ICT Accelerating Value Creation

May 31, 2024

Strengths and characteristics of Kirin Group’s digital ICT and digital ICT policies

The use of digital technology is essential for the Kirin Group to realize sustainable growth in this society with increasing uncertainties. “Information and Communication Technology (ICT) accelerating value creation” is an organizational capability to help us realize new innovations in the Long-Term Management Vision Kirin Group Vision 2027 (KV2027), and we are working to promote digital transformation (DX). We are committed to the three following directions as value creation through DX: (1) “business process transformation,” in which we aim to improve productivity throughout the value chain through product development, simulations, and other activities that use AI across divisions and domains; (2) “value enhancement of existing businesses,” in which we promote the advancement of consumer understanding and the digitalization of the development processes and consumer contact points for existing products and services; and (3) “acceleration and development of new businesses,” in which we aim to launch new services that utilize digital technologies without being bound by our conventional business model.

  • The Kirin Group's DX Strategy. 2027 Vision. A global leader in CSV, creating value across our world of Food & Beverages to Pharmaceuticals. DX goals. All business and functional divisions are able to autonomously utilize digital technology to transform processes and create business. Value creation through DX. Value enhancement of exisiting businesses. Business process transformation. Acceleration and development of new businesses. Organizational capabilities to promote DX. Human capital. Organizational structure. ICT infrastruture.

  • The Kirin Group's DX Strategy. 2027 Vision. A global leader in CSV, creating value across our world of Food & Beverages to Pharmaceuticals. DX goals. All business and functional divisions are able to autonomously utilize digital technology to transform processes and create business. Value creation through DX. Value enhancement of exisiting businesses. Business process transformation. Acceleration and development of new businesses. Organizational capabilities to promote DX. Human capital. Organizational structure. ICT infrastruture.

Issues and progress since last year

In the 2022–2024 Medium-term Business Plan (2022–2024 MTBP), we have set the enhancement of organizational capabilities that promote DX as a top priority and are committed to human capital development and building a foundation. Toward realizing site-driven digital technology utilization, we have implemented the Kirin DX Dojo, a human capital development program for employees, and the Group DX Promotion Committee for exchanging opinions amongst promoters of DX from each business. Furthermore, we are promoting the creation of a work environment using ChatGPT, PoC (proof of concept) utilizing generative AI, and other DX, giving rise to many initiatives in business process reform, a priority area, and leading to the advancement and optimization of internal operations.

However, we still have a ways to go to produce results through the value improvement of existing businesses and the acceleration and development of new businesses. In the next phase, we will strive to maximize the value we provide to consumers and will secure high capabilities in business departments and departments specialized in digital technologies.

Strategy, initiatives, and results

In 2024, we will acquire competitively advantageous organizational capabilities in promoting DX by further promoting the (1) “evolution of DX human resource development programs,” (2) “cultivation of a culture that promotes transformation,” and (3) “enhancement of digital expertise.”

First, in regard to (1), the number of students of the Kirin DX Dojo exceeded 1,800 at the end of 2023, achieving the goal in our original plan 1 year early. Going forward, we will brush up the program to meet maturity levels and changes in society by reviewing the course in response to new technologies, such as generative AI, establishing a course specialized in improving business value and new business development, and more. Second, regarding (2), we have started the DX Awards for awarding excellent initiatives in DX and the DX FES, which encourages a business transformation mindset, to promote the cultivation of an organizational climate in which anyone, including those from overseas companies, can take on the challenge of DX. Finally, in (3), we are coordinating with talent management on a functional basis, a human capital strategy, to promote the acquisition of human capital with advanced digital skills and a diverse career background, regardless of being a new graduate or career hire, toward improving expertise. In the new domains of state-of-the-art technology utilization and more, we are actively collaborating with universities and venture companies.

By bringing together expert and diverse human capital and organizations, we will maximize the value provided utilizing digital technologies without being bound by the existing framework.

Example

Resolving worker shortages and reducing product waste through DX of the vending machine business

Starting in October 2024, Kirin Beverage Company, Limited, will gradually introduce Vendy, a new, optimized service developed by SoftBank Corp. that uses AI to operate vending machines, into vending machines managed by the Kirin Group. Through the DX of the vending machine business, we will optimize vending machine management and product lineups for vending machine locations, resolving issues of the vending machine industry.

Kirin Beverage has approximately 180,000 vending machines installed throughout Japan, and they are acting as an important touchpoint for consumers. Meanwhile, the diversification of consumer needs and life-style changes have made it necessary to improve profit, so we are working to change the business’s structure. In the vending machine management that is essential to maintaining vending machines, plans for product lineups, patrol routes, and more were being determined based on the experience of skilled planners. Due to this operational dependency and the experience of the people in charge, there were variations in judgement, leading to mismatched products lineups at each vending machine location, a lack of in-demand products, product waste, and inefficient patrol routes. In light of these issues, our company began to seriously consider the implementation of Vendy, which was being developed by SoftBank, who has deep knowledge on state-of-the-art technologies such as AI and big data, in 2022 in order to transform the processes and improve the value of the vending machine business. 

This project was led by the business savvy human capital of the Sales Department at Kirin Beverage using the digital skills they acquired using the Kirin DX Dojo and other methods. Additionally, the Digital ICT Strategy Department of Kirin Holdings Company, Limited, who has knowledge on AI utilization, also joined the project and worked to transform processes while combining their diverse expertise. The function verification of Vendy was performed jointly with SoftBank at the operation site for the vending machines managed by our Group. In addition to checking the service’s effectiveness and versatility, we collaboratively improved its functions based on the site’s feedback. Furthermore, we established a business process optimized for Kirin Beverage’s operations, based on the Group’s knowledge on AI utilization, to prepare for the service’s practical implementation. 

Vendy will gather data, such as the sales data of our company’s vending machines and cost information related to patrolling, analyze it using AI, and create an integrated plan for optimal product lineups based on the machine’s location, efficient machine visitation timings, patrol routes, and the number of bottles to be refilled. The generated plan can be checked by the person in charge and the manager by using a specialized application on their smartphones. Based on the results of the joint verification, the implementation of Vendy is predicted to reduce the worktime related to vending machine operations by about 10% and to increase sales by around 5%. By using the time gained from this time reduction to develop new vending machine installation sites, we can provide consumers with higher quality service. We can also promote human capital development by eliminating operational dependency and improving the flexibility of human resource placement.

Vendy is a useful system for resolving worker shortages and product waste for not only our company but also other companies involved in operating vending machines. By being the first in the industry to implement Vendy, we strive to optimize our operations and improve our service together with SoftBank to realize sustainable operations.