Investing In A Digitally Integrated Future
Circular Digital-Engineering: Maximizing The Potential Of Data
Mitsubishi Electric Corporation is aiming for higher growth by integrating digital innovation and sustainability through a new digital platform called Serendie. Under the banner of “Circular Digital-Engineering,” the company is leveraging data and cross-disciplinary collaboration to create new value, address social challenges and open new markets.
Nobuo Asahi, Senior General Manager of the DX Innovation Center, has been on a global tour to promote Circular Digital-Engineering and its role in Mitsubishi Electric’s digital transformation (DX). “Our company has been in manufacturing for over 100 years, but our traditional approach to business is becoming increasingly ambiguous,” Asahi says. “Markets are becoming more complex, and the pace of cultural change is accelerating, so it is crucial that we speed up the adoption of effective digital technologies to meet a wider range of needs.”
Circular Digital-Engineering is built on four key elements: data aggregation, insights inspection by data analysis, the creation of new value, and the redistribution of value. In practice, Mitsubishi Electric aggregates data generated through usage of its components and systems from a wide range of customers. This data is then integrated into a digital space for analysis to identify latent issues and needs. Based on these findings, the company evolves its solutions to create new value that is redistributed to a broader range of customers, providing solutions to social challenges.
“Meeting the needs of a diverse and complex world requires extensive domain knowledge and data,” Asahi says. “We are a conglomerate of power systems, social systems, building systems, factory automation and automobile-related technologies, as well as home appliances and semiconductor devices. This wide-ranging experience and knowledge is our strength and gives us the ability to evaluate extensive data to create new businesses—and generate new value—based on it.”
DX Innovation Center: New Possibilities For Co-Creation
The DX Innovation Center, established in 2023, promotes Circular Digital-Engineering across the company by leveraging data collected through advanced analytics tools to inform decision-making and foster collaboration through application programming interfaces and integration tools. Real-world case studies are already emerging. “Our discussions are based on quantitative data, enabling us to identify customer issues and address them effectively,” Asahi says. “By visualizing data more effectively, we found cases where millions of dollars were being wasted annually.”
Given that electricity costs are also rising, Asahi notes that a practical solution was provided by capturing the relevant data points and automatically making adjustments using generative artificial intelligence. “During winter, we had about two and a half months of analysis, resulting in an adjustment that led to energy savings of around 20% to 25% without sacrificing comfort,” he says.
A key element of Mitsubishi Electric’s digital transformation strategy is expanding and upskilling its digital workforce. The company aims to grow its DX talent pool from 6,500 in 2023 to 20,000 by 2030 through reskilling and recruiting new talent and strategic hires. Comprehensive DX training programs will be implemented across the organization.
As such, the company is evolving beyond a traditional company culture by embracing the principles of the DX Innovation Center. This forward-thinking approach guides Mitsubishi Electric toward a path of robust financial performance and significant societal value through cutting-edge and sustainable business practices, including the introduction of a new cross-collaboration digital platform called Serendie* that leverages data with fresh perspectives.
Serendie: A Platform To Enable Digital Transformation
To facilitate Circular Digital-Engineering on a global scale, Mitsubishi Electric has started Serendie, a digital platform that embodies the fusion of “serendipity” and “digital engineering.” Serendie integrates data from various domains and systems, enabling the creation of new value through advanced data analysis and rapid service deployment. “The activities we are undertaking can be characterized through the concept of serendipity,” Asahi says. “If we can create the environment where good ideas from others can synchronize with our data, which previously wasn’t fully considered, we expect to be able to offer solutions that influence the world, at least in the field of DX.”
Success stories include smart building solutions that integrate building management, air conditioning and power systems, railway solutions that optimize train operations and power usage, and factory solutions that enhance operations with a focus on carbon neutrality and supply chain management optimization.
A new facility in Yokohama, called Serendie Street, is being established as a collaboration center meticulously designed to foster an environment that encourages free thinking and creativity. The space will bring together Mitsubishi Electric’s innovation teams, customers and other stakeholders, providing a dynamic hub where ideas can flourish and innovative solutions can be developed. With plans to roll out branches in key markets worldwide, Serendie Street aims to become a global network of collaboration centers, each dedicated to advancing technology and driving progress through open and imaginative dialogue.
Driving Growth Through Open Innovation
As Mitsubishi Electric actively implements Circular Digital-Engineering and fosters “open innovation” through Serendie and by partnering with startups, the company is transforming its business model from product-centric to customer-centric to emphasize “direct value delivery and agile development” for faster, more flexible product creation. Additionally, the company is transitioning to service-based business models to provide ongoing customer value.
This is fueling the company’s aim to achieve an operating profit margin of over 8% by FY2026 (beginning April 1, 2025 and ending March 31, 2026) through strategic investments and enhanced profitability measures. Its capital allocation plan anticipates the generation of 3.3 trillion yen (US$20.9 billion) in cash over the five years by FY2026, with a total capital allocation of 3.4 trillion yen (US$21.5 billion), including shareholder returns.
Looking ahead, Mitsubishi Electric’s DX efforts, particularly those related to the Serendie platform, are expected to drive significant revenue growth. The company aims to increase revenue from 640 billion yen (US$4 billion) in FY2023 to 1.1 trillion yen (US$6.2 billion) by FY2030 and improve operating profit margins from 16% to 23% within the same period.
*Trademark pending
link