The automation direction of Coupang logistics center is the integration of humans and technology. In other words, I think Daegu FC presents a blueprint for the logistics industry to move from a labor-intensive base to a high value-added technology-intensive industry where technology and people coexist.
Coupang unveiled artificial intelligence (AI) and big data-driven automated logistics sites at the Daegu Fulfillment Center (hereafter referred to as Daegu FC), which opened in March last year.
Daegu FC has a total floor area of 330,000㎡ (about 100,000 pyeong) with two floors underground and 10 floors above ground. It is a very large mega fulfillment center the size of 46 football fields and has the largest scale in Asia as well as in Korea.
Daegu FC is a collection of logistics knowledge accumulated by Coupang automation innovation technology and AI, and invested 320 billion won. It is intended to be operated as a key base for the nationwide launch of rockets, connecting Yeongnam, Chungcheong, and Honam districts, and is currently operating as a pilot and is used as a core test bed for Coupang’s automated logistics.
An official from Coupang explained, “Daegu FC is a ‘first-class logistics center of the future’ that significantly reduces the work intensity of workers, provides a safe work environment, and improves the quality of rocket delivery service for customers.”
Meanwhile, since 2014, Coupang has continued to invest in logistics infrastructure and technological innovation, such as logistics automation and AI robots, with the aim of reaching the ‘Kuse area (Coupang + station area)’ where rocket is delivered (next day delivery) possible. Since its establishment, about 6.2 trillion won has been invested in building a rocket distribution logistics network, and about 70% of the Korean population lives within a 10-minute radius of the Coupang logistics center.
1,000 AGV robots in constant motion, reducing overall work by 65%
In the case of existing distribution centers, a PTG (Person to Goods) method is used where employees look for goods ordered by customers. In the case of Coupang Daegu FC, the GTP (Goods to Person) approach where automation systems such as robots deliver goods to where workers are located broke the existing ‘frame’.
To this end, Daegu FC has driverless forklift trucks as well as AGVs. It applies the most advanced logistics technology in Korea, such as a sorting bot, based on a single logistics center.
A total of 1,000 AGV robots are in operation on the 7th and 9th floors of Daegu FC. AGV robots are responsible for displaying and picking goods, and deliver goods to workers on shelves weighing up to 1,000 kg with hundreds of products on display.
The AGV robot operates 24 hours a day, 365 days a year, and automatically recharges when the battery needs to be recharged. This reduced the total number of work steps by 65%. The AGV robot operates through QR code recognition attached to the floor, and the racks containing the items ordered by customers reach the worker within two minutes on average. The monitor placed in front of the worker shows images and locations of the products to be selected. The worker picks up the product, scans the barcode, and moves it to the dot.
Park Joo-ho, head of Daegu Fulfillment Center, explained, “In the case of existing logistics centers, products are stored in zones for each product, but in the case of Daegu FC, products are stored randomly by applying Coupang’s intelligence technology artificial intelligence (AI) to increase space efficiency.” .
Unmanned forklift protects workers from serious disasters and moves large capacity pallets ‘fast’
The logistics center is one of the ‘powder kegs for major disasters’. Even within the distribution center, forklifts have a high risk of accidents, and if an accident occurs, it is very likely to lead to a major disaster. Workers as well as security personnel of the logistics center always do various forklift control and accident response efforts.
Coupang Daegu FC operates an unmanned forklift on the 3rd and 5th floor to improve work efficiency and prevent safety accidents. On the 3rd and 5th floors, known as replenishment centers, each floor has a dock that can accommodate trucks, so goods in short supply can be sent to other distribution centers on pallets.
On the 3rd and 5th floors, the workspace for humans and the workspace for unmanned forklifts are separated, so if a worker invades the safety area within the workstation or Smilegate, the operation of the unmanned forklift stops immediately to prevent safety accidents.
