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No. 2 (April 2016) Special Issue on NEC's Smart Energy Solutions Led by ICT

Vol.10 No.2 (April, 2016)

NEC is tackling social value creation in the belief that the realization of "value chain innovation" will be indispensable in providing new value to the people, things and processes that are linked together in the supply chain comprising "MAKE," "CARRY" and "SELL." In addition, NEC believes that by incorporating ICT advances such as IoT, Big Data and SDN in the value chain, it is possible to build innovation processes that create new value.

This special issue introduces the reader to concrete examples of how NEC is tackling this objective in each stage of the value chain, the solutions that deliver innovation, various case studies, and our ICT supporting NEC’s Value Chain Innovation.

Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life

ISHII Chikara


In order to respond to the various issues in the enterprise domain, NEC believes that value chain innovation - the creation of new value that connects people, goods and processes in the supply chain that links “MAKE” (manufacturing), “CARRY” (logistics) and “SELL” (retail and services) - is an indispensable key. This article will introduce the reader to how NEC defines value chain innovation and what value it can provide.

Value chain innovation: "MAKE"

SEKI Yukihide, OKANO Miki, KOYANAGAWA Hideki

In today’s competitive business environment, Japanese manufacturers face increasing pressure to radically overhaul their production plants and innovate their technology and manufacturing practices as they attempt to generate a new sense of monozukuri. These changes include supply chain optimization accompanied by globalization, as well as inventory reduction, lead-time shortening, and enhancement of fluctuation response capability. Yet as attractive and essential as all this may seem on paper, the reality is that in many cases actual production sites are only partially optimized and the structures necessary to facilitate these changes remain incomplete. At NEC, we have synthesized the experience and best practices in production innovation and supply chain reform gained through years of trial and error. This paper introduces the NEC Manufacturing Co-Creation Program, which was developed to kickstart efforts by manufacturers to innovate for the future.

OKU Kazuya, OKADA Kazuhisa, MIYATSUJI Hirofumi

The trend towards a fully networked future - where everyday objects embedded with electronics, software, sensors, and connectivity, enabling them to exchange data with each other and with operators, central databases, and so on - has become inescapable. Throughout the world, especially in Germany and the United States, businesses and industries are actively utilizing the Internet of Things (IoT) to innovate business processes as well as products and services, which in turn will lead to reforms in business models and industrial structure. Japanese manufacturers are no exception. From increasing a company’s competitiveness to addressing the demands of stakeholders, the incentives driving the move to IoT are intensifying. At NEC, we believe that there are two key areas in which IoT can play a critical role: process innovation (for networked plants), which enhances flexibility by optimizing control of facilities and equipment in real time; and product innovation (for networked products), which increases added value by offering new services and new ways to use products. NEC Industrial IoT is the solution that will support the achievement of both process innovation and product innovation.


A number of years ago, the German government launched a project called Industrie 4.0, whose goal was to promote a cyber-physical system that would make possible “smart” factories. Likewise, in the Japanese manufacturing industry - where piecemeal improvements have already been implemented - a more cohesive effort is now underway to achieve “Process innovation” through the utilization of Internet of Things (IoT) and standardization of device interfaces. In the meantime, the Japanese auto industry, which is Japan’s dominant industry, is undergoing significant structural changes as a result of global production shifts. This paper discusses NEC’s proposal for advanced quality management system models based on IoT and big data, as well as related issues pertinent to the achievement of smart factories.

Value chain innovation: "CARRY"


Manufacturing and distribution industries are penetrating in Asian developing countries where economic is growing rapidly and logistics infrastructure is actively improved to support supply chain. At present, many of logistics companies in the Asian region directly contact the in-house relevant departments or related companies when they receive inquiries about the transportation status of the cargo from the owner. This poses issues such as necessity of time to reply to the owner or increase in man-hour to handle inquiries. This paper introduces the “Logistics Visualization System” as a solution to such issues.

Value chain innovation: "SELL"

NOTOMI Narumitsu, TSUKAMOTO Michiko, KIMURA Masaaki

Over the past few years, trends in consumer behavior have undergone dramatic changes. Along with globalization of the economy and rapid evolution of the ICT environment, this has spurred a revolution in the retail industry. Retailers have found themselves forced to compete for consumer attention like never before. In such an environment, they can no longer survive unless they are chosen by consumers. To survive in the future, retailers must commit to consumer-driven models. To help the retail industry adapt to this new environment, NEC has developed ICT strategies to support retail operations in three key areas: improvement of consumer convenience, achievement of operational excellence, and IT service life cycle management (LCM). Furthermore, NEC is focusing on technology/product development and strategic investment aimed at adapting to the evolving needs of consumers and retailers.

