Nitori

Business challenge story

Gearing up for growth

As a leading company in the Japanese interior design industry, NITORI Co., Ltd. (Nitori) stands apart from its competitors through its original “Manufacturing, Logistics and Retail Sales” SPA model. The company recently achieved its 31st consecutive year of growth in both revenue and earnings. Customers can browse and buy a wide range of home furnishing and home fashion products in the company’s global network of more than 523 stores, including 56 stores in Taiwan, China and the United States as well as its online shop Nitori-Net.

 
Nitori has kept improving its own distribution systems and IT systems in order to efficiently and quickly ship products to stores and customers throughout Japan, as well as to reduce the cost of storing products. For example, beginning with implementation of the industry’s first automated multi-tier warehouse in 1980, Nitori developed its own unique systems for inventory control and the stable supply of products. Today, Nitori arranges the transportation of products from overseas factory to overseas distribution center, orders international container services to Japan through the bidding processes and customs procedures, arranges transportation from container yards to Japanese distribution centers, and then delivers products to stores and customers. All of the systems involved were developed and are operated by Nitori.

Behind the scenes, the company must coordinate a complex set of international design, manufacturing and logistics operations. For example, a Nitori store may need to confirm that a particular item can be delivered from its factory in Vietnam to one of its warehouses in Tokyo, requiring the seamless interplay of dozens of international and domestic processes between multiple subsidiary and partner companies. If in-store staff are not able to commit to a delivery date in minutes, Nitori could lose a sales opportunity.

For more than a decade, Nitori has relied on homegrown applications running on Oracle Database on IBM AIX and IBM Power Systems to ensure that these processes run smoothly, accurately and reliably. As the business geared up for further growth, however, it became clear that more performance and capacity were required.

Toshinori Arai of NITORI Co., Ltd., comments: “Nitori plans to have 1,000 stores by 2022, expanding further into China and the U.S. in particular, and expecting to generate an additional USD10 billion in annual revenue. The biggest strategic challenge we face is around how to open new overseas stores that fit well with the local market needs. But one thing is common everywhere in the world: the need to offer customers fast, reliable, trustworthy service that creates loyalty to the Nitori brand.” 

The company’s existing hardware was five years old, and while it had served Nitori well, the rapid expansion of the business during that period had stretched the server to the limits of its design. With the traditional springtime sales peak approaching fast, Nitori needed to upgrade within a very tight schedule.