Our Approach to Digital Transformation (DX)

We hereby publish our approach to digital transformation (DX), as set out below.

The impact of digital technology on society and on our competitive environment

In the design and production-preparation processes of the manufacturing industry we serve, the ageing of skilled engineers and a shortage of talent are advancing rapidly, while core tasks such as drafting, design verification and design judgement remain dependent on the experience of individual engineers. Against the backdrop of rapid progress in generative AI and 3D measurement technology, major CAD vendors and overseas players are entering the design automation field one after another. As general-purpose AI tools spread at low cost, we recognise the risk that businesses whose only value is the provision of functionality will be drawn into price competition at an early stage. Our own development and deployment work is likewise structured so that advanced technical knowledge is held by individual engineers, and unless we resolve this dependence on individuals, the speed of our business growth will remain tied to headcount.

At the same time, manufacturers have accumulated vast quantities of 2D drawings, 3D models and machining know-how over many years, much of which lies buried in a state where it can be neither searched nor analysed. Turning these into data that can be structured and analysed through 3D geometry analysis and AI is both a significant business opportunity for us and the driving force for freeing our own development process from its dependence on experience. By using data and digital technology to seize this opportunity, we will transform ourselves into a company that delivers distinctive value on ground different from simple competition over features.

Management vision

Guided by our philosophy, “Bringing vitality to Japan through passion and ideas for manufacturing”, and by our principle, “3D & AI Technology to Enhance the Creativity”, we aim to build an environment in which people involved in manufacturing can concentrate on creative work. Our role in this is to convert the criteria for design, drafting and design verification — which until now have existed only in people’s heads — into analysable data, starting from 3D geometry data and drawing data, and to return them to society as reproducible technology.

In terms of business model, we will shift our centre of gravity from contract work that accumulates individual responses case by case, towards an AI platform business that can be delivered and improved repeatedly, built around accumulated drawing and geometry data and the results of analysing design knowledge. At the same time, we will build data analysis into the development process of our own design automation technology, establishing as our management foundation a cycle in which the more data grows, the more both delivered value and development productivity increase.

Specific measures for management and the use of digital technology (strategy)

Our DX strategy is not limited to sharing or centralising data. It lies in using the accumulated data itself for analysis and prediction, and in transforming business operations that rely on experience and individual judgement into operations based on data.

First, we structure and accumulate the 2D drawings, 3D model geometry data, and the history of judgements on manufacturability and defect findings obtained through our customers’ design sites and our own technical verification, and we analyse these with AI. By analysing the correlation between shape characteristics and past defect and rework records, we aim to predict design patterns where problems such as exceeding machining limits or interference between parts are likely to occur, and to present the relevant locations and correction policies to the designer before the drawing is released. This transforms the way the target process is carried out — from design verification that depends on visual checking at the final stage, to a state where risks are made visible during design and rework is less likely to occur in the first place.

Second, we apply the same data to transforming our own development and deployment work. The design verification rules and design know-how that individual engineers have until now determined case by case in discussion with customers will be accumulated centrally as data on judgement conditions and applied results, and we will analyse what is common across industries and machining methods. We will organise the results into a set of reusable standard rules, and by analysing the relationship between project information and track records of model accuracy, we will estimate the required work hours and the expected accuracy before a project starts, and use this in quotation and staffing decisions. This shifts us from individual development dependent on personal experience to a reproducible development structure backed by data, enabling business growth that is not constrained by headcount.

Third, we will operate, first within our own business, a design knowledge AI mechanism that can search and summarise the drawings, design documents and technical verification records accumulated in-house across the organisation. We will create a state in which engineers and sales staff can immediately refer to similar past cases and the grounds for past judgements, and reflect the usage data and improvement insights obtained there in the quality of the knowledge-utilisation services we provide to customers.

The structure for advancing the strategy effectively

Kyocho Shin, Representative Director and CEO, concurrently serves as CIO (executive officer responsible for overall implementation) and personally directs the formulation and advancement of the DX strategy. Beneath this, we place a DX promotion team made up of members from the technical and business divisions, with clearly divided roles: standardising drawing and 3D geometry data and project data and developing the data infrastructure; planning measures based on data analysis; and managing and reviewing progress against indicators. Our strength lies in a structure where engineers take part in both technical verification and business decisions, and management and the DX promotion team review measures regularly so that the results of data analysis feed directly into decision-making.

On developing and securing talent, we will put our in-house technical knowledge of 3D geometry analysis and AI model building into words as documents and data, and make it available for anyone to refer to and learn from through our in-house design knowledge AI, thereby converting knowledge that had been tied to individuals into an organisational asset. In addition, we will set a development policy under which skills in designing, analysing and utilising data are acquired step by step within daily work, and will continue to secure and develop talent through an environment where people can learn across fields from web development to AI and hardware, through collaboration with universities, research institutions and outside experts, and through long-term internships.

Preparing the environment for advancing the DX strategy

As the foundation supporting our DX strategy, we are building a data platform that centrally accumulates drawings, 3D models, project information and technical verification records, together with a cloud computing environment for training and running AI models. We are also introducing analysis and visualisation mechanisms so that management can grasp the state of the accumulated data and the progress of measures at any time, creating an environment in which data-based discussion can take place across divisions. In addition, to meet the requirements that apply when handling customers’ design information, we maintain a configuration that can provide equivalent analytical functions in on-premises and closed network environments.

Given that the data we handle includes customers’ design information and manufacturing know-how and is therefore highly confidential, we have established an information security policy and implement technical measures including minimising access privileges, encrypting data, recording and monitoring operation logs, and preparing backup and recovery procedures. We also conduct information security training for all employees on a regular basis and maintain an operational structure that continuously checks compliance with our internal rules.

Indicators for the achievement status of the strategy

We set indicators for measuring the achievement of our DX strategy in association with the content of the strategy, and manage progress continuously. As indicators of customer value created through data utilisation, we set the coverage rate of design defects detectable by AI-based automated design verification, the rate of reduction in design verification and drafting hours at adopting companies, and the rate of reduction in the number of reworks after drawing release.

As indicators of our own transformation, we set the number of drawings and 3D geometry data items accumulated in structured form, the number of reusable standard rules and templates prepared through data analysis, the accuracy of pre-project estimates of work hours and expected precision, the rate of reduction in development lead time per project, and the usage rate of our in-house design knowledge AI. By reviewing these indicators regularly and analysing the gap against targets to feed into revisions of the DX strategy, we will clearly grasp the business results our measures produce.

A message from the top, leading DX

I believe that the greatest value in Japanese manufacturing lies in the wisdom of design and machining that has been built up on the shop floor. Yet much of that wisdom is now closed inside the experience of individual engineers and is being lost. The reason we work on 3D and AI technology is to inherit that wisdom as data, so that the next generation can take on more creative work.

This transformation cannot be achieved simply by providing technology to our customers. I will stand at the front myself, changing our own development and business operations to be based on data, and contribute to realising a future in which everyone who pours passion into manufacturing can bring out their full potential.

Kyocho Shin, Representative Director and CEO