Sagawa Express drives business DX: Supporting frontline operations with Office 365 F3

Implementing Office 365 F3 to support frontline workers 

Upholding the corporate philosophy of “Trust, Creation, Challenge,” Sagawa Express Co., Ltd. (Sagawa Express) has actively advocated for digital transformation, or DX, since the 2010s to respond to changes in the logistics industry. 

As part of the DX initiatives, Sagawa Express introduced Office 365 F3, a Microsoft subscription service designed to support frontline workers, in October 2024. Sagawa Express, one of Japan’s major logistics companies, aims to address various challenges by streamlining frontline work and reducing the burden on Sales Drivers and sales office staff. These efforts will improve customer satisfaction and, ultimately, accelerate sustainable corporate growth.

Japan’s logistics industry has been facing the so-called “2024 Problem”—a serious truck driver shortfall triggered in April 2024, when regulatory restrictions on truck drivers’ working hours came into effect. In addition to this unique challenge for Japan, the current geopolitical instability is raising crude oil prices and, consequently, the transportation costs for industry players. These current challenges are added to the global need for efforts towards a decarbonized society and limiting greenhouse gas emissions. There are so many challenges that the logistics industry must address.

To address this array of issues, Sagawa Express has been digitizing its operations to reduce labor and improve efficiency. Kazutaka Nambu, General Manager of the Digital Planning Department, Sagawa Express Co., Ltd., spoke about the company's DX initiatives:

“Even before the 2024 Problem, there was the term ‘Delivery Crisis.' Anticipating Japan’s shrinking labor force, we pushed various DX initiatives, such as shifting from hand-written delivery slips to digital ones. In recent years, we have offered a service where customers use a common messaging app to specify the delivery date and time. We are continuously working to improve the customer experience as well as productivity in the field.”

Information disparity between workplaces posed by the introduction of Microsoft Teams 

As part of its DX initiatives, Sagawa Express implemented Microsoft Teams back in 2020, ahead of many other companies. Thanks to the early implementation of this communication platform, the transition to a remote working environment was smooth, even in the midst of the COVID-19 pandemic. However, it posed a new issue: 

“Teams became the common communication tool in the back office after the pandemic broke out. But Sales Drivers who delivered packages to customers were using a different communication tool and not Teams. So, real-time information did not reach Sales Drivers, causing an information disparity and insufficient information sharing among staff,” explains Nambu. 

The issue of information disparity became painfully obvious when faced with a major disaster, Nambu says. Conflicting information caused chaos in operations, and they encountered many cases where accurate information—a critical piece of successful operations—failed to reach the frontline. 

The recent rise in popularity of e-commerce sites resulted in an increase in the volume of shipments and therefore the burden on each Sales Driver. These changes in the business environment pushed Sagawa Express toward the company-wide implementation of Teams and the introduction of Office 365 F3.

“Each Sales Driver is our ultimate customer touchpoint. Providing a fulfilling work environment for Sales Drivers is the foundation of our values as a logistics provider. Everyone in the Digital Planning Department also felt the urgency to reform the Sales Drivers’ workstyle,” says Nambu. 

Collaboration with Microsoft Japan through extensive PoC and the development of future visions 

Office 365 F3 is a SaaS tool designed for employees without user-assigned PCs working in manufacturing, retail, and other field locations. The tool is accessible from non-PC devices using the application specialized for frontline work. 

As the first step, Sagawa Express studied the benefit of replacing the existing Sales Drivers’ communication tool with Teams. 

“The communication tool previously used by Sales Drivers had a chat function, but it only allowed a limited number of IDs. The license was linked to a sales office and not to an individual user, so each person had to check that they were communicating with the right person every time. Teams allows communication with a specific person. Most of all, the same information can be shared with all licensed users at the same time, which I felt was a great benefit to us,” says Takanori Ohta, Assistant Manager of the IT System Planning Section, Digital Planning Department, Sagawa Express Co., Ltd.

According to Ohta, his team made sure that the proof of concept (PoC) was carefully and thoroughly conducted before full implementation. The PoC process spanned four years. “We did not just want to replace the tools and call it a day," explains Ohta on why it took so long. "We spent a lot of time examining what new values could be created and whether the new system was scalable for future use.” 

Microsoft Japan provided significant support through the PoC, as Nambu recalls. One such example was an on-site trial at four selected sales offices with different locations and customer profiles. Microsoft Japan members visited the trial sites and interviewed Sales Drivers and sales office staff before proposing trial plans. Sagawa management was also invited to Microsoft Japan's corporate building on multiple occasions, where explanations were given in detail—from how to use the tools to the vision for future utilization. 

“Logistics work in the field starts early in the morning. I was amazed at how frequently the Microsoft Japan members made early-morning visits to our sites. I feel that they took a really close look at what was actually happening in the field and provided feedback that was real and made sense to us," says Ohta. 

