BEIJING -- Garbage collection is an important service in any city, involving collectors working from early morning until late at night with trucks driving all around. Service providers continue to rely largely on manual labor and few of them have streamlined the physically intensive work with digital technology.
In China, however, there is a company -- Coollu Network Technology -- that offers system solutions combining software and hardware so that garbage collection service providers can use highly efficient data services. The company is trying to slash costs and improve efficiency based on the Internet of Things, or IoT. in the business sector. Adding data analyses using artificial intelligence technology, the high-tech company offers system solutions to improve the utilization rate of equipment.
Such measures enable a cost reduction of 10% to 15%, according to Coollu CEO Lou Zhaulu.
Demand for the company's systems are expected to keep growing as the market for garbage collection services is forecast to maintain double-digit growth this year.
Lou told Beijing-based tech news portal 36Kr that the collection service is faced with two problems. First, service providers have difficulty obtaining important data on equipment, collectors, the spread of garbage and other matters of concern for their efficient use. As a result, operational problems, such as equipment disuse and falls in capacity utilization, tend to occur.
A second problem is that the absence of operational data lowers the efficiency of equipment maintenance and raises the rate of malfunctions.
Coollu gathers data about garbage collection through IoT technology and analyzes it using AI algorithms to sharply improve operations, Lou said, adding that the company will, as an eventual goal, enable garbage collection service providers to improve equipment utilization in a "comprehensive manner," thus lowering the rate of idle equipment and malfunctions.
For data collection, Coollu has developed an integrated circuit, or IC chip, which is attached to garbage bins to show their locations and inform data centers when they are full, a "smart" bracelet to monitor workers, a device for "smart" maintenance of equipment and a service that forecasts glitches.
Coollu has been accumulating garbage collection equipment-related technologies for more than 25 years. Utilizing what is called a device fingerprinting technology, Coollu has built a glitch recognition database for trash collection. The first of its kind in the industry, the database compares individual equipment and types of malfunctions and analyzes findings using algorithm-based AI, making it possible to diagnose faults in equipment and offer advice on maintenance.
Garbage collection service companies adopting Coollu's solutions have cut the time wasted from equipment malfunctions, by 35% to 45% and improved capacity utilization of equipment by 50% to 55%, according to Lou. In addition, they have reduced maintenance costs by 20% to 25% and overall costs by 10% to 15%.
Lou attributes Coollu's competitiveness to its data as the combination of accumulated information on equipment with that on operations enables the company to provide garbage collection service providers with digital management systems, including the highly efficient deployment of trucks and maintenance of equipment.
Coollu sales mainly come from solutions for entire projects and data services deriving from them, Lou said.
Along with China's economic development, the government continues to boost investment in "environmental sanitation," which essentially means garbage collection service providers, fueling growth in the domestic market. According to the National Bureau of Statistics, the government spent 250 billion yuan ($35.16 billion) on environmental sanitation in urban and rural areas in 2018 for a three-year average increase of around 16.7%.
The market for environmental sanitation in China reached 220 billion yuan in 2019 and is expected to grow 11.9% in 2020 and 7.6% in 2021, Orient Securities said in a report.
Contracts on related services are also increasing. New orders placed in 2017 jumped 34.5% from the previous year to 30.1 billion yuan and 62.9% in 2018 to 49.1 billion yuan.
In the environmental sanitation sector, the ratio of gross profit to sales remains at a moderate 20% to 30% at listed companies such as Qiaoyin Enviromental Protection and Yu he tian, creating strong motivation for cost reduction and improvement of operational efficiency through digitalization.
36Kr, a Chinese tech news portal founded in Beijing in 2010, has more than 150 million readers worldwide. Nikkei announced a partnership with 36Kr on May 22, 2019.
For the Japanese version of this story, click here.
For the Chinese version, click here.