We want to be a platform that brings happiness to everyone involved– The Future of Technology and Our Approaches to Solving Social and Economic Issues –|Shoichiro Iwata President & CEO ASKUL Corporation|Interviewed June 2017
  • Reflecting on the Year Ended May 2018
  • Further development of environmental initiatives
  • Deeper Approaches to Social Issues
  • Use of Technology and New Organizational Structure
  • Giving total support for the happiness of workers for the happiness of the entire world

Reflecting on the Year Ended May 2018

Recovery After the Fire and Further Evolution
After the fire at our logistics center in February 2017, the ASKUL Group considered the fiscal year ended May 2018 as a year of consolidating the foundations for complete recovery. Throughout the year, the entire organization has worked toward that goal as a united force. In April 2017, we launched ASKUL Value Center Hidaka (AVC Hidaka), our first dedicated logistics center for our consumer e-commerce service, LOHACO. By September, shipping capacity and product numbers had recovered to pre-fire levels. In February 2018, ASKUL Value Center Kansai (AVC Kansai), ASKUL’s largest, state-of-the-art logistics center, was fully commissioned. This marked the completion of preparations for complete recovery and further evolution.
Living Together with Local Communities
Our two new centers, AVC Kansai and AVC Hidaka, are working to strengthen their fire prevention and disaster readiness systems, including in the areas of equipment and large-scale fire and disaster drills. They have also concluded agreements regarding disaster assistance with their respective local governments, the City of Suita in Osaka Prefecture and the City of Hidaka in Saitama Prefecture, with the objective of fulfilling roles as local lifelines in the event of a disaster by providing food, daily necessities, and other relief supplies. Our logistics centers aim to live together with their local communities and become centers that will contribute to the region.

Further development of environmental initiatives

Achieving the 2030 Zero CO2 Challenge
In terms of the environment, in November 2017, we held the ASKUL Environmental Forum 2017 and announced our membership in two international initiatives, RE100 and EV100. We have joined these initiatives as part of the 2030 Zero CO2 Challenge that we announced in 2016. ASKUL is the first Japanese company to join these two initiatives simultaneously.

In the RE100, or Renewable Energy 100 initiative, companies commit to sourcing 100% of their business energy consumption from renewable sources. In its first phase of this initiative, ASKUL switched to renewable energy for 25% of its power consumption across the entire group. (As of July 2018)
EV100, or Electric Vehicle 100, is a global business initiative to promote the use of electric vehicles for commercial fleets and the establishment of environmental infrastructure. ASKUL has committed to the 100% transition to electric vehicles for the vehicles owned or leased by ASKUL and ASKUL LOGIST by 2030 and has begun working toward that goal.

With these recent announcements and our membership of these initiatives, I have felt the great significance of “taking the wheel.”
Unfurling and clearly showing our banner, that is, making our position on the environment known, has helped us to connect in various ways with industry, government, and academia, and across national borders, greatly expanding our world. Declaring our intentions has become our passport to the world, a fact whose great significance and gravity has already been brought home to me on numerous occasions.
Although the future may be somewhat unclear, I hope that, by taking the initiative and taking action ourselves, we can start some kind of trend and encourage other companies.

We will be holding the ASKUL Environmental Forum again in 2018 (October). At forums such as this, first, we will explain our positions to people from the environment, general administration, and purchasing departments of a range of companies. We want to value the building of “connections” with people who have taken steps toward a better future ahead of the rest of society, people who are highly sensitive toward the environment and people who have a strong awareness of socially-conscious sourcing. When we consider their effectiveness, these declarations and initiative memberships, with which we will forge our path to becoming an environmentally advanced company, are very valuable and beneficial challenges.
Of course, we need to do more than just talk. If we do not devote time and passion, we will not achieve results. Having made these declarations and committed to these causes, we must now brace ourselves in the knowledge that it is vital that we take that first step toward taking action and keep that action going.

Deeper Approaches to Social Issues

Pursuing the happiness of all involved
In my Top Management Message on CSR last year, I said that I wanted to bring happiness to all of our associated stakeholders. This has the same roots as the concepts of “Three-Sided Mirror Management” and “Social Optimum” that I have spoken about in the past. In terms of “associate stakeholders,” in addition to living together with local communities and environmental initiatives, sourcing of raw materials is another major social issue for ASKUL. For example, in cases where the livelihoods of the local people are at stake, there are problems that cannot be resolved simply by changing where we purchase from. How far should we become involved in such structures and what should we do? While there is no cut-and-dried answer to these questions, at ASKUL, we are currently considering a review of our sourcing policies. For example, it may become necessary for us to declare that we will change the composition of the products we handle into the future. There may be something we can do to help solve issues such as environmental destruction caused by plastic waste and its adverse effects on the oceans and ecosystems. Instead of just putting up with new “inconvenient truths,” it is important that we resolve to declare our position when we notice something that needs addressing and actually put our words into action.
Worker perspectives and creating pleasant workplaces
Currently, one of our more pressing problems is what has become known as the “delivery crisis,” that is the shortage of delivery drivers and rising delivery costs.
ASKUL has been actively addressing this issue for some time by bringing delivery operations in-house within the group and employing more drivers.
In 2016, we adopted a system of automated route creation that takes advantage of AI and big data. Not only has this helped to raise the quality of our deliveries and lower costs, but also helped to achieve a low rate of missed deliveries (re-deliveries) due to nobody being home, of just 2%. I believe that its biggest impact has been the improvement in the way the drivers work. In future, as we move toward our EV100 goals and start to deliver cargo in state-of-the-art electric trucks, this will go some way toward raising the motivation of our drivers.

