Technology Innovation
Basic Philosophy
The KONOIKE Group’s business competitiveness depends on providing more attractive services, and we recognize the importance of innovation in the field to achieve greater heights in response to the recent and various changes in the logistics and warehousing industry. To this end, we opened the Konoike Institute of Technology Innovation Center (Giken IC) in March 2021, which has been at the forefront of accelerating technological innovation. It achieves this through three functions: (1) conducting experiments and proof-of-concept tests to confirm the effectiveness of new technologies and post-introduction operations by recreating various KONOIKE Group work sites at the Giken IC; (2) acceleration of open innovation in which customers and vendors of new technologies gather at the Giken IC to discuss and observe the recreated sites and new technologies, and; (3) engaging in technological development with customers that meets with their future vision as part of our sales activities. In addition, we have enhanced literacy training at the Group-wide level to ensure that technological innovations are instilled across the entire Group. In this way, efforts toward improvement we have taken together with field teams have gradually borne fruit. Going forward, we will continue to promote technological innovations directly related to the strengthening of field capabilities.
Mission
- Improvement of on-site productivity through technological innovation
- Internal and external consulting on technology implementation (Study of revenue models after technology introduction, improvement of operations after technology introduction, adjusting contracts and prices, etc.)
- Distributor equipment sales/sales of in-house developed equipment to new customers → Aiming to win contract operations
Changes in the Business Environment and Direction of Business Expansion Due to Technological Innovation
In recent years, as technology has enabled labor savings in warehouse operations, some major shippers have entered the third-party logistics (3PL) business so as to take advantage of their own expertise and volume capabilities to capture e-commerce. There have also been instances of logistics real estate companies entering the 3PL business themselves, and there are also companies that handle everything from picking to shipping simply by having sellers ship their products to a logistics center. Other companies use various technologies to standardize and streamline to eliminate 80% of non-storage logistics costs. On the other hand, the current business model of the KONOIKE Group is very different from that of other companies. While general logistics companies are contracted by their customers to provide 3PL services, the KONOIKE Group provides not only 3PL but also third-party purchase (3PP) services for further upstream operations. For a logistics company to undertake this level of manufacturing is a rarelyseen business model, and is highly regarded by external parties. However, in order to grow sustainably amidst a drastically changing competitive environment, it is essential to provide even higher value-added services. The key to this is technology. To date, we have obtained new contract operations by making proposals that adapt to customer requests, utilizing the experience, wisdom, and expertise possessed by the members of the KONOIKE Group. Going forward, we will also harness AI and robotics and run simulations to optimize operations, with the aim of providing services that only the KONOIKE Group can offer to determine if we can synergize between machines and people. At the same time, we will promote technological innovation with a view to providing consulting based on these services.
Approach to Strengthening Technology Capital
Strengthening our technology capital is equivalent to enhancing our ability to improve our workplaces, which is the source of our added value. This enhancement begins at the Branch Presentation Meeting, at which divisions connected to the head office actually visit branches to promote the introduction of new technologies such as automation, labor saving, and robotic process automation (RPA), as well as encourage the deployment of individual expertise and best practices throughout the Group (establishing a knowledge base), to achieve greater improvements in the field.
Activities Strengthening Our Field Capabilities
| Field innovation by introducing new technology | a | Number of automation and labor-saving devices installed in the field |
|---|---|---|
| b | Number of POCs conducted for introducing new technology to the field | |
| c | Number of devices introduced and technology tests at the Giken IC |