KOIKE Yuichi

Allowing people to make payments electronically has become critical for any business or organization that wishes to offer more advanced and convenient services. Today, electronic payment is widely used in many countries and comes in a variety of forms, primarily prepaid, debit, and credit, depending on the needs of users and services. These payment systems are supported by various underwriters such as the issuing bank or company (issuer), acquiring bank or company (acquirer), and authorized outlets. Moreover, as money is involved in the electronic payment system, an array of powerful security technologies are used. This paper gives an overview of electronic payment services and discusses the features of NEC’s electronic payment solutions.


When it comes to shopping, modern consumers are presented with a panoply of choices that make it possible to purchase what they want, when they want, where they want, and how they want, thanks to advances in ICT technology. From using their smartphone to pay for goods in a traditional bricks-and-mortar store to buying a product online from the comfort of their home, consumers expect to enjoy a seamless shopping experience no matter where they are or what shopping method they choose. This, in turn, is prompting retailers to shift from conventional single- or multi-channel sales to omni-channel sales. As omni-channel focuses on the integration of all touch points, it requires seamless integration of all channels on the back end. In other words, information about the customer and their previous purchases - whether purchased online or in a store - must be accessible to customer service representatives at any touch point. This paper discusses the background and reasons why the omni-channel is now attracting attention, future direction of systems required for the omni-channel era, and the concept underlying NEC’s solutions.


As the number of tourists increases around the world, new hotels are being built at a rapid clip. In Japan, NEC has gained considerable experience and know-how through the development and deployment of NEHOPS, a leading-edge backbone system for hotels. Now NEC is launching a global marketing effort to promote its hotel technology worldwide. The core of the business strategy is NEC Smart Hospitality Solutions. A one-stop solution for hotels, NEC Smart Hospitality Solutions facilitates comprehensive management and operation of hotels with a single, integrated system. By achieving efficient administration and enhancing hospitality with OMOTENASHI (the unique Japanese way of entertaining guests) or “smart hospitality,” this system will increase the repeat rate and maximize the customer lifetime value (CLTV), helping hotel management grow their business by increasing profits.

Sustainable living/Sustainable lifestyles

NISHI Takahiro, AOYAGI Muneyuki, AKUTSU Akifumi
TANNO Haruyuki

More than 100 million transit system smart cards have been issued in Japan to date and their usage rate in the Tokyo Metropolitan Area has surpassed 90 percent. Transit system smart cards have been established as a new type of social infrastructure that supports many different needs and lifestyles. At NEC, since the introduction of Suica, we have been leveraging our ICT technology to advance smart card development, while deploying our systems nationwide and building new value into this rapidly progressing technology. More progress is anticipated as we head towards 2020 and demand is expected to increase rapidly as newly emerging economies invest in modern public transportation infrastructure. By taking advantage of what we have already learned, we hope to promote and support the expansion of transit system smart card technology both in Japan and overseas, thereby helping to build the social infrastructure that provides the foundation for greater public wealth and comfort.

ARAI Shuji, HAYAKAWA Akira, KATOU Manabu
SHIN Satoshi

Smart mobility, a new market centering around the auto industry, has led to dramatic improvements in safety/reliability, environment/ecology, and comfort/convenience made possible by equipping cars with smart technology and connecting them to the cloud. Related aspects of smart mobility include the development of autonomous vehicles and advanced driving support systems, as well as accelerating development of eco-cars such as electric vehicles and fuel cell vehicles. This paper discusses the issues that have affected the development of smart mobility (such as traffic accidents and environmental issues), public awareness and current problems, and society’s efforts to solve these problems. Finally, we look at NEC’s contribution to this market (image recognition technology, V2X communication technology, etc.).

ABE Tsuyoshi

One aspect of the commitment to achieving a sustainable society involves the promotion of electric vehicles (EVs) worldwide. However, encouraging the uses of EVs requires the construction and expansion of an electric vehicle charging infrastructure - which will lay the groundwork for further popularization. Having developed an EV charging controller that helped drive the development of EV charging infrastructure from tentative experiment to the level of practical application, NEC has now built a complete commercial EV charging infrastructure system featuring IC card user authentication/billing and electronic money billing functions, as well as remote operation monitoring and electric charging control. This paper describes the system developed by NEC and looks at a case where the system has been introduced.

