The logistics industry finds itself face-to-face with diverse issues, primarily in the areas of warehousing, transportation, and delivery. These include shrinking package sizes, increased package delivery frequency, a shrinking labor pool, work style reforms, and supply chain diversification. Toshiba's goal is to solve these problems by optimizing logistics worksites through "the Best pairing" of manpower and material handling in warehouse. We're using the robot technology and AI technology we have developed over the years, together with the warehouse management system (WMS) and other systems created by the expertise we have developed in supporting our own logistics worksites as a manufacturing industry. We combine them to optimize the work performed by people and by robots throughout the warehouse. Let's look at our warehouse automation solutions, starting with an overview of warehouse automation.

The environment surrounding the logistics industry has changed drastically in recent years. In order to combat the COVID-19 pandemic, people have refrained from going out and companies have introduced remote work systems. This has increased the amount of time that people spend at home, producing so-called "nesting" demand and a dramatic expanding into the size of the e-commerce market. The rise in household and personal demand has led to packages becoming smaller and a prominent increase in the number of shipments (higher shipping frequency), which is placing an ever-growing burden on companies in the logistics space.

In addition to the shrinking of the labor force due to Japan's low birth rate and aging population, measures related to the Act on the Arrangement of Related Acts to Promote Work Style Reform (the logistics industry's "Y2024 problem") and white logistics initiatives which aim to address problems with truck driver working hours and roles are being implemented throughout the logistics industry, and it has become difficult to secure sufficient drivers. Because of this limited labor pool and the rapid rise in the amount of product shipping, Japan is said to be at the precipice of a logistics crisis which would stop the very transport of goods. For logistics-related companies, efficiently handling shipping work within warehouses and efficiently delivering goods with limited personnel has become a pressing issue.

From a logistics perspective, it is also vital to carry out initiatives that contribute to the realization of carbon neutrality by ending dependence on fossil fuels and to implement measures to protect manufacturing industry production plans from the effects of supply chain disturbances, including import- and export-related issues. The costs involved in logistics also present a problem. Logistics-related companies face various costs, such as transport, storage, and packaging costs. Transport accounts for 60 to 70 percent of these costs, and most transport costs consist of personnel costs.

From a cost perspective, improving the efficiency of transport is an important issue. To address this issue, companies are being called on to use cooperative delivery and to improve vehicle loading ratios. However, companies are reaching the limits of what they can achieve through measures that address transport alone. They need to seamlessly integrate their transport and warehousing mechanisms, improving the efficiency of both. From the warehouse side, warehouse operations need to be made more efficient in order to contribute to transport efficiency improvements.

In other words, the movement of goods can no longer be thought of in terms of "warehousing" and "transport" in isolation. Instead, they need to be connected and combined with services to optimize logistics as a whole.

To tackle the varied problems faced by the logistics industry, Toshiba develops warehouse execution systems (WES). Toshiba's WESs evolve through four steps: distribution center optimization, transport and delivery optimization, transfer center optimization, and logistics data platform integration (Fig. 1).

WESs are the systems and services used to create work plans for the employees and robots working in warehouses, monitor their progress in real time, and optimize overall warehouse operation. Distribution centers (DCs) are warehouses that store and manage goods and ship them when requested. Transfer centers (TCs), on the other hand, immediately sort and restack goods when they arrive, dispatching them to their final destinations.

Distribution centers, the target of the first step of WES evolution, have picking robots that select only goods which have been requested from the goods stored in the warehouse and transport robots which move the goods. The goal of these WESs is to coordinate the operation of these different types of robots, together with human workers, to optimally operate the warehouse as a whole.

The second evolutionary step requires functions for coordinating with the platforms used to manage truck dispatching and delivery conditions (dynamic states) to increase vehicle loading ratios and shorten the wait times of drivers in berths (areas in warehouses and logistics centers where trucks park so that goods can be loaded or unloaded). In this step, measures are taken to smooth coordination between warehouses and vehicles and to improve driver’s operation efficiency.

In the third evolutionary step, the transfer center step, conveyor belt-like material handling equipment and sorting devices are coordinated to improve sorting operation efficiency. Measures are implemented to improve overall throughput, from receiving to shipping, from warehouses to vehicles, and for warehouses as a whole.

In the last evolutionary step, the warehousing and transport data from the previous measures are utilized to optimize operation, looking at the work performed in the warehouse and the transport of goods as a continuous, holistic process. We are also engaged in ongoing development of WESs to link them with newly-created logistics-related platforms and the like to maintain inventory operation that looks not only at warehouses but also at the movement of goods (inventory) being transported. The aim is to optimize inventory levels, ensuring that there are neither shortages nor surpluses.

