There is growing hope that the promotion of DX will solve the problems facing the manufacturing industry. However, some people may feel that they don't know what specific changes will come from DX, or that they are working on DX but are not making much progress. What is needed to advance DX?
In this article, we will explain DX in the manufacturing industry, the changes it will bring to business, and key points to consider when working on DX. If you are thinking about promoting DX in your manufacturing workplace, please use this article as a reference.
What is DX that will change the way manufacturing works?
DX (Digital Transformation) means using data and digital technology to change people's lives for the better.
DX, which is expected in the manufacturing industry, refers to business transformation realized by utilizing digital technologies such as IoT (Internet of Things) and AI (Artificial Intelligence).
In fact, there is a case where a company that manufactures and sells construction machinery provides a system that remotely monitors data from sensors attached to the machinery and predicts failures using AI prediction technology. By predicting failures, it is possible to prevent unexpected stoppages at the site and reduce downtime. There is no longer any need to worry about construction delays due to construction machinery failures, and customer trust has increased.
In this way, companies that are actively promoting DX in the manufacturing industry are changing their business models from selling goods to providing services that increase customer satisfaction.
Four reasons why DX in the manufacturing industry is attracting attention
Why is DX attracting attention? We will explain the background to the promotion of DX in the manufacturing industry from four perspectives.
- Expectations for achieving the SDGs
DX is an initiative that mainly focuses on business transformation, but it has something in common with the SDGs (Sustainable Development Goals). That is, both aim to realize a better society.
Here is an example of how DX promotion efforts are contributing to the realization of the SDGs. A food manufacturing company that introduced an integrated planning management system developed for the manufacturing industry has become able to use AI to forecast demand and control demand and supply across departments. This not only improves the efficiency of production planning operations and eliminates dependency on individuals, but also reduces food waste, contributing to the achievement of the SDGs.
In this way, it is expected that efforts to transform operations using digital technology will also lead to the achievement of the SDGs. - A means of achieving carbon neutrality
Promoting digital transformation is also attracting attention as a means of achieving carbon neutrality.
Carbon neutrality is the balancing of greenhouse gas emissions and absorption. Japan has set a goal of achieving carbon neutrality by 2050.
Reference: Ministry of the Environment " What is carbon neutral ?"
One of the initiatives being actively promoted in the manufacturing industry to achieve carbon neutrality is carbon footprinting (CFP), which visualizes carbon dioxide emissions throughout the supply chain. The Agency for Natural Resources and Energy, an external bureau of the Ministry of Economy, Trade and Industry, is also discussing the development of a foundation for calculating CFP, and has pointed out that delays in promoting digital transformation are one of the challenges to achieving CFP. In other words, promoting digital transformation is recognized as an essential initiative for achieving carbon neutrality. - Breaking away from a business structure dependent on the skills of expertsOne
of the factors that has allowed Japanese manufacturing to maintain its global competitiveness is the presence of skilled personnel. However, in recent years, the inability to pass on these skilled techniques has become a major issue, especially against the backdrop of a declining labor force. For Japanese companies to remain competitive, they need to break away from a production system that relies on human skills. For this reason, there is growing interest in using digital technology to make their tacit knowledge explicit.
If the skills of experts can be visualized using data, it will be possible to automate the process with machines and stabilize quality variations. Automation will also help to alleviate labor shortages and prevent a decline in the competitiveness of the manufacturing industry. - Responding to an environment of increasing uncertainty
The business environment is changing rapidly due to rising international geopolitical risks and the COVID-19 pandemic. In addition, the speed at which product needs are changing is accelerating, requiring shorter lead times for product development and more advanced production processes.
To survive in such a harsh environment, companies need organizations that can respond flexibly. DX is an effort to pursue better answers in a world where there are no correct answers, so it is suitable for creating organizations that can respond to an environment of increasing uncertainty. In this way
, DX is beginning to be recognized as an effort that concerns all companies.
Changes brought about by manufacturing digital transformation
What specific changes can we expect from promoting DX in the manufacturing industry? Let's take a closer look.
