Japanese Delivery Firms and Restaurants Use AI to Streamline Business

Businesses explore innovative ways to reduce costs and increase efficiency using artificial intelligence

AI improves business
Diners in a Japanese restaurant
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A number of delivery companies and restaurants across Japan have discovered that applying artificial intelligence technology to their operations allows them to run their business more efficiently and cost-effectively.

With the growing demand in online shopping and a declining number of drivers, the parcel delivery sector is struggling to keep up with orders. Meanwhile, restaurants are finding it difficult to find ways to reduce waste in an industry where profit margins are notoriously slim.

Cutting down on wasted time and fuel expenses

Re-deliveries currently cost the parcel delivery industry around ¥200 billion per year in wasted fuel and labour costs. This is predominantly due to the fact that 1 in 5 deliveries are delayed because residents are not at home to receive their packages.

However, a start-up at the University of Tokyo, Japan Data Science Consortium Co. (JDSC),  believes it has come up with a solution to this issue. Using its own AI patent, which can analyse household electricity data, it can calculate when someone will be at home to receive a package during a specific time period.

A pilot study completed in 2018 saw the rate of re-deliveries reduced by 90 per cent. For the next stage of the project, JDSC will cooperate with Sagawa Express Co. and the University of Tokyo to conduct an AI demonstration to set up optimum delivery routes that take into account power usage data acquired from smart meters.

“Japan is one of the leading countries on smart meter installation and Japan has problems with re-deliveries, so that’s why Japan has become advanced in this area,” JDSC’s Chief Data Science Officer Shimpei Ohsugi said in an interview.

Smart meters are expected to be installed in all Japanese households by the end of March 2025.

Re-deliveries cost the parcel delivery industry around ¥200 billion per year in wasted fuel and labour costs

AI taking the guess work out of meal prep

While advanced AI is a major development in large companies, small to midsize businesses are also finding ways to use this new technology to enhance their operations.

Ebiya, a Japanese restaurant in Ise, Mie Prefecture, is pioneering an AI system that predicts the number of diners it will have with more than 95 per cent accuracy. This system has enabled Ebiya to boost its productivity, increase profits, and reduce food waste.

The system uses over 100 different data sets to predict the expected number of customers up to 45 days in the future. It incorporates factors such as weather forecasts and the number of pedestrians likely to pass by the restaurant into its predictions.

The AI has been so successful that the company’s president, Haruki Odajima, has made the system into its own business, EBI LAB, which other restaurants can subscribe to for a monthly fee.

So far, more than 100 restaurants have adopted EBI LAB’s AI system, with demand increasing.

Could AI help you to predict currently unknown variables within your operation? Let us know what kind of system you’d like to see in development in the comments below.

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AI’s ability to make accurate predictions can take the guesswork out of vital business decisions.

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Written by Catherine McGuinness

Writer and Journalist with a love for all things Japan.

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