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The Industry & Distribution Business Unit offers a variety of digital solutions for the industrial and distribution sectors by leveraging Hitachi's strengths in operational technology (OT), IT, and products. In particular, we regard Smart Manufacturing, logistics solutions, maintenance and repair, and other high value-added services as major growth areas.
One social issue with big repercussions for the industrial and distribution sector is the decline in the working-age population. This is not a problem for Japan alone; China and many countries of Europe, too, are confronting labor shortages due to falling birthrates and graying populations. Employers are turning to streamlining and automation and will need to increasingly diversify their workforce, hiring more women, older workers, and foreigners.
In the past, manufacturers, including Hitachi, could expect their products to sell if they were of high quality, and value was created by skillfully enhancing the operating ratio of existing facilities. There are times, though, when manufacturing requires the skills and knowledge of expert workers—even when production is automated with new facilities and systems—and their experience and knowledge are coming to be seen as a source of strength for Japanese manufacturers. Many such workers are approaching retirement today, so it is important that their skills are transferred to new generations of workers.
Developing solutions to these issues not only enables our business unit to meet the needs of society and our customers but represents new business opportunities for us.
In the field of maintenance and repair, for example, keeping factory equipment in good running order is crucial to raising the operating ratio, but this is a task whose effectiveness hinges greatly on the skills of the worker performing it. Entrusting this to an inexperienced worker could result in problems—needed parts may be lacking, or repairs may be required again after a short interval. The accumulated data on the repairs undertaken in the past by expert workers are being analyzed using artificial intelligence (AI) to quickly ascertain the causes of a malfunction and to enable repairs in an efficient manner. To ensure continuity, the skills of expert workers are being collected and digitized utilizing IoT; this can help customers efficiently develop the skills of their own workers and contributes to the development of global human resources and improvements in quality.
The Industry & Distribution Business Unit is able to achieve total optimization by connecting the entire value chain, from manufacturing and logistics to maintenance and repair. Many companies strive for efficiencies in individual workplaces, but such efforts often have limited impact on the value chain as a whole. We believe that the AI- and analytics-backed solutions offered by Hitachi can contribute to the resolution of issues like these. An advantage we enjoy is that we can first apply them within the Group and confirm their effectiveness before offering proven solutions to our customers.
Expanding our business and boosting production carry the risk of increasing emissions of greenhouse gases and the generation of industrial waste. We will counter such risks by laying the foundations to optimize production plans, improve quality, and reduce our environmental burden. We have already achieved positive results with the high-efficiency production model installed at Omika Works and through the practical application of Smart Manufacturing—collaboratively created with Okuma Corporation and Daikin Industries, Ltd.
Among the broad range of businesses in which the Hitachi Group is engaged, the realm of digital solutions that our business unit offers is marked by rapid changes in the business environment and advances in technological innovation. I therefore believe that we should take the lead in moving into new business domains and developing new technologies so that we can share what we have learned with other business units within the Group.
I strongly feel that there is growing interest in the SDGs among our customers, and I believe it is my duty to develop our human capital so that this awareness is shared throughout our business unit.
Our business unit is primarily engaged in helping achieve Goal 9. By offering solutions to the issues faced by our customers not only in the realm of production but also logistics and maintenance and repairs, we hope to enhance our social and environmental value, thereby contributing to the attainment of Goals 7, 8, 12, and 13.