A conversation with Mitsubishi Chemical Group CDO
Journey Towards Global Excellence through
'Smart Talent and Digital Transformation'
August 29, 2023
/ Article on Business Insider Japan
This English text is a translation of a document originally prepared in Japanese.
Becoming a digital chemical company with a high degree of business agility
Under its management policy of "Forging the future," the Mitsubishi Chemical Group is strengthening its competitiveness by selecting markets for global growth as well as implementing cost restructuring measures. The key to this transformation is digital innovation. The Group will utilize digital technologies and new business models to pursue process reforms that support future growth.
The Group's vision is to become a “digital chemical company.” Enabling employees to utilize digital technology and providing support to help them work even smarter than before, in other words, to be "Smarter Employees," is central to its goal. Yuji Ichimura, Chief Digital Officer (CDO), will lead this digital transformation. We interviewed him about the Group's aims in making this digital transformation, including future visions for the Group and its employees.
Taking on the challenge in the chemical industry, where digitalization is difficult, and leveraging the passion of employees
The Mitsubishi Chemical Group formulated a new group concept in 2023 comprised of the Purpose, Slogan, and Our Way. The Slogan—"Science. Value. Life."—expresses the company’s determination to contribute to the sustainability of society, the planet, and to the vibrant lives of people by creating a variety of science-based innovations, and to generate significant corporate value from all the activities to achieve this goal. “We are looking ahead to the restructuring of the chemical industry and our evolution into a globally excellent company," said the CDO.
Ichimura, who became involved in digital transformation (DX) for the global manufacturing industry after working for a major Japanese ICT company, assumed the position of CDO in September 2022. With his knowledge of the outside world, he was able to see the strengths and weaknesses of the Mitsubishi Chemical Group.
“Objectively speaking, we are not as proficient with digital technologies as some of the world's most advanced companies. To begin with, the chemical industry is difficult to capture digitally because materials undergo chemical reactions in real time and are constantly changing. In addition, the Mitsubishi Chemical Group is a large organization with a wide range of business areas and nearly 600 affiliated companies. The Group has a mix of systems in place, and this has delayed renovation." (Ichimura)
Nevertheless, he was determined, insisting, “If we are behind, we can catch up and overtake our competitors.” His confidence stemmed from the strengths unique to the Group. One of these strengths is that plants, business units, and corporate divisions had already begun digitalization in 2017. These activities, carried out separately by individual departments, became the basis for the common company-wide digital transformation that is currently underway. Another of these strengths is the potential and enthusiasm of the Group’s employees. Having made frequent visits to frontline locations since his appointment as CDO, he gained a feel for the excellence of the employees at these locations.
“Change is always difficult. Difficulties can only be overcome with passion. Our employees are not only talented but also highly enthusiastic. When I talk about digital transformation, they think hard about how they want to utilize digital technologies in quality control and production management. Younger employees then make suggestions to management, and discussions are held onsite. I felt there was a lot of flexibility for a company of this size and with such a long history.” (Ichimura)
A vision for a digital chemical company to be realized by human beings
There are talented and enthusiastic people at the frontline locations, and the Group will undoubtedly see steady success if it can leverage their capabilities using digital technologies. Ichimura was determined to succeed.
“The Mitsubishi Chemical Group is involved in every aspect of the chemical business upstream to downstream. Rather than digitalizing a portion of the business, we must transform everything from development and production to purchasing, logistics, sales, human resources, and management. To do this, we have to be willing to change everything, including existing policies, rules, and organization. That’s how far we are prepared to go.” (Ichimura)
The goal is to become a "digital chemical company" that improves its business performance and encourages employee growth by standardizing IT services, utilizing digital technology and data, and introducing digital business models. Three elements are important to achieve this.
The first is hyper awareness. The company constantly scans and ascertains the internal and external environment, including industry, market and social trends as well as geopolitical risks, in real time. It constantly and thoroughly grasps and analyzes current trends, determining opportunities and threats. The second is informed decision-making. The company pursues discussions based on open, transparent and objective evidence, and makes decisions using data and information. When these two are aligned, fast execution becomes possible. The company undertakes resilient corporate management through rapid action and continuous review and improvement.
According to Ichimura, "With these three elements, any large company can create business agility. A digital chemical company could be said to be a company that possesses digital business agility." He added that these three elements also apply to every employee.
Every employee working in sales, purchasing, manufacturing, or any other field must be constantly aware of and profoundly understand the internal and external environment, make decisions based on evidence and data, and then quickly execute measures in line with those decisions as a “Smarter Employee.” To this end, we have placed ‘courage’ at the center of these three elements. With change comes uncertainty. That is why a bit of courage in taking the first step is so important. Bravery is one aspect of Our Way, which expresses the mindset of each and every employee, and we have formulated an approach in which we can enjoy change by creating systems and environments that produce courage.” (Ichimura)
The Mitsubishi Chemical Group calls such employees working smartly "Smarter Employees." Allowing employees greater engagement and enabling them to contribute in their respective work domains will help bring about a digital chemical company. The three aforementioned elements are common to the entire group, but beyond that, images are being drawn up for the “Smarter Employees” required by each department, while frontline employees are further refining that image.