Operation of unmanned forklift is also done through QR codes. Large-sized QR codes are attached to pillars in the distribution center, so an unmanned forklift scans the QR codes and moves according to work instructions. The unmanned forklift carries out inventory checks as well as product storage and warehousing. According to the unmanned forklift manufacturing specification, it is known to move up to 1.5 tonnes at a time and work up to 1,600 pallets per day. In addition, like the AGV operating floor, Coupang’s artificial intelligence (AI) stores a random inventory and automatically recharges when the unmanned forklift’s battery drops below a certain level.
Park Joo-ho, head of Daegu Fulfillment Center explained, “Daegu FC forklift is one of the key technologies to increase worker safety, and human movement is completely blocked in the zone where unmanned forklift is implemented, preventing accidents from occurring at source.”
‘Sorting Bot’ performed the demanding sorting task without error in a few seconds
For Coupang rocket distribution, it is important to distribute products by destination. Sort bots are logistics robots responsible for all types of goods that people move or pick up, and are optimized for ‘rocket delivery’ by sorting and moving goods in just a few seconds.
Coupang Daegu FC operates hundreds of sorting bots on the first floor. The sorting bot also moves according to the QR code placed on the floor and can move items within 8kg. When the products that have been packed by the automatic packaging machine come to the worker along the conveyor belt, the worker moves the product to the sorting bot that stays where the code scanner is bar set. Items loaded onto the sorting bot are automatically scanned and moved immediately to the sorting area and then moved on their own. The staff responsible for the boxes in the sorting area can change the boxes when an alarm comes in that the boxes are full. However, heavy items, liquids and breakable products are sorted by humans, not by sorting bots.
Park Joo-ho, director of the Daegu Fulfillment Center, explained, “The introduction of the sorting bot reduced employee workload by 65%, resulting in greater satisfaction and better customer service.”
On the other hand, on the first floor of Daegu FC, there is a separate health center as well as lockers and a restroom. Medical staff are always on hand for consultation when something goes wrong at work, and as well as blood pressure checking equipment, there is InBody equipment and a treatment room so workers can always visit and check their health if they have any problems with their body.
A Coupang official said, “Coupang has invested about 7.1 billion won in Coupang Care since 2021. About 2,550 people participated in the program, and 60% of the participants experienced an improvement in health indicators.”
“Coupang Daegu FC will contribute to the coexistence of people and the automation and revitalization of the local economy”
Coupang plans to use Daegu FC, which is currently operating as a pilot, as a test bed and forward base to spread Coupang’s ‘innovative DNA technology’ as well as a general logistics center. Accordingly, Daegu FC is actively introducing and upgrading various automation systems.
An official from Coupang said, “We have established the largest end-to-end logistics network in Korea, operating more than 100 logistics infrastructures in 30 regions across the country. From the moment a customer orders a product to delivery to the door, we have provided a differentiated experience through an innovative AI-based operating system.” he said.
On the other hand, regarding concerns about job losses due to logistics center automation, Coupang’s direction for automation was once again emphasized as the integration of humans and technology. He explained that he intends to introduce an automation system that reduces the work intensity of employees and increases satisfaction.
An official from Daegu FC said, “The participation rate of local Daegu companies involved in the construction at the time of completion of Daegu FC reached about 76%, and Coupang has hired about 1,600 new workers in Daegu over the past three years. We plan to hire up to 2,500 people in the future, and we expect the indirect employment impact to be around 10,000 people.”
It is also expected that a new market will be opened for small businesses in the Daegu area. As of 2022, approximately 7,000 companies trading or entering Coupang generate hundreds of billions of earnings in annual sales.
Jeong Jong-cheol, CEO of Coupang Fulfillment Service, said, “Daegu FC is a symbol of Coupang’s innovative logistics investment, and by digitally transforming logistics, we have created a more comfortable and easier work environment for employees.” “Product management using AI, automated robot technology Based on this innovative logistics infrastructure that has been grafted, we will do our best to develop local small businesses and local communities, including the creation of permanent jobs.”