Under our digital transformation (DX) initiative that started with the previous medium-term management plan, the Mitsui Group is effecting a transformation of its high-value-added business model by utilizing its on-site operational know-how and technologies, as well as digital technologies, backed by its broad base of business assets. Approximately 130 projects were examined during the previous medium-term management plan, and roughly 50 projects went on to the experimental stage, with 10 of these projects graduating to the operational stage.
The COVID-19 pandemic has underscored the importance of our digital transformation (DX) initiative. Under the new management plan, we are accelerating both offensive and defensive DX initiatives with the aim of creating businesses across the entire Company.
Business Transformation & Innovation with Digital
In Mitsui’s DX framework, the objective is to reduce costs through efficiency gains and optimization (Solution 1: S1) and expand sales (Solution 2: S2), improving the quality of existing businesses. Furthermore, we are creating new businesses and business models (Transformation: T) from a standpoint that differs from existing businesses. Mitsui is striving toward the realization of its “Transform and Grow” vision by overlaying this DX framework on its corporate strategies in Medium-term Management Plan 2023.
Mitsui engages in a broad range of businesses in many countries and regions. In other words, we have a diverse and varied perception of the real world (based on actual experiences). By using the data we gather to recreate a digital version of the world (a virtual space), we are able to conduct analyses and make predictions about the future, and feed this back to the real world. By repeating this process, we aim to increase the efficiency of our real-world operations.
Over the short to medium term, by thoroughly implementing S1/S2, we aim to amass Quick Wins while strengthening and advancing the profitability of existing businesses in the Mitsui Group, including trading operations. Using our accumulated know-how and knowledge, we are targeting Big Wins that create a future business foundation, including in new domains, by implementing T for next-generation businesses with a medium- to long-term view.
Structure for Advancing DX Strategy
The Information Strategy Committee has been established as an advisory body to the Corporate Management Committee and chaired by the Chief Digital Information Officer (CDIO).* Members include directors, executive officers, operating officers of relevant business units, and general managers of relevant corporate staff divisions. This committee formulates Companywide information and IT strategies, key policies related to building business foundations and advancing information strategies, and monitoring efforts. The Information Strategy Committee met a total of five times during the fiscal year ended March 31, 2020, confirming Digital Transformation initiatives, discussing changes to work styles related to the move to new offices in 2020, reviewing work processes, and deliberating upgrades to core systems. The minutes of the Information Strategy Committee meetings are periodically reported to the Corporate Management Committee and the Board of Directors, and referred to in decisions on management policy for Mitsui.
Mitsui created the Chief Digital Officer (CDO) position ahead of other general trading companies in 2017. In 2020, Mitsui started a new information strategy promotion structure under the CDIO, which combines the functions of the Chief Information Officer (CIO) and the CDO.
With the aim of accelerating DX initiatives, the Integrated Digital Strategy Division was newly created to integrate offensive and defensive DX promotion organizations in 2019. Additionally, a front-facing organization was established to respond to each business division and regional division, and the Center of Excellence (CoE) was established as a cross-functional organization to promote DX. These two organizations will also work to accelerate DX initiatives.
DX Case Study: Asset Foundation of Existing Businesses
Along with MODEC, Inc., Mitsui collects FPSO* operations data for analysis by AI to contribute to stable operations (improve operating rates), with the objective of improving the quality of the FPSO business and maximizing lifecycle value.
In January 2020, our FPSO operation in Brazil was designated by the World Economic Forum (WEF) as the most advanced plant in the world, leading the Fourth Industrial Revolution.
FPSO: Floating production, storage, and offloading system (caption) monitoring center for offshore plants (Brazil)
Monitoring center for offshore plants (Brazil)
DX Case Study: New Technology Deployment
In 2018, Mitsui participated in AI FUND, L.P., a fund created by Andrew Ng, a world-renown researcher in artificial intelligence, with a focus on the AI field. In 2019, AI FUND and Mitsui created BEARING.ai, an AI company in the field of streamlining shipping operations, the first major application of deep learning algorithms to analyze vessel fuel economy and offer services for optimizing shipping routes. Field experiments are currently being conducted with leading shipping companies.