Excellent Case of Structural Innovation Support by Small and Medium Business Corporation
Entry into New Business Fields through Proactive Structural Innovation
Logistics is counted among the six major industries that frequently face labor shortages, alongside manufacturing, healthcare and welfare, food, agriculture, and overseas construction. Recently, the government announced plans to address the issue of vacant jobs. Aging employees and labor shortages are common problems faced by the logistics industry. Since COVID-19, the market has expanded due to increased online sales, but it remains difficult to find workers.
Rubentis is a company that has seized the opportunity for business transformation amid this reality in the logistics industry. With a desperate need for automation solutions due to labor shortages but lacking sufficient IT capabilities, Rubentis entered the logistics robot automation business to resolve the difficulties faced by small and medium-sized logistics companies. There were many challenges before the new business could take root. We spoke with CEO Oh Sang-gyu about the journey so far.
Oh Sang-gyu, CEO of Rubentis, said, "Based on optimal smart logistics solutions specialized by industry, we have entered new businesses and expect sales to increase by about 35% compared to last year." Rubentis is a logistics solution company established in 2015. Its main products included warehouse management systems (WMS). These programs digitalize logistics center systems where countless products come in and out daily, allowing management at a glance. Rubentis’ solutions enable integrated management of multiple logistics centers within a single system. They can flexibly respond even when expanding or adding logistics centers.
However, Rubentis judged that relying solely on its existing business would not be sufficient to respond to the recent growth trend in the logistics market. On the contrary, as the market grew, the difficulties faced by small and medium-sized logistics companies struggling with recruitment intensified. This is the background for Rubentis expanding its business into logistics robot automation and software-as-a-service (SaaS) type WMS (Warehouse Management System).
There were also difficulties during the business transformation process. They faced challenges such as lack of information about the new field. At this time, Rubentis received support from the Small and Medium Business Corporation’s ‘Structural Innovation Support Project.’ Through consulting, they were able to establish a commercialization direction that organically connects the systems needed for automated warehouse logistics with logistics transfer robots. Kim Moon-hwan, head of the Innovation Growth Division at the Small and Medium Business Corporation, explained, "The Structural Innovation Support Project supports resolving difficulties in business transformation, job transition, and digital transformation arising from proactive structural innovation in response to industrial structure changes."
The business transformation was successful. Rubentis utilized cloud technology and open source to reduce the cost burden on small and medium-sized enterprises. Logistics robot automation also has a mid- to long-term effect of reducing labor costs. After changing the business structure, the number of small and medium-sized enterprise clients increased. The effect was immediately reflected in performance. Sales, which were 367 million KRW in 2020, increased more than fivefold to 1.894 billion KRW the following year. Last year, sales jumped again to 3.341 billion KRW. Growth is also expected this year.
Above all, CEO Oh explained that while strengthening corporate competitiveness, they have also been able to help alleviate difficulties faced by small and medium-sized logistics companies that lack financial capacity and find it difficult to secure IT personnel. He said, "We were able to proactively achieve a transition to a new business model. We hope that the logistics warehouse control system linked with robots that Rubentis is promoting will help many companies manage logistics efficiently in the market and that the company will use this as a stepping stone to expand overseas."
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