Toshiba's WESs provide functions essential to these steps, automating warehouses as only Toshiba can based on the expertise, knowledge, and technologies we have developed through the years.

The process of warehouse automation rarely involves the installation of automation machinery (robots) all at once in massive warehouses handling large volumes of goods. Generally, robots are deployed gradually, over multiple stages. Joint work by humans and robots is an unavoidable part of the process.

That's why we are working to optimize warehouses by "the Best pairing" with manpower and material handling, combining our logistics worksite expertise, intelligent robots, and optimization technologies. (Fig. 2)

First, let's look at our logistics worksite expertise. Toshiba's logistics operations are supported by warehouse management systems (WMS). WMS are systems for managing inventory and operations within warehouses. Toshiba's WMSs were developed based on the expertise regarding warehouse logistics worksites that we have accrued through our years as a manufacturer. This includes not only merchandise receiving, merchandise dispatching, and inventory management, but also the management of cargo allocation for trucks, truck dispatching and receiving, and cargo loading and unloading. Our WMSs visualize and analyze warehouse inventory and truck conditions, providing an understanding of work progress throughout the warehouse. This makes it possible to issue accurate and appropriate work instructions to personnel. The greatest strength of these systems is that they can backtrack from truck departure times to plan when to unload inventory and load it onto trucks and to create corresponding work instructions. The systems' analysis and simulation results contribute to overall warehouse efficiency improvements such as by optimizing personnel and inventory allocation. We provide these functions through our Warehouse management Package*.

* Warehouse management Package is not currently available for purchase outside Japan.

Next, let's turn our attention to intelligent robots. Toshiba robots perform precise unloading, transport, picking, and other operations, working with diverse types of warehouse inventory that comes in various weights and sizes and responding to changing worksite conditions. Toshiba's manufacturing DNA dates back over 140 years. We have maintained that DNA to this very day, using it in our intelligent robot development. These robots are controlled by warehouse control systems (WCS). WCSs are systems that control the equipment in warehouses, monitoring and issuing commands to robots in real time.

Last, let's look at our optimization technologies. Toshiba has the world's third highest* number of submitted patent applications for AI-based optimization and mathematical optimization technologies. We combine them to create advanced optimization technologies. These optimization technologies make it possible to forecast work results based on work contents and constantly changing environmental conditions, and then to use those forecasts to create ideal work plans. Employing these plans when performing work raises the level of efficiency in warehouses.

* WIPO Technology Trends 2019 Artificial Intelligence

Toshiba's WESs utilize optimization technology and Toshiba's expertise in warehouses and robots to appropriately allocate work to people and robots. The optimized work plans proposed by WESs, based on the characteristics and capabilities of people and robots, are used by WMSs to issue instructions to personnel and by WCSs to issue instructions to robots. This is warehouse automation by "the Best pairing" with manpower and material handling. Furthermore, WESs contribute to the efficiency of the overall warehouse operation by its function of monitoring the real-time work progress of both humans and robots, and by flexibly reflecting suddenly occurring works in work plans.

Toshiba's WESs can be connected to WMSs and WCSs from other companies. Verification work is currently underway regarding integration with various systems and devices. One example of this integration is customers using their WMSs to issue work instructions to personnel based on optimized personnel work plans created with a Toshiba WES. Another is using open Application Programming Interfaces (APIs) to connect various robots and material handling equipment to the WES and operate them.

Toshiba's WESs are continuing to evolve. Going beyond distribution center optimization, they're optimizing delivery, transportation, and transfer centers. They're integrating with logistics-related data platforms.

That evolution involves linking to various transport management systems (TMSs) and shipping company systems to improve truck loading ratios and consolidated shipping ratios. It also includes using AI to forecast changing shipping demand based on the amount of goods being shipped and truck operation data. Through these measures, WESs are further raising shipping efficiency and contributing to carbon neutrality. Toshiba and WingArc1st Inc. are working on a new initiative in which we aim to create new business by linking the data and digital technologies of their respective platforms.

Furthermore, Toshiba is providing customers with new value, created using collected data and Toshiba's advanced digital technologies. This data includes inventory quantities, delivery routes, and work shifts which have been optimized by applying Toshiba's AI-based optimization technology, mathematical optimization technology, and SQBM+ quantum-inspired optimization solution to a wide range of data regarding goods. This data, which concerns production and delivery, inventory, customs, demand forecasting, production plans, and transactions, is collected by WESs through their integration with external platforms and services.

Toshiba will continue to solve the numerous challenges faced by the logistics industry through its logistics solutions, which continue to evolve with our worksite expertise and advanced technological capabilities.