Warehouse in Japan getting used to AI

Daiwa House Industry plans to use robots and artificial intelligence to operate warehouses in Japan, drastically reducing labor needs at the facilities.

The Osaka-based company envisions leasing such sites to e-commerce companies and other businesses. The system will use shelf-carrying robots dubbed Butlers that were developed by India’s GreyOrange. Daiwa House will work with Ground, a Tokyo company licensed to sell the robots in Japan, to co-develop the system. The two companies will form a capital partnership.

When an online order is placed, a robot can carry a movable shelf containing the items to a workspace to prepare for shipping. To raise efficiency, artificial intelligence can position frequently ordered items closer to the workspace, for instance.

The technology will be installed first at a 150,000-sq.-meter warehouse to be completed next year in Nagareyama, Chiba Prefecture. A facility this large normally requires 600 employees. But 100 or so robots would reduce the necessary staff to about 100, while enabling round-the-clock operations.

Introducing the system will likely require investment of around 1 billion yen to 2 billion yen ($8.8 million to $17.6 million). While tenants would shoulder the expenses, their operating costs are seen declining by more than 30%, since labor accounts for roughly 80% of those costs. Warehouse employees are said to spend two-thirds of their work hours walking. Robots can reduce this and also cut heavy manual labor, making it easier to recruit new staffers.

The system will be adopted gradually at multiple facilities, including new and existing sites. In the future, artificial intelligence may also issue work instructions to humans.

In addition to efficiency boosts inside the warehouse, the system will also seek to optimize transportation by trucks. By connecting with couriers’ systems, the size and number of trucks needed can be specified based on delivery locations and volume of goods, and cargo can be grouped together appropriately. Trucks are expected to be loaded to 65% of capacity from the current 50% or so — helping allay driver shortages.

Daiwa House has been strengthening its logistics business, and seeks to increase sales from the business-facility segment by 25% from fiscal 2015 levels to 918 billion yen in fiscal 2018. It aims to boost operating profit 19% over the same period to 81 billion yen.

Facing the same challenge of labor shortages, other companies are taking similar steps. Furniture purveyor Nitori Holdings plans to put 80 or so Butler robots in operation at a delivery center in Osaka Prefecture as early as this fall. Amazon Japan already uses robots at its logistics centers.

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