Yokogawa’s Transformation to Achieve Its “Three goals”
The expression “going concern” has often been used to describe a business that is viable from the accounting, financial affairs, management planning, and risk management perspectives, but this way of thinking is extremely limited in today’s business environment. Thanks to rapid advances in communication technologies, people can quickly check the current status of events at any point around the world and reach out to individuals and the entire global community via social network services (SNS). These technologies remind us of how everything is interconnected in this finite space, the Earth. To look after this finite space, we must achieve a balance between the three aspects of the economy, society, and the environment. Only companies that can adapt themselves to an ecosystem that meets this triple bottom line will survive.
Many companies are taking part in initiatives such as the UN Global Compact and the World Business Council for Sustainable Development (WBCSD) to foster this ecosystem, and are devising new rules for fundamental changes in business practices. In addition to lobbying governments and forming alliances with competitors to meet anticipated technical challenges, they are also taking specific actions to adapt themselves to this ecosystem such as changing their company names and redefining their business domains.
Yokogawa joined the WBCSD in May 2017 and has been working with its business partners to propose new solutions to energy issues. We are determined to make the world a better place for future generations by supporting companies in industries such as energy, materials, pharmaceuticals, and foods that play essential lifeline roles and sustain our society. To guide this effort, we have drawn up “Three goals” that set out our long-term vision for what must be accomplished by the year 2050. These call for the attainment of net-zero emissions to address climate change, well-being through the enhancement of safety and health, and the achievement of a circular economy through the recycling of resources and improvement of efficiency. We have also set mid-term targets to be achieved by the year 2030. It will not be easy to achieve these goals, and transformation is imperative.
The first transformation that Yokogawa is aiming for is evolving from mere automation supplier to trusted partner. As a preferred vendor of automation systems, Yokogawa has long offered its customers highly reliable solutions that keep their plants running stably for long periods of time. However, if we continue to focus solely on plant operations, we cannot address broader issues that are emerging due to changes in the business environment that, for example, are requiring companies to better visualize and optimize supply chains and respond to an ageing workforce. By solving these challenges, progress can be achieved toward the achievement of the Sustainable Development Goals (SDGs). Yokogawa is therefore focusing on creating value for its customers by expanding its business domain to cover all aspects of running a business, not just plant operations. In this we will make integrated use of our broad domain knowledge and digital automation technologies.
To facilitate analysis and improve productivity, plant data collected using operational technology (OT) such as DCSs and transmitters must be brought together and handled in an integrated fashion with the data on personnel, supply chain operations, facilities, and so on that is collected by means of information technology (IT). The proposal and implementation of effective strategies and solutions that will generate economic value for a customer will also require a comprehensive grasp of a company’s business processes, extensive industry experience, a solid track record in the provision of risk-free automation solutions, and an excellent capability to provide maintenance services over the entire facility lifecycle.
The second area of transformation for Yokogawa concerns our business portfolio. Changes in the business environment such as the adoption by the United Nations of the SDGs greatly affect not only our customers’ businesses but also our own. Linear and irreversible processes for the development, production, and refining of fossil fuels that result in the discharge of CO2, chemical waste, and the like are also being called into question given the finite limitations that we must all deal with. Yokogawa needs to review and reconsider a growth model that has been heavily dependent on the energy industry, which is easily affected by fluctuations in oil prices and exchange rates. While Yokogawa will continue to focus on the resource, energy, and materials industries, it will also target the health and quality of life industry category and the bio-economy business, and in so doing help to ensure the well-being that is one of our Three goals. And it is anticipated that the measurement and control technologies that Yokogawa has developed over the years will help solve the many new problems that are anticipated in the development and manufacturing of such products and enable our customers to both transform their businesses and improve productivity.
Lastly, digital transformation is quite important and plays a crucial role. We are working to improve productivity through Groupwide optimization. We have thoroughly reviewed and standardized business processes and are making full use of robotic process automation (RPA) to automate the execution of certain routine tasks. Thanks to this new technology, employees can focus on high value-added tasks that can be performed only by humans. In addition, through digital marketing, mobile workstyle, network, and security initiatives, we are drastically changing how our employees work and strengthening our foundation for future growth.
Yokogawa is a manufacturer that shares its customers’ concerns about finding solutions to issues that they encounter in their manufacturing operations. To become a trusted partner, it is important for Yokogawa to identify and find solutions to the issues that its customers are facing. By introducing to our customers the efforts that we are making, our hope is that we will be able to help them realize the digital transformation that is needed to make the transition of the cyclical user of resources and improve the efficiency of their operations.
At a number of manufacturing facilities such as the main factory in Kofu. Yokogawa has introduced products and other solutions that have aided in the visualization of conditions and the optimization of energy consumption. For both Yokogawa and its customers, energy use is a top concern that must be addressed to achieve the SDGs. Many senior executives have visited our Kofu factory to discuss with us ways in which we might co-innovate solutions in this and other areas.
For the past 100 plus years, Yokogawa has remained faithful to its founding principle of contributing to society. Based on a corporate philosophy that reads, “As a company, our goal is to contribute to society through broad-ranging activities in the areas of measurement, control, and information,” Yokogawa offers a variety of solutions that benefit both society and the environment. Amidst deepening uncertainty about the future and accelerating discontinuous change, Yokogawa is striving to maximize outcomes for its customers that will have a positive impact on society and the environment. Yokogawa is committed to co-innovating solutions with its customers that will have a beneficial impact throughout our ecosystem.
This is based on an article in the Yokogawa Technical Report (Vol. 62, No.1) that was authored by Shigeyoshi Uehara, a Yokogawa vice president and head of the company’s IA Systems and Service Business Headquarters.