the system, TCO will jump to an enormous cost. Mr. Igarashi emphasizes "We can manage operations and build a workflow system within the cost-efficient budget calculated before we installed the system. This type of software can contribute the most to reducing TCO."

Watanabe Pipe Co., Ltd. started using Groupmax at their headquarters in May 1995. They are quickly expanding their network to 154 locations throughout the country and plan to complete expansion in March 1999. The company is replacing the local frame-relay networks of the previous mainframe infrastructure with the outside frame-relay service of the groupware infrastructure. There are two systems; TCP/IP and emulators. Mr. Katsunuma said, "We could reduce line costs to between 60% and 70% of the line costs during the local line network era." They applied the budget savings to purchase new PCs and introduce groupware. "Now, the mainframe environment is faster and we can also use groupware within the same budget," Mr. Katsunuma explained.

Watanabe Pipe Co., Ltd. uses five Groupmax facilities; E-mail, Bulletin Board, Document Manager, Scheduler and Workflow. The new system was quickly established and enthusiastically accepted throughout the entire company thanks to the initiative of Mr. Watanabe, CEO of Watanabe Pipe Co., Ltd., who personally started using Groupmax, and the timely support of Hitachi Business Machine Co., Ltd., the supplier. Mr. Igarashi pointed out, "The efficiency of indirect business has dramatically improved; the reservation of meeting rooms, company cars and resort facilities is smoother; and employees praise the software. The most prominent difference is that E-mail and Bulletin Board have reduced 'invisible costs'." E-mail and Bulletin Board reduced not only telephone charges because of the decrease in telephone and fax usage, but also reduced "invisible costs", such as the costs of printing, copying, and delivering documents. They also have linked Document Manager to a mainframe. "Sales report files are updated every day on a mainframe, and then batch processing transfers the files to a Groupmax server during the night. Our PCs are equipped with Excel macros, so we need only click a button on the Groupmax window to display Excel tables or graphs that summarize the sales reports up to the day before," Mr. Katsunuma said.

Until recently, the sales reports were only available to managers who could use the basic system. Since they linked Groupmax with the mainframe, more managers can easily view the latest sales reports and apply the data. Of course, Groupmax also provides personal security settings for limiting the employees who can access data.

Developing intracompany workflows to greatly improve the efficiency of indirect business

Workflow is indispensable when optimizing indirect business. Watanabe Pipe Co., Ltd. has developed two workflows; a workflow for ordering stationery, and a workflow for ordering business supplies. They have been using both workflows since November 1998. The workflow for ordering stationery involves 120 workers in the head office. "The manager in the General Affairs department who orders business supplies merges all the completed order data. The manager simply copies the data to an Excel sheet and sends the data to the supplier. The burden of calculation has been greatly reduced. The manager can also quickly notify the applicants when the stationery arrives," Mr. Katsunuma said.

The other workflow is for ordering business supplies, such as ink ribbon cartridges for mainframe terminals. The workflow sends orders from nationwide offices to our headquarters. "Even though ordering business supplies is a simple job, managing the orders from 154 locations is very complicated. The job requires time-consuming tasks, such as calling to verify illegible print on a memo, or requesting that an old application form be updated to a new application form," said Mr. Katsunuma. Constructing the workflow enables the order to be processed even if the applicant or purchasing manager is absent. Employees are released from the paper work of filing and processing the application forms.

Watanabe Pipe Co., Ltd. develops all their workflows in their office. They intend to develop various workflows complying with user requests. "We are developing an application workflow for ordering business cards, name tags and uniforms. Also, we are planning to construct workflows that are linked to the mainframe system, such as a workflow for registering new customers," Mr. Igarashi said. The next goal is Internet linkage with Groupmax. "We want to strengthen our customer service by storing data on a Groupmax server and posting the information on the Internet," Mr. Igarashi said. Watanabe Pipe Co., Ltd. also has the goal of one day constructing an extranet with customers which will use the superior interface of Groupmax.

Watanabe Pipe Co., Ltd. has achieved its goal; optimizing indirect business and improving customer satisfaction without increasing investment in their information infrastructure.