YAMABE Tomoki, KITAGAWA Taihei, TANAKA Kazuyoshi

IoT - the Internet of Things - is “the next big thing” and it’s already here. Revolving around the incorporation of sensors in physical objects or “things”, or sensing the event or changes of environment. And then using cloud-based applications to analyze and leverage the data collected by those sensors in real time to create new values, IoT is rapidly accelerating worldwide. As a major player in communications and database technologies, NEC is well positioned to capitalize on this trend and promote its development. The company has developed and reorganized its core technologies and system technologies to create the foundation for a powerful new IoT platform. These systems are already having an impact in the healthcare field, which has conventionally been difficult to turn into a service, as well as in the physical distribution industry, which is involved in the transportation of goods. To this point, the biggest impact by far has been in the M2M market where mechanisms to quickly configure systems by more efficiently using existing infrastructures and networks are now beginning to be deployed.

NEC’s advanced ICT/SI for the enterprise domain

NAKAO Toshiyasu, OKADA Yoshiaki

NEC believes that the process of creating value from big data in order to lead to the solution of various issues should be regarded as consisting of three steps. These are sensing, (digitalization of the real world), analytics (analyses & inferences) and actuation (control & guidance). The application of big data to the innovative value chain that connects the three “MONOZUKURI” features of; “MAKE,” “CARRY” and “SELL” will contribute to the creation of social values that will support a comfortable and secure social life. This paper reports on NEC’s approach to the utilization of big data and discusses the measures actually taken to deal with it.

OTSUKA Noriaki, NISHINA Mitsuki, HIGASHIHARA Katsunori
UMEZU Keisuke, NAGAI Yoichi, MOTOHASHI Yousuke
KAWAJIRI Tsumoru, HARA Toyokazu

The optimization of spare parts inventories is an issue that is commonly found in the manufacturing industry. NEC Fielding, who are the subsidiary of the NEC Group and manage the maintenance business, also have similar concerns, because traditional statistical techniques have had limited accuracy in predicting the future demand for repair parts. The company therefore has decided to adopt NEC’s big data analysis technology “heterogeneous mixture learning.” This has enabled them to forecast demands with high accuracy. They have thereby succeeding in reducing by about 20% the inventory of the high-rotation parts that occupy a large share of the spare parts shipments. As the stockout risk is also estimated, this approach has allowed the company to challenge a more thorough optimization of the inventory. This paper describes the spare parts demand forecasting procedures performed at NEC Fielding by using the heterogeneous mixture learning engine and includes discussion of its resulting effects.


NEC’s demand-predictive order automation solution uses our original “heterogeneous mixture learning technology” to provide highly accurate forecasting of demand for Fresh Food by analyzing the correlative relationships between various factors such as sales performance by time slot, what goods are discarded or sold out, as well as weather information. This solution automatically orders the optimal amount of goods based on the predicted demand, the inventory at retail stores, and the number of goods that are scheduled for delivery. By optimizing the order amount, it minimizes overstocking and understocking, and contributes to a more efficient ordering process.

KAGAWA Kazunobu

NEC has begun to provide a plant failure sign detection service by making use of a proprietary invariant analysis technology. It is promoting global deployment of the service via outside sale collaboration with information industry departments of various so-called So-Go Shosha (hereinafter referred to as a general trading company) which are the departments that handle the IT sales of the company. This paper discusses how to adopt an approach that can enable customers to recognize the high value of global business deployment while collaborating with trading companies.

NITA Souichirou

Forecasting commodity demand for food manufacturers is very difficult to achieve because it is easily affected by variable factors such as the weather and the success or otherwise of advertising campaigns. The ambiguity of demand forecasting results in burdensome supply and demand adjustments and causes an increase in the logistics and production costs, stock-out, excessive stock and/or disposal losses. NEC applies one of its big data technologies, the heterogeneous mixture learning technology, to perform commodity demand forecasting and to automate and optimize the supply chain management systematization. In addition, NEC also applies machine learning to the simulation of sales measures in order to maximize their effects and to increase the sales volume.

