Bringing a revolution to manufacturing business models through 5G and IoT

Feature article for "be CONNECTED." April 28, 2020

In March 2020, provision of the "Global IoT Package," a set of services to support global deployment of IoT, began. This service package, born out of cooperation between KDDI, the Toshiba corporate group, and SORACOM, all of which operate in different types of business, is being looked at as something that could bring a revolution to the manufacturing industry. With that in mind, we had key people from 3 companies speak about what is happening now on the front lines of business, and what kind of revolution we must begin to move towards. (This article is in two parts.)

Network issues particular to the manufacturing industry:
5G opens the way to solutions

Fujii: I agree very much with the idea of DE (digital evolution). The reason I got involved with KDDI in the first place was because I felt that through connecting two things by telecommunications, the scope of the creation of new value could be evolved. Looking back on history, the connection of international phone lines greatly expanded the possibilities for trade business, and through the spread of Internet lines, the retail industry experienced the birth of new possibility in EC (electronic commerce). Now, if we can connect manufacturing around the world through IoT, I am sure that new opportunities will become visible. Of course, as a telecommunications provider we want to incorporate into this endeavor the possibilities of technologies like 5G and LPWA(Low Power, Wide Area), but I see the superiority of these technologies as only coming to life once there is a service that can maximize their utilization.

Shimada: I agree. However, especially when it comes to network environments, there are specific issues with the manufacturing industry, and because of this there are barriers we cannot overcome without the assistance of KDDI and SORACOM. With BToC projects or office environments, network providers give you fully prepared network lines that you can utilize to your heart’s content, but in, for example, a factory, the line is dedicated, and for public transportation, etc. nothing like regular network circuits are used. In other words, they are separated, and this is not very well known. People in IT say, “If you want to utilize data, you can easily obtain it using Java,” but we can’t because things aren’t set up for that.

Katayama: Yes, people think the issue can be solved with a single application, but circumstances do not allow that.

Shimada: People say “You can just use JSON (JavaScript Object Notation) to exchange data,” but it’s not that simple. If that was possible, we could use much cheaper networks and accomplish a variety of things on the cloud, but a set of different barriers -- “criticality,” “security” and “safety” – stand in the way. These are very important. In a factory, if something happens it can endanger workers’ lives, so security must be ensured using a dedicated connection. If we can satisfy such requirements while moving forward, we can enable large-scale changes, and 5G could be one major chance for doing this.

Katayama: A benefit of clouds is that data is stored on the same infrastructure and can be used with a fast and large-bandwidth connection without being influenced by the size of the data. With the spread of 5G, which allows high-bandwidth transmissions, more data will of course be storable on clouds, but also, for example, data that is stored in factories will be more easily accessible from clouds. As Mr. Shimada said, there will be impacts from overcoming barriers like this.

Shimada: The connections used in factories now are not designed so they can be easily connected to with an URL, like websites are. Because of this, different departments of the same company cannot easily access data stored there. Despite having large amounts of data, they are unable to access it.

Fujii: This is also true for railroad networks, power grids, as well as telecommunications grids like the Internet and phone lines, but simply connecting a few places peer-to-peer will not generate a large impact, but once those connections are made into a network, the amount of things that can be done increases greatly. By the railroads being formed into a lattice network, the travel and real-estate industries grew, and through the development of the power grid, the home appliance industry was raised. And so, as IoT gathers data from all kinds of things, if that can be connected on the network, then new businesses can more easily be born.

Shimada: However, price is important, and I think it needs to fall more. The MQTT* transfer protocol was originally for that, but I am hoping that the price will fall yet further.

Fujii: Speaking from the standpoint of a telecommunications provider, a huge amount of investment is made into setting up base stations, and this holds true for 5G. However, if the manufacturing industry is able to, for example, achieve a revolution in the direction of service creation, the returns could exceed these investment costs. This is why I think that we have to do this together.

Shimada: That really is correct. When we look back at the start of the implementation of 4G, had it been based on a continuation of using feature phones, it wouldn't have accomplished much.

