Linking project processes

Komatsu’s SMARTCONSTRUCTION service is aimed at realizing “construction workplaces of the future,” which are safe, offer high productivity and are smart and clean, by gathering and managing information on construction workplaces and construction work and turning it into 3D data. The data is then used to simulate processes and automate construction machinery control. The service, which has been introduced at over 10,000 construction job sites in Japan since its debut in 2015, entered a new phase in April 2020. At the time, a new version of the construction-support service, which uses four Internet of Things devices and eight software programs to achieve a wider scope of application, was launched.

At the same time, Komatsu introduced SMARTCONSTRUCTION Retrofit kit, that provides information and communication technology (ICT) functions to conventional construction equipment that does not have network capability into ICT-ready models. In Japan, 98% of all construction equipment working on construction sites in use still does not have ICT functionality, which has inhibited digitalization in the construction industry. Komatsu aims to keep the kit’s pricing low so that it can be introduced by small and medium companies that have limited resources. By allowing it to be installed in models by rival manufacturers, the company also aims to help promote digitalization across the industry.

Explaining the aim of these initiatives, Hiroyuki Ogawa, representative director, president and CEO of Komatsu, said: “You can optimize construction work by syncing the actual workplace and the workplace of digitalization by linking all processes of a construction project through digitalization, rather than digitalizing just parts of construction and production processes. At the same time, it helps speed up digitalization of existing construction work by making construction equipment ICT ready. It also helps solve the construction industry labor shortage issue.”Komatsu has attracted attention for its business model that aggressively introduces digital technology. In selecting the company as a DX Grand Prix 2020 winner, the assessment committee highly regarded its efforts in “enhancing digital transformation not just for resolving issues for their customers, but also for solving issues faced by the industry and broader society.” Komatsu’s business strategy also has a very clear, two-pronged approach in which, on one hand, it aims to optimize operation of construction work and, on the other, automate construction work and make it autonomous.

This fall, the Japanese government introduced measures to promote digital transformation. One such measure is the introduction of the digital governance code, which serves as a guideline for management teams to follow as they seek to strategically take advantage of IT systems. Another is a system in which the government formally recognizes businesses deemed ready to undergo digital transformation in accordance with these guidelines. The digital transformation stocks, which the Ministry of Economy, Trade and Industry (METI) and Tokyo Stock Exchange (TSE) jointly select, are now linked to these measures. Why is the Japanese government promoting digital transformation? The METI Journal posed this question to Takefumi Tanabe, who heads METI’s IT Innovation Division and Digital Transformation Promotion Office. The following is an edited excerpt of Tanabe’s comments.

Adding new value

The importance of digital transformation is increasingly becoming understood and more and more people are undoubtedly feeling the need to promote it. On the other hand, there aren’t many companies that can paint a clear picture of how they can link it to their business models or growth strategies, in my view. Management may push for digital transformation, but staff on the ground may be left confused about what to do. I think this is more or less a typical situation for Japanese businesses.

In the past, it was possible to gauge the impact of efforts to enhance operational efficiency and save labor by using IT, at least to a degree. However, when it comes to digital transformation, we’re in uncharted territory. Suppose you have successfully strengthened relationships with customers or stimulated communication across division borders in your company using Internet of Things technology. It could lead to winning new business, but it’s difficult to measure the immediate impact of these measures on revenues. You cannot channel management resources on something that’s uncertain. That’s a natural judgment, in a sense. But once people start to actually see digital technology add new value to businesses in various ways, I think digital transformation will accelerate in Japanese businesses.

That’s why we think we need to bet on the potential of digital transformation, highlight businesses that are actually promoting it so that everybody can learn from examples of specific efforts and introduce measures to support it.