SAKAI Yoshiyuki, YAMAGUCHI Tomoaki, YOSHIO Satoru

The needs for cloud computing is not seen merely from the viewpoint of leveling the operating costs simply by its introduction. It recently targets a greater contribution to customers’ businesses such as improving the value of their businesses and works, increasing productivity, etc. To achieve such targets, NEC must not merely provide its own corporate services. What is important now is to build multi-cloud environments optimally by combining on-premise and private cloud environments with the public cloud environments such as Inc. and, Inc. in order to optimize the situation of each customer. This paper discusses the multi-cloud utilization method that can contribute to customers’ businesses, and the key points and technologies of systems and data migrations.

TAMURA Yuusuke, HANAZAWA Shoichi, KITADAI Katsuyuki
OTAKE Takashi

As the Toyo Seikan Group’s network grew, the cost and complexity of network connections between the Group companies increased, while the lead time required to incorporate new companies or change network settings grew longer. To solve these problems, the Toyo Seikan Group turned to NEC to help build an integrated, cost-effective WAN. Using SDN, NEC was able to successfully integrate the Group’s WANs, as well as its firewalls. This paper introduces NEC’s SDN solutions by examining the case of the Toyo Seikan Group WAN.


Targeted threats represent today’s greatest challenge to information security and have become increasingly prevalent in Japan since 2011. As cyber threats become ever more sophisticated and advanced, their perpetrators have begun to direct their attacks at a wider range of targets including government and municipal offices, universities, and public organizations, as well as enterprises. In this paper, we focus on the damage that can be wrought by targeted attack email - one of the most common techniques used to launch a cyber attack - and discuss how to identify and protect against these threats.

KURIBAYASHI Toshimitsu, TANAKA Hiroshi, KOMAGOME Daisuke

Enhancement of security measures has become a serious issue in the management of enterprises and organizations. On the other hand, sophisticated attacks, expansion of IT usage and the increasing complexity of countermeasures have made it extremely difficult to decide on the “level of security measures to be taken now”. The security assessment proposed in this paper envisages current status from the three viewpoints of; the policy & control level, the communications status and the operational system. Based on results, a plan is proposed for security measure investments. This strategy provides enterprises and organizations with the source data for management decisions on the “timing and the amount of management resources (human, things and money) to be spent on security measures.

UNO Tohei, SUGIURA Masashi

The target of information communication technology (ICT) has now gone beyond the boundaries of corporate information systems and is currently widespread and covering many sectors, which includes business platforms for production and services as well as for social infrastructures. Recently the use of control system has become more and more significant. However, those particularly in the private sector and also the security measures of factories or plants do still tend to be inadequate. Based on interviews with company personnel this paper attempts to explain the background to the importance of security measures, the characteristics of control systems, issues related to security measures and the orientation of such measures.

TOKUDA Shigeaki, YOSHIO Satoru, TEZUKA Hiroshi
HAYASE Noriaki

The advancement of digitalization and the image quality improvement of surveillance cameras has expanded use of the computer analyses of camera images for various applications, such as for monitoring and personal authentication. NEC possesses image analysis technologies that feature the top performance worldwide in the fields of both subject and individual identifications. The company is aiming at a systematic arrangement of its image analysis technology for use in a wide range of applications. These will include; a face recognition solution that identifies individuals from their face images for use in offering hospitality to VIPs, etc., a behavior detection solution that detects human behaviors for use in crime prevention, etc., and an object identification solution that can be used to collect retail inventory information or to check the parts assembly situations of manufacturers, etc.

YAMAMOTO Kenji, OIKE Taroh, TANAKA Hideyuki
SATO Daisuke

Web-based systems are required to track the extremely high speed of innovative web technologies and to handle a large variety of business systems. The key to meeting these requirements does not lie in combining several pieces of software, but it is the “agility” of quick building and execution of solutions with a “light” configuration that can deal flexibly with change. This paper introduces the functions and expected effects of the web development framework “NeoSarf/F” and of the infrastructure supporting it “NeoSarf/J,” both of which are the fruits of our endeavors in the SE field.

OKANOYA Kuninori

Business environments vary continuously and are becoming more and more complicated. While a mechanism that can deal with environmental change is required, IoT (Internet of Things) is expected to be capable of creating new values by solving various issues. To implement the world of IoT, the embedding technology connecting the real world and IoT is of increasing importance. This paper introduces system solutions for achieving effective IoT that can deal with the constraints effected by various utilization environments, etc. This is done by implementing functions such as sensors, data communication and data processing.


As many large and medium sized enterprises adapt ERP in their core systems, demand for Real-time and global requirement is increasing. Due to this trend, SAP SE, which is the biggest supplier of ERP portfolio, is positively promoting the following