“Thanks to Microsoft Japan’s efforts to communicate directly, our management team understood the project, which led to a smooth implementation. Our vision was not only to use Teams as a communication tool but also utilize Office 365 F3 to capture information from the frontline, convert it into data, and utilize it for business strategies. Sharing our visions with the management team was a boost to the implementation,” says Nambu.

PoC trials at sales offices demonstrate a large reduction in phone usage between staff, with positive feedback following the implementation 

“Microsoft Japan helped us on the technical side as well," says Yutaka Yoshida at the IT Systems Planning Section, Digital Planning Department, SSagawa Express Co., Ltd. Yoshida was a member of the PoC project led by Ohta. 

“We installed Teams at different times during our trial, and we struggled with setting up different versions of Teams. Microsoft Japan responded to our inquiries quickly, so we were able to give instructions to the site in a timely manner. Even now, Microsoft Japan provides suggestions on operations. I hope that they will continue supporting us,” says Yoshida. 

The PoC project progressed steadily, aiming for full system implementation. During the field trials, some users voiced their feelings of uncertainty toward the new tool, but such voices subsided as users became accustomed to it. Then, the team began receiving positive feedback, saying Teams as the common communication platform had made their work go more smoothly. Eventually, new uses of Teams emerged organically, such as the information exchange among Sales Drivers. 

That was not all. The volume of Teams chat increased between Sales Drivers and the Customer Service agents at the sales office, reducing their time spent communicating with each other on the phone. 

“The less time the Customer Service agents spend with Sales Drivers, the more time they have for calls from customers. Less time on the phone means Sales Drivers’ work is interrupted less frequently. Chat leaves a record of communication, preventing the mishearing of information or remembering it incorrectly. That’s another plus,” says Ohta. 

The PoC phase demonstrated the real potential of Teams usefulness, and so it was rolled out to the entire organization in October of 2024. Internal communication was unified into one single platform from start to finish. 

There were many inquiries regarding usage immediately after going live, just as there were during the on-site trials. But now the situation is settling down, according to Yoshida. Aiming to familiarize users with Teams, the IT project team created a user Q&A channel accessible only by the Teams utilization promoters. This channel is now functioning like an FAQ. 

“Interestingly enough, we are starting to see cases where staff at other sales offices answer questions before we do. Some people feel excited about learning and becoming skilled in the new tool. There is growing interest in whether employee engagement with Teams could be included in performance evaluations and other personnel aspects in the future,” says Yoshida.

Key is to continue progressing and utilize the data for company growth

The project is going smoothly, but "My biggest concern now is the risk of complacency,” says Nambu with an unyielding expression on his face.

“Teams has made it convenient for frontline staff. But that’s not our ultimate goal. We have our eyes fixed on a vision. We want to create a platform where frontline staff can improve their own operations and share those improvements horizontally. Those improvements can be implemented across the organization where needed. Also, we want to create a cycle of receiving frontline data and utilizing it for corporate business strategies," says Nambu.

To achieve this vision, Sagawa Express has recruited "Teams Promoters" at each sales office. By nominating Teams Promoters, the company encourages the sharing of useful tips when using Teams and utilization of Office 365 F3 by, for example, using Forms to reduce labor required in tabulation tasks and using Power Platform, a no-code low-code tool, to develop applications to improve workflow.

“It is critical that the frontline staff drives improvements. It is like giving a big blank canvas to each sales office. I want our frontline staff to use Office 365 F3's functions and paint their own pictures of how they can improve their productivity," says Ohta.

“The Digital Planning Department is also discussing how we can get users to maximize their use of the tools," says Yoshida.

“Our goal is to ensure that each of 50,000 Sagawa Express employees is able to use the tools appropriately exactly when and where it should be used. Just as we share sales success stories with our colleagues across the country, I hope to be able to share and implement best practices for the digital transformation of the sales office," says Yoshida.

Nambu emphasizes the significance of transforming workstyle digitally, saying, "Efficiency improvements in the field shaves minutes or even seconds from working hours. The accumulation of these small reductions helps to improve customer satisfaction, reduce the time driving trucks, and ultimately helps solve social issues such as a reduction of greenhouse gas emissions.” He continues to express his vision for the project. “Our ultimate goal is to accumulate the information entered at the frontline, combine the data with the use of other tools like AI, and utilize it for customer management and sales support.”

“One of the key success factors in this project was the way Microsoft Japan supported us by walking alongside us. We are grateful to the Microsoft Japan team for supplying the missing pieces to in-house resources, such as providing information on industry best practices and IT trends,” says Nambu.

Spending four years on the preliminary studies and PoC, diligently gathering the voices of frontline staff, minimizing confusion in the field, and developing the solutions that are truly necessary now and for the future vision. This approach by Sagawa Express is a great example for companies in the manufacturing and retail industries, whose success depends on frontline workers.