What kind of company is envisioned once “Smarter Employees” manage to achieve a digital chemical company?
“As digital automation progresses, fewer simple tasks will be required of humans, who can then undertake more high-value work. This will also enable analysis and decision-making based on data and facts, improving our real-time performance. Time will be used differently, and work will be done in a smarter way. If this motivates employees, the Group will naturally see greater growth. If we can achieve this, we can become a globally excellent company that can serve as a benchmark for the chemical industry, where digitalization is difficult.” (Ichimura)
Transforming management meetings with real-time information collection
The Mitsubishi Chemical Group is currently working on a number of digital-related projects, some of which involve the entire value chain across departments, and some of which are conducted independently by departments. Once these have been prioritized, efforts are made to connect dots to other dots to form lines, and then lines to other lines to form planes.
“We have numerous systems in place. Our initial focus will be on quickly revamping these systems, starting with feasible steps such as automation. That alone will increase operational efficiency and improve cash flow. If that is all we do, though, we will only be making isolated improvements. Accordingly, we started by carefully building the overall architecture. Based on this, we have been revamping individual systems so that everything will eventually be connected. While resolving the issues at hand, we are also laying the groundwork for the future." (Ichimura)
Efforts are already underway for management reform, data infrastructure improvement, citizen development, and smart factories. In management reform, for example, a framework has been established whereby figures such as sales and the cost of sales are automatically entered, and management reports needed for management decisions are automatically generated, with this information accessible to executives 24 hours a day, 7 days a week.
“This eliminates the need to collect and compile numbers from in-house organizations all over the world through a bucket relay of files. Executives can also conduct detailed analysis based on facts and data. When the executive members get together for a meeting, they can discuss future measures and actions in depth since they have already seen the numbers. This has also changed the way meetings are conducted." (Ichimura)
In developing data infrastructure, databases and other resources have been organized and rules and policies for data utilization established. Low-code and no-code programming is also being performed, and employees are creating smartphone apps that make their own work more efficient. When a good app is created, the information itself is also shared among employees.
In realizing smart factories, the company will apply three ideal images of what a digital chemical company’s manufacturing site should look like.
“First, processes and equipment are diagnosed autonomously to prevent equipment and quality problems and security incidents. Second, manufacturing information is automatically collected, linked, and traced to realize customer-driven Sales and Operations Planning that follows our business strategies. Third, psychological safety is ensured onsite so there are no industrial accidents. Actions to realize these three goals include carefully ensuring safety and stability in plants and workplaces; strengthening foundations such as labor productivity, “Smarter Employees,” and data-driven decision-making; and improving competitiveness in terms of customer satisfaction, high quality, stable supply, and productivity." (Ichimura)
Expanding globally on a multi-center model
Cultivating a corporate culture is also important for digital-enabled transformation. The Group has already launched an internal portal site for posting project progress reports and other digital-related internal information. The Group is also using the Reverse IT Mentoring System to raise IT literacy by having younger, digitally-skilled employees serve as mentors to executives. “Unless we improve the literacy of top management, divisions will not make any headway in digitalization. We are pursuing both bottom-up and top-down efforts to spread digitalization," Ichimura noted.
“A company's culture is nothing more than the culmination of its employees' actions. To change the culture of a company, each employee must work smarter, make their work more personal, and change their behavior. These are the “Smarter Employees” I mentioned earlier. We will also be developing workshops as well as various foundations and methodologies to help us achieve this." (Ichimura)
These digital initiatives are not limited to Japan. It is essential that the Mitsubishi Chemical Group, which aims to be a globally excellent company, undertakes digitalization in cooperation with its business locations around the world. The "multi-center model" was adopted for this purpose. The most suitable personnel for specific digital reforms are placed at the center, without any country- or area-based restrictions, to drive worldwide efforts. This system is indispensable for a globally excellent company.
“Japan does not have to be the control tower for every issue just because the head office is located here. The head office is responsible for governance, but we will be transferring authority on a voluntary and independent basis. Employees from all locations may come to the head office, and head office employees may go off to business locations around the world. In fact, several of the topics to be addressed in this digital reform are being led by business locations and group companies that have already achieved a head start." (Ichimura)
Since being appointed CDO, Ichimura has been working in a rapid-fire manner on digital promotion. People around him reportedly tell him that he appears to be enjoying himself. With a laugh, he replies that it is a lot of work, of course, but he clearly exudes a sense of fulfillment.
“It is interesting to think about what kind of value we can create digitally and how we can make it of social significance. We are taking a company of this size, with this much potential and this many talented people, and digitally transforming it to become a globally excellent company that will challenge the giants of the world. I am thrilled to be in the midst of such a transformation and to be a part of it. ‘You seem to be enjoying yourself’ is a compliment. The more people enjoy their work, the more quickly they will learn and produce results. I tell myself this, and I expect other employees to enjoy their work as well." (Ichimura)
As one of Japan's leading chemical manufacturers, the Mitsubishi Chemical Group is aiming to become a specialty materials provider with a global presence by accelerating its growth through the use of digital technologies.
It is no exaggeration to say that realizing this goal will depend on future digital innovation.
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