An overview of the Global IoT Package. It covers data collection, storage, visualization and API interconnectivity, to support customers’ global IoT business.

Katayama: Yes, feature phones are based on communicating data via text, so even if communication speed or volume increased it wouldn't matter much (laugh).

Shimada: What good is it if something that took 0.01 seconds to connect now takes 0.001 seconds, right? (laugh) But, with the introduction of smartphones, things changed, and services that took advantage of the new speed and data volume of 4G appeared and the world changed. In the same way, applications are necessary for 5G, applications for critical infrastructure that make use of 5G's low latency.

Fujii: And that is why I believe firmly that the telecommunications industry and the manufacturing industry must work together on even footing to create such applications. However, these two industries alone proved to be not enough; we needed someone like SORACOM. Whether it's AWS or Google, no service provider has been successful right from the start; it's said that by continuing to provide the service, collecting data and using the software culture to speed up the cycle of improvements, they were able to find the way to success. In addition the technical prowess at SORACOM, I think that a level of speed on par with west-coast software companies was key in this cooperation between our companies.

*MQTT: An acronym for Message Queue Telemetry Transport, it is a lightweight message protocol based on a publish/subscribe model. One of its characteristics is its ability to function even in areas with unstable network connections or on poor-performance devices. It uses a TCP/IP network as a base to operate on. Creating an ecosystem through a single, cross-industry team to enable innovation.

Creating an ecosystem through a single,
cross-industry team to enable innovation.

Katayama: SORACOM is a small-scale company, but in the area of software it is highly productive, so for example, when making a prototype, as long as we have a network environment and cloud, and some people who will promote that business, we can move forward with it quickly. So, even at our company size, I think we can provide plenty of contribution to such projects.

Fujii: When working with pure manufacturers on IoT projects, do you experience any issues due to being in different industries?

Katayama: Not really. Of course we use different languages and when we go to onsite there are all kinds of things we do not understand, like the PLCs used to control equipment at factories, but as we talk to each other, and we tell them, "This data can be sent from the PLC to the cloud," it is they who get surprised. That leads to further talk, like "If we can get that data, then we also want to get this data," and "Can you tabulate the data?" So we can actually say that our industries are well-suited to each other. I think that many people in the manufacturing industry have wanted to better use their data like this for a long time.

Fujii: In that way, new things can be born when people who are from different primary business domains respect each other and work as a team. I feel that until now the production lines of the manufacturing industry and the integration business of the software industry have been working separately. If networks can connect them into a single package, the possibility for innovation will rise greatly.

Shimada: Probably a redefinition of standardization and architecture will occur; this has to happen to produce change globally. To overcome technical challenge such as the differences between different countries’ telecommunications environments, rather than the manufacturing industry struggling by itself, it must work together with other industries.

Katayama: For example, if through my company providing roaming technology and APIs the differences between countries’ telecommunications could be overcome, it would become easy to do global business over that network. In the “Global IoT Package”, through our 3 companies combining their strong points and collaborating, companies that use the package will surely search out new business opportunities.

Fujii: We can see even through our talk today that there are various issues that must be addressed, but I feel that a stance of “Just get started” is a good one to have. We are in a time where no matter how many meetings you hold, no matter how much you plan ahead, no one can say whether something will go well or be profitable or not. Even if the scope is small, companies need to just start. If this happens, I believe that Japan’s DX will greatly advance, and it will lead to a change in the business model of the manufacturing industry.

Shimada: What we were able to talk about today is only a tiny fraction of this topic; there are a large number of new ideas that the Toshiba group is pursuing, and for each one we receive the question, “Can Japan win on the world stage with this?” It is not easy to answer that completely (laugh), but if I may answer, I say “Yes.” If companies from different industries can cooperate as a single team to create new services as we have done this time with the Global IoT Package, and this leads to the creation of an ecosystem within which both companies from different and the same industry participate, I believe that Japan can recapture its glory.

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