South Korean industry embraces robots to ease labor crunch

South Korean industry embraces robots to ease labor crunch

South Korea’s logistics and restaurant industries are becoming leading sectors in robot adoption as labor shortages and a hike in the minimum wage prompt many companies to introduce work robots.

Major logistics companies have introduced transport robots to streamline package handling. A big food delivery service provider and a convenience store chain have begun testing fully automated robots to deliver products to customers’ homes.

In a logistics complex in the city of Gunpo near Seoul, one of many huge warehouses is the Fulfillment Center of CJ Logistics, a leader in South Korea’s logistics industry, which conducts packing and shipping services on behalf of an online retailer.

Visitors to the center are surprised to see warehouse shelves, each standing 278 cm high, moving freely on its second floor. There are 630 shelves on the 7,000 sq. meter floor, and 101 robots lift and move them loaded with merchandise.

In conventional packing and shipping work, workers go to shelves, pick up the ordered products and place them on carts. CJ has changed the process to let the shelves move to the workers.

When a worker inputs an order into the computer system, a shelf with an optimum selection of items moves into the packaging area. The worker then picks and packs them for shipping.

The new system, though it appears inefficient at first glance, is the result of scrupulous calculation by CJ’s logistics laboratory. Products in strong demand are put on a number of shelves and those that tend to be purchased together with them are placed on the same shelves.

The arrangement reduces workers’ waiting times — each can pack 23.8 boxes per hour, up from 15.4 in the past for an improvement of 55% in efficiency, according to CJ.

Engaging in packing and shipping daily supplies on behalf of major South Korean online platform operator Naver’s e-commerce mall business, the center handles up to 1,400 kinds of top-selling merchandise including face masks, detergent, and baby goods.

Capable of packing products ordered through different online shops into a single box, the new system reduces the cost of shipping and handling and improves convenience for consumers, CJ said.

CJ is developing its own systems by benchmarking and other leading logistics centers. “We will spread the Gunpo system of moving shelves to other centers,” the company said.

The minimum wage in South Korea, which has doubled over the past decade, will rise to KRW 9,620 (USD 7.39) per hour in 2023. Robots are finding their way into a variety of industries as the cost and scarcity of labor has made them price-competitive.

Robots are especially noticeable in the restaurant industry these days. Robot waiters, which deliver meals on trays to customers, were introduced about three years ago.

Robot chefs are a more common sight as well, capable of frying 50 chickens per hour or cooking “tteokbokki” spicy rice cakes for five people in 10 minutes.

A robot coffee server debuted at a large train station in Seoul recently. The robotic barista is now often seen working at small, unmanned cafés and serving coffee to people at subway stations.

South Korea is expected to experience a rapid population plunge in the near future as its fertility rate is one of the lowest in the world. The use of robots to ease labor shortages, therefore, is more acceptable than in other countries.

Corporate efforts to cope with higher labor expenses have resulted in the early adoption of robots.

One South Korean company has begun experimental operation of robots that deliver merchandise on public roads. The test was first launched by Woowa Brothers, operator of the country’s biggest food delivery app, using the “Dilly Drive” small delivery robot it developed.

The company is continuing the experiment at an apartment complex in a city on the outskirts of Seoul, as it awaits new regulations allowing the devices on sidewalks.

When Woowa receives an order, it sends the Dilly Drive to a restaurant. A restaurant worker loads it up, and it makes its delivery, carefully avoiding pedestrians and traffic.

A delivery app opens the lobby door of the target apartment and summons the elevator so that the Dilly Drive can reach its destination. The customer then receives a confirmation message on his or her smartphone, opens the robot’s lid, and picks up the delivery.

The South Korean government will clarify the legal definition of delivery robots and set safety regulations and other management standards later this year.

Under current traffic laws, delivery robots are defined as unmanned vehicles and thus are banned on sidewalks and crossings. A legal revision is expected to lift the ban in 2023, opening the way for the commercial use of the robots.

Lotte, the operator of the 7-Eleven chain, began testing a robot delivery service in 2021 in conjunction with robotics development startup Neubility at an apartment complex in Seoul. It will continue efforts to improve the accuracy and reliability of the robot before the expected legal revision, when it will begin unmanned deliveries in earnest.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.

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