ITOCHU Announces Full-Scale Launch of Digital Transformation in Food Supply Chain

February 1, 2021

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today that in collaboration with Nippon Access, Inc. (headquartered in Shinagawa-ku, Tokyo; Junichi Sasaki, President; hereinafter “Nippon Access”), a major food wholesaler and a member of ITOCHU Group, ITOCHU has launched a commercial use of demand forecasting and order optimization solution using artificial intelligence (AI) for orders placed by Nippon Access to food manufacturers. Starting with this rollout, ITOCHU and Nippon Access will begin full-scale digital transformation of their wider food supply chain.

Amid the growing attention towards the fourth industrial revolution and SDGs society-wide, there is increasing demand in the food distribution industry for efficient operation, business development, and reduction of food waste losses using supply chain data. However, manufacturers, wholesalers, and retailers in the food supply chain possess data individually but not collectively. Thus it is necessary to link data across the industry in order to digitally transform the food supply chain and to meet the afore-said demand.

In 2018, ITOCHU started study on potential areas for digital transformation and data utilization within its Group, in parallel of setting up infrastructure and organizational systems that support future implementation. ITOCHU then positioned optimization of the food supply chain as the most important area, given its presence in consumer supply chain. Last year, through collaboration with BrainPad Inc. (headquartered in Minato-ku, Tokyo; Takafumi Kusano, CEO/Representative Director; hereinafter “BrainPad”), a leading company in providing data-leveraged digital services, and ITOCHU Techno-Solutions Corporation (headquartered in Chiyoda-ku, Tokyo; Ichiro Tsuge, President & CEO), a ITOCHU Group company specializing in IT system development and operation, ITOCHU conducted a proof of concept study with Nippon Access on demand forecasting and order automation for their limited distribution bases, using retail sales data gained from retail partners. The study subsequently showed effect on inventory reduction and efficiency improvement for their ordering operations, leading the parties to decide to expand the attempt nationwide.

ITOCHU and Nippon Access will start with approximately 1,000 non-refrigerated products such as beverages, alcohol, and confections for specific customers, and gradually expand the target customers. Going forward, ITOCHU will not only expand target customers and food categories, but also consider optimizing the entire food supply chain from the procurement of products and raw materials to distribution to retail stores. Further down the road, ITOCHU aims to provide services that help improve operational efficiency of factories and distribution warehouses owned by partnering food wholesalers and manufacturers as well as reduce food and opportunity losses in retail.

In December 2019, ITOCHU made a strategic business investment in WingArc1st Inc., which develops a data management business, and welcomed WingArc1st Inc. as our affiliate company. In March 2020, ITOCHU entered into business partnership with AKQA Inc., which has strengths in the digital consulting business. In November 2020, ITOCHU forged a capital and business alliance with BrainPad to strengthen its digital utilization capability. Overall, ITOCHU is committed to improving business efficiency and developing new businesses by utilizing data available in- and outside ITOCHU Group, and aims to provide clients with new experiences, products and services from a market-in perspective.

Automatic Ordering to Manufacturers Using Artificial Intelligence (AI)