Tradition, history, growth—these are the hallmarks of Mitsubishi Electric, one of Japan’s leading global companies. Its steady expansion despite the turbulence of the past century is a result of its forward-looking strategy of keeping a close eye on trends, and then navigating them swiftly and accurately. So how does a manufacturer that spun off from Mitsubishi Shipbuilding the same year baseball was first broadcast on radio (ahem, 1921) retool for the future? The answer is by training its sights on a new mission: Circular Digital-Engineering, the company’s term for its process of digital transformation.
While diversifying across a wide range of fields—from air conditioning systems, elevators, factory automation equipment, power systems, and railway equipment to high-profile space and satellite technologies—Mitsubishi Electric traditionally maintained a relatively vertical structure. Now it is transitioning to a more horizontal organization in which the vast amount of data possessed by each division can be shared and analyzed across the organization, circulating and interacting to engineer, in a sense, something new. By eliminating barriers, establishing strong connections throughout the company, and dispersing knowledge and insight, Mitsubishi Electric hopes to deliver innovation and value to its customers and shareholders alike.
At the core of this focus on digital transformation, or DX, is a new digital platform that it calls Serendie (trademark pending).
“Over our 100-plus years in the manufacturing industry, the Mitsubishi Electric Group grew accustomed to market segmentation, devising different systems and rules optimized for each of those segments,” says Nobuo Asahi, the director of the DX Innovation Center, a new facility founded to promote Circular Digital-Engineering. “However, markets have become more complex. The pace of change is accelerating rapidly, blurring the borders between segments and diversifying customer needs. This means that the old mass-production model of doing business—in which we produce the same products with the same specifications and in large quantities—should be changed.”
Asahi spent his student days immersed in AI research when the field was in its infancy. He joined Mitsubishi Electric after graduating from university and has since focused his attention on promoting the company’s management strategy. As director of the DX Innovation Center, he oversees the digital transformation effort.
Circular Digital-Engineering opens the door to new opportunities that could not have existed with the traditional business model. Asahi says, “We are consolidating and analyzing customer data in a digital space, as well as creating strong intragroup connections and pooling knowledge—all in the name of delivering new benefits and economic value while addressing social problems.”
A New Business Model in Serendie
Mitsubishi Electric calls its new digital platform for advancing Circular Digital-Engineering, Serendie. Previously, each division in the company—HVAC, power generation, building management, rail transport, factory automation, and more—managed its own database. With Serendie, employees can access a single digital platform that consolidates all of this data and then use it to conduct integrated analyses and establish new business ventures through co-creation with other divisions or clients. The name Serendie, a portmanteau of “serendipity” and “DE” (digital engineering), reflects the hope that sharing data will spark new insights and ideas that inspire the sustainable creation of useful products and services for the future.
So, what kind of projects is Serendie facilitating? “In one example, it allowed us to more effectively utilize the regenerative energy produced by trains when braking,” Asahi says.
Regenerative braking is a mechanism for converting the kinetic energy of a decelerating vehicle into electrical energy that can be repurposed. This technology, also found in electric vehicles, reduces energy consumption and carbon emissions. However, when Mitsubishi Electric analyzed data from its client, a railroad company, it discovered that much of the recovered energy was never properly repurposed. “We found that every year, energy worth hundreds of millions of yen was simply being dissipated,” Asahi says.
Armed with this knowledge, the company embarked on a project to visualize regenerative energy on a map, which allowed it to identify the locations where trains were recovering energy and ascertain the optimal placement of equipment to supply that energy directly to train stations. This ensured that the recovered energy would be transmitted to the stations, where it could be reused effectively instead of going to waste.
The same data was used to devise a service incorporating electric power solutions and offered it via a web API. The trial project was completed in about six months, and commercialization is set to begin soon. Given that Mitsubishi Electric is used to working on massive projects that take two or three years to complete, this is an unprecedented pace.
Another core sector where Mitsubishi Electric will deploy Serendie is building management systems, enhancing services for tenants. For instance, autonomous robots could deliver meals directly to offices using precise location data. Or generative AI could analyze HVAC data to improve indoor temperatures while boosting energy savings.
These are just a few examples of the potential for greater efficiencies. “As both internal and external solutions can be integrated into our API infrastructure, the possibilities are endless,” Asahi says.
A Global, Diverse Approach to Value Creation
Mitsubishi Electric is analyzing data to ascertain customer needs and develop swift, agile solutions that are only possible with digital technology. Since Serendie can shorten lead times and be deployed at a reasonable cost, it offers the significant advantage of enabling expansion into fields once seen as unprofitable.
Asahi believes that the vast amount of data pertaining to components produced by Mitsubishi Electric will enable sustainable value creation. He sees real-life stories of Serendie’s success as key to instilling awareness throughout the company of the need to reinforce the cycle of collecting more data to realize greater benefits and economic value. This in turn could help Mitsubishi Electric expand its business to sectors that would have been unthinkable just a few years ago.
“Every company is pursuing digital transformation in its own way,” he says. “I would like to show the world that Mitsubishi Electric, as a general electronics manufacturer known especially for components, is uniquely positioned to use digital transformation in its own way to create a better world.”
Going forward, new innovation hubs, what Mitsubishi Electric calls “Serendie Street,” will open not only in Japan but in the United States, Europe, and elsewhere in Asia. These centers will cultivate a rich diversity that transcends geography, language, and culture and expand the company’s human resource network on a global scale, thereby developing the company’s capacity for value creation even further.
Serendie was developed as one solution to the challenge of digital transformation, a challenge faced by companies in every domain. It will help the Mitsubishi Electric Group develop new perspectives and ideas, promoting co-creation with existing clients as well as partners that are not yet on the company’s radar. As Asahi assures us, the possibilities are infinite. It will be fascinating to see how the platform evolves.