- Strengthening the Engineering Chain
The engineering chain is a name given to the series of steps from research and development to design and production in the design department. It is expected that the promotion of DX in the manufacturing industry will strengthen the engineering chain and improve product competitiveness. As indicated in the "2020 Edition Manufacturing White Paper" published by the Ministry of Economy, Trade and Industry, it is said that 80% of a product's quality and cost are determined at the design stage. Therefore, it is important to concentrate resources in the early stages of development to create the product.
By promoting DX in the design department, not only can we detect problems early, improve quality, and reduce waste due to rework in later processes, but we can also introduce a system that can share the quality and knowledge of design work and strengthen the engineering chain.
Reference: Manufacturing Infrastructure White Paper (Manufacturing White Paper) " Promoting Digital Transformation (DX) to Strengthen the Corporate Transformation Power of the Manufacturing Industry " - Improving supply chain flexibility
DX is expected to increase the flexibility of the supply chain. The supply chain refers to the flow of processes from procurement to manufacturing, sales and maintenance. Digitalization of the supply chain enables collaboration between systems in each process and centralized management of data. By combining accumulated data with AI, the following operations can be quickly changed to meet customer needs.
・Procurement of raw materials
・Building production plans
・Formulating sales plans
・Formulating inventory plans
This will enable the realization of a supply chain that can respond to sudden order changes and frequent specification changes from customers caused by market changes.
Four points necessary for promoting digital transformation in the manufacturing industry
Let's take a look at each of the four points necessary for promoting DX in order.
- The purpose of promoting DX
is to realize a better society and organization, and the use of digital technology is a means to that end. Therefore, it is necessary to clarify what kind of society will be realized through DX efforts and what kind of organization will be aimed for. It is important for management to redefine their company's strengths and clearly show their DX vision and efforts. In particular, when introducing new technology, it is easy to mistake the act of introduction itself for the purpose, so care must be taken. - According to the 2022 Manufacturing White Paper, which aims to develop the human resources necessary for DX
, approximately 88% of companies are finding it difficult to secure IT human resources to promote DX. There is a shortage of IT human resources throughout Japan, and it will be difficult for all companies to secure highly skilled IT human resources. As a result, there is growing interest in employee reskilling. In recent years, software has been developed that allows people to develop applications without specialized knowledge. If people can acquire the mindset of applying digital technology to the workplace through reskilling, rather than advanced technology, it will be possible for non-IT personnel to promote DX. - In the manufacturing industry, where the entire process is optimized
, there are many cases where the design function and the production function work on optimization independently. If DX is promoted in a similar way, data from the manufacturing site will not be able to be used in product design. The goal of DX in the manufacturing industry is to seamlessly connect all processes and enable highly accurate simulations at the design stage. Therefore, it is necessary to consider measures to solve problems throughout the entire process, rather than partial optimization that solves issues for each department. - According to the " Research Report on the Current State of ICT in Japan
" published on the website of the Ministry of Internal Affairs and Communications , which promotes digitalization , Japanese companies are lagging behind other countries in adopting digital technology. The foundation of promoting DX is the collection and analysis of digital data. In the manufacturing industry, it is believed that the realization of digital twins, which collect all data from real-world factories and reproduce the same thing in a virtual space, will bring about a major revolution in business models. To achieve this, it is necessary to accumulate small efforts, such as digitizing paper documents and acquiring equipment operation data. In addition, the importance of IoT platforms for collecting and analyzing all data within factories is increasing.
Manufacturing DX will change business! Let's take a step towards making it a reality
Due to changes in the manufacturing environment and the growing attention being paid to SDGs and carbon neutrality, the importance of transformation through DX is increasing.
In order to proceed with DX efficiently in the right direction, it is necessary to promote DX by focusing on the points introduced above and steadily achieving the goal.
As mentioned above, the key to promoting DX is the collection and analysis of digital data. The amount of data collected in the factory is huge, and sending all of it to a cloud server for analysis places a heavy load on the network. Edge computing is attracting attention as a way to distribute this load.
For information on edge computing, which is essential for promoting DX in the manufacturing industry, and the conditions for it, please refer to the Edge Computing Study Group blog " Edge Computing and Cloud Computing: The Differences Between Them and How to Use Them ."
