Special | Report
Manufacturing Use Cases in IoT Era heading
Japan’s Manufacturing Industry Maximize Benefits of AI, IoT
IoT and AI are expected to play crucial roles in shaping the future landscape of manufacturing. this early, several companies have started implementing AI and IoT in various manufacturing sites to meet the changing needs and requirements of production.
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espite Japan’s slow recovery trend in recent years, it has started to show signs of upward shift in its economic cycle, as expansion of consumption and increased investments have resulted to higher corporate earnings. On the other hand, as Japan’s population continues to decrease, labor shortages have become a serious problem. This has been a major issue in the manufacturing industry, particularly among small- and medium-sized companies.

In view of this, the advancement of digitization, including internet of things (IoT), big data, and artificial intelligence (AI), has started to change the landscape of manufacturing industry in various countries. In Japan, efforts toward the use of AI, IoT, and other digital technologies, begun to take off in 2017.

Figs. 1 and 2 show the growth of the AI and IoT markets in recent years.

The introduction and implementation of AI and IoT are set to advance further as a means to improve productivity and create added values, such as new products and services.

However, challenges in advancing the use of AI and IoT have also come to fore. Fig. 3 shows the results of a survey on the challenges recognized by companies in advancing AI and IoT. Japanese companies pointed out three major issues, namely solutions, products, and services that meet own company’s needs; creation of business model; and realizing vision and strategy planning as an organization.

Fig. 1: Expenditure forecasts of the cognitive/AI market in Japan bar graph
Fig. 1: Expenditure forecasts of the cognitive/AI market in Japan by segment as of May 2018 (Source: IDC Japan)
Fig. 1: Expenditure forecasts of the IoT market in Japan
Fig. 2: Expenditure forecasts of the IoT market in Japan as of Mar. 2018 (Source: IDC Japan)
Fig. 3: Challenges for companies to advance the use of AI and IoT

Fig. 3: Challenges for companies to advance the use of AI and IoT (Source: “Investigative research on innovations and the creation of new economy through ICT by the Ministry of Internal Affairs and Communications (2018))

Companies that can overcome these challenges through meticulous planning befitting the required strategies and needs, are expected to promote the use of AI and IoT, and grow in the future. This report highlights successful use cases of solutions, products, and services that meet a company’s specific needs, many of which are considered as key challenges by some Japanese companies. These use cases serve as good reference points by foreign players, particularly in the Asian region, who plan to do business in Japan.

Lead Needs for IoT Solutions
i Smart Technologies Corporation started its IoT business from scratch, creating a system that monitors the operational conditions of the manufacturing line. The system has been adopted by ASAHI TEKKO Co., Ltd., an automotive components manufacturer, contributing to improved production capacity.

The success of their IoT system prompted i Smart to continue to market their system to other companies and at the same time to provide consulting services as well. The company’s know-how in setting up the inexpensive and easy-to-use system has encouraged small- and medium-sized companies, which are initially hesitant to install an IoT system, to join the bandwagon.

This is an interesting strategy to complement efforts by businesses to improve and quickly meet the needs of installing digital solutions.

Fig. 4: IoT device made by i Smart Technologies
Fig. 4: IoT device made by i Smart Technologies
Fig. 5: IoT 1 Click×CT monitor
Fig. 5: IoT 1 Click×CT monitor

Supply Chain Platform with Advanced Technologies
sitateru Inc. was founded in 2014 as an online service provider for clothing production that can respond to requests from both professionals and amateurs. They offer help with all the necessary processes involved in clothing production such as brands who are seeking for new production lines.

The company not only provides the service to apparel companies but also handles clothes as a whole, encompassing uniforms of hotels and various manufacturers, as well as original items. To date, 13,000 companies have used sitateru’s service. The company has established a network with about 700 bases of sewing factories.

In July 2019, Cool Japan Fund Inc. decided to invest ¥1 billion (US$9.13 million) to sitateru and has been advancing the establishment of the foundation to support Japanese apparel companies to make inroads into overseas markets.

This use case is a good example of finding needs for using factories with advanced skills and innovating the supply chain of manufacturing.

Supply Chain to Implement Industry 4.0 Across Fields
NTT DATA Corporation’s iQuattro is a cloud-native platform for Smart Supply Chain and Smart Factory, which is aimed at using new information and the creation of new values by combining sporadic data that exist between departments, bases, and companies with advanced digital technologies.

It connects existing resources inside and outside of companies and services of startups with excellent technological expertise in Japan and aboard using Web API, to make the best use of existing systems and external services, thereby significantly reducing lead time required for system installation and supporting speedy application of those systems and services to businesses.

iQuattro has been used mainly by large manufacturers as an inter-enterprise supply chain platform, which connects manufacturers of finished products, factories, and suppliers in real time, as well as an IoT platform, which unitary collects, analyzes and links information on production results of factories that sporadically exist globally.

Fig. 6: The platform sitateru envisions (Source: sitateru website)
Fig. 6: The platform sitateru envisions (Source: sitateru website)
Fig. 7: Linkage of multiple companies and other companies’ services by iQuattro
Fig. 7: Linkage of multiple companies and other companies’ services by iQuattro

As can be seen in the use cases of companies mentioned in the report, productivity improvement and the creation of added values, such as new products and services, ranging from the collection, visualization, and use of data using IoT, have already been achieved in manufacturing sites. Considering the present trend, where data gathering through IoT has been advancing further, the use of AI is also expected to expand in the future. Regardless which products and services will be the prevailing trend in the coming years be it in Japan or overseas, new services and solutions are expected to emerge to meet the changing needs of manufacturing sites.

iQuattro® is a registered trademark of NTT DATA Corporation in Japan.

About This Article:

The authors, Harushige Funaki and Kazuhira Yoshida, are Senior Manager and Manager, respectively, of the IT Strategy Consulting Group of the Digital Innovation Consulting Unit, Digital Strategy Business Division of NTT Data Institute of Management Consulting, Inc.