TOKYO -- Telecom provider Nippon Telegraph and Telephone and trading house Mitsubishi Corp. are joining forces to disrupt Japan's 50 trillion yen ($450 billion) logistics industry, using artificial intelligence and digital technologies to improve operational efficiency, Nikkei has learned.
The alliance will first provide the service to the food distribution industry, helping suppliers to deliver the right food at the right time to retailers, which will subsequently help reduce food waste.
The plan is to have manufacturers, wholesalers and retailers communicate in one language, so to speak, unifying the different product codes currently used in inventory management.
AI analysis will help them predict demand and image recognition technology will be used to classify products. Blockchain technology will be introduced for information management.
On the delivery front, NTT and Mitsubishi will use big data analysis to find the best routes.
Distribution costs in Japan are estimated at 50 trillion yen, with food logistics alone reaching trillions of yen. As the logistics and retail sectors face personnel shortages and rising labor costs, demand is expected to rise for digital technologies that can help streamline operations.
NTT has been working on AI research in a groupwide effort. By teaming up with Mitsubishi, which has domestic food wholesaler Mitsubishi Shokuhin and convenience store chain Lawson under its umbrella, NTT hopes to recruit companies in a wide range of industries.
The partners plan to license their digital product management system to others, with an eye on logistics operations in such fields as construction materials. NTT targets hundreds of billions of yen in annual sales.
NTT positioned digitization support to clients as a core business in its medium-term business plan unveiled in November 2018. Meanwhile, Mitsubishi in April launched a team to draw up strategies and promote the shift to digital.