BreakThrough Study Idea

Manufacturing industry in our country in transitionShinji Tokumasu<Series 2 / complete>

Study Idea


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Technology breakthrough that transforms the industrial structure

In the last article, I explained the contents of "Connected Industries." Again, "Connected Industries" is an industrial society in which new added value is created by connecting industries, companies, people, data, machinery, etc. It is an image of industries that Japan thinks it should aim for. Moreover, through this "Connected Industries" effort, in addition to adding value creation and productivity improvement, it is expected that we will also try to solve various social issues such as aging, workforce shortage, and energy constraints facing Japan.

I am in charge of the manufacturing industry, but the GDP of the manufacturing industry in Japan has decreased by about 20% in the past few years, which peaked at nearly 114 trillion yen recorded in 1997. Looking at the decrease in industry, the largest is "Electric machinery." Meanwhile, "Transportation machinery" and "General machinery" have been in substantially the same amount. In this background, I believe that "Electrical machinery" is the industry that was influenced by the wave of digitization the earliest. "Electric Machinery" was the first time the influence of digital was manifested in the product itself and even in its business model, and it seems that Japanese companies failed to respond well to this and reduced GDP, and we believe that the wave of such change is entering every industry today, and we need to take adequate measures as soon as possible.

I think that it can be said that the manufacturing industry, which is supposed to be the backbone of our economy, is entering a significant turning point, but as a background to this, what is happening right now? I think that the end is in "Technology breakthrough" and "Change in the value chain of manufacturing industry." "Breakthrough of technology" is brought mainly by the following three things.

1)Improvement of processing performance
    Hardware performance evolved exponentially.
2)Increase in the amount of data
    Due to the above, worldwide data volume doubles every two years.
3)Exponential Evolution of AI
    AI technology developed exponentially by deep learning etc.

With these, IoT, big data, AI, robots, etc. can be utilized in various situations. Along with that, the society which was thought impossible until now can be realized; there is a possibility that not only the industrial structure but also the employment structure can change drastically.

"Solutions" through data utilization are key to future value creation

The figure below is a categorization of the "Manufacturing value chain" into three layers: "Manufacturing site / Hardware," "Solution," "IT infrastructure/software." We recognize that it is the "Solution" layer that is the main battlefield of future competition, including European and US companies, and that will be the source of profit. It is difficult to gain added value with products alone, and it is the key to acquiring value, how we can provide "Solutions" that will solve customer problems. At that time, we think that the "Manufacturing site / Hardware" layer will lead the way and combine it with the "IT foundation/software" layer, and vice versa. In any case, it is the key to quickly create "Solutions" such as "Predictive maintenance," "Remote maintenance," "Diversified product miniaturization" and securing positioning in the "Solution" layer. "

Also, one of the foundations that creates a new" solution " is data such as production process. According to a survey conducted by the Ministry of Economy, Trade, and Industry (Ministry of Economy, Trade, and Industry) in December 2016, the ratio of collecting some data at the manufacturing site has dramatically increased from 40.6% in the previous year to 66.6% It became clear. On the other hand, there has been little increase in utilization to "visualization" and "traceability management" etc. utilizing the collected data, and people who wish to do "if possible," have increased significantly. I came up to the point of taking the data, but I found that there are entirely a few small and medium enterprises, etc. who are suffering from the specific method of utilizing the subsequent data. From now on, I think that hands-on support for sharing excellent examples and how to use it is essential for promoting the utilization of specific data.

There is also a challenge for departments that lead the use of data. Currently, the manufacturing department is 45%, while the manager and management strategy department is 30%. When data utilization is on-site driven bottom-up, it is sufficient for rationalizing production sites, but it is hard to connect new value added by business model transformation, etc. Again, to promote the creation of added value through the utilization of data, we think that it is necessary to increase the proportion of data utilization led by the management and management strategy division.

Also, shortage of human resources has become a significant problem. According to the survey by the Ministry, about 80% of personnel securing is recognized as an issue, and about 20% are affecting business as well. Also, as a measure to ensure human resources, we are mainly using a veteran, talented personnel due to retirement age, etc., but in the future, we will mostly respond that we would like to take advantage of robot introduction and IT · IoT, etc. Today, in the manufacturing industry in Japan, in the significant environmental changes such as the fourth industrial revolution featuring digital innovation and human severe resources shortage, we are faced with two demanding tasks such as "Creation and maximization of added value" and "Maintain and strengthen the workplace capability while manpower shortage progresses" but it can be said that the utilization of advanced tools such as IT, IoT, AI, and robots are the key to these two issues.

Next time we will explain concrete examples of "Connected industries" in SMEs.


< series 2 / complete >


Shinji Tokumasu
Counselor of the Industry Bureau of the Ministry of Economy, Trade and Industry (in charge of digitization and industrial systems) Manufacturing Policy Deliberation Division Director

After entering the Ministry of Economy, Trade and Industry in 1994 and studied in the United States, he experienced a lot of industrial technology related departments, mainly including university cooperation promotion section, such as University Collaboration Promotion Division, Research and Development Division, NEDO Division, International Managing Director of Industrial Technology, Director of AIST. In July 2016, he joined the Manufacturing Industry Bureau Counselor (in charge of digitization and industrial systems) and appointed Manufacturing Policy Deliberation Division Director
Waseda University graduate school and master's degree, Harvard University Kennedy School administrative master, MIT Sloan School management master, Tokyo Institute of Technology Graduate School of Social Science and Engineering, Doctor (academic)

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