Delivering happiness to our customers. Lying at the very heart of that goal is the happiness of the people who work for us.
For example, at AVC Kansai, efforts are being put in place to create a pleasant workplace. This includes the provision of free hot meals for employees at a cafeteria with its own kitchen. It is only when our workers are happy that we will be able to deliver happiness to our customers.
There is quite an obvious difference in the results between goods that have been packed with feeling by people who are engaged seriously in their work and goods that have been prepared reluctantly by people who are just going through the motions. In fact, data shows that improvements to the workplace environment have a positive impact on rates of responses to positions vacant advertisements and retention rates, and even on operational efficiency.
Also, when I travel around our logistics centers, I have noticed that, in the places with good conditions, people are always smiling and greeting each other.
A real workplace is one in which there are smiles on the faces of the people working there, a feeling that results are being achieved as a team, and a sense of connection between colleagues in the same workplace, including those with disabilities. That is what I believe. Instead of feeling cross and annoyed when we work, if we greet each other cordially and engage sincerely in making improvements together, this will naturally lead to better quality. I also believe that this, in turn, will lead to higher staff retention rates and to improvements in workers’ health.

I personally hold firm ideas about the issue of health. For example, at the logistics center in Fukuoka, not only are staff provided with free meals, every month, a meeting of the Cafeteria Committee is held to examine the effectiveness of the cafeteria and consider ways in which it can be improved. They invite nutritional experts from universities to provide advice on balanced meals, incorporating their views into the development of menus for the cafeteria.
When we were first considering the introduction of free meals, we held many discussions within the company. Some people were of the view that it would be better to increase wages, even if by just a little, but we found that, as a result of devoting more attention to improving the workplace environment and our people, responses to our wanted ads increased. There was a visible improvement in productivity and obvious changes in the atmosphere in the workplace, so the results have been very good.

Use of Technology and New Organizational Structure

Over the years, we have invested in technology for the evolution of ASKUL, but to step up the pace of that evolution, in December 2017, we restructured our organization, creating a new organization, called Future Platform Architecture, under the direct leadership of the CEO. With separate divisions for areas such as delivery, logistics, and IT within this Architecture, and a Technology Center as a hub division, it is now working on the further integration of advanced technology into our business by directly linking big data, AI, and other technologies to these various areas.
Design and technology are the same in that they involve displays of creativity. The aim behind this restructuring is to come up with new ideas and review the way we have done things to date from their very structure, just as is done in the field of architecture.

Specifically, as a first stage, we are working on a logistics sharing initiative, which we have named OPA, short for Open Platform by ASKUL. This approach to solutions in the area of product range, convenience, and costs will not only create a win-win-win situation for customers, manufacturers, and the company. It also has the potential to lead to solutions to social problems such as the burden on the environment caused by deliveries and labor shortages. This is why we are devoting our efforts to this project.
(*OPA is a business initiative in which we offer our logistics and marketing platforms, which are our corporate strengths, to outside parties.)

Giving total support for the happiness of workers for the happiness of the entire world

Helping workers to be happy
Meanwhile, when we consider the current trends in labor reforms, new office styles, and work styles, how should we approach “health-conscious management” of large corporations and how do we help society and our customers so that the people who work for us can do so in a healthy, comfortable manner? I am greatly interested in finding answers to these questions. It may be by providing nutritionally balanced hot meals and creating spaces in the offices where people can gather. I hear that the kitchenette is often the center of communication in offices in the West, so perhaps we can propose similar spaces that will foster communication.
While it is important that we deliver what are needed as we have promised, at the very least, simply selling things cheaply will not be enough for us to stay a going concern.

We need to become a company that is able to provide total support for the happiness of the people who work for us.
Connecting workers’ happiness to the happiness of the entire world, and solving problems in society and the environment.
At this stage, many of these ideas are just broad concepts, but we must now ask ourselves how we, as ASKUL, can put them into practice.
I want ASKUL to be a presence that will address these issues seriously, but in an enjoyable way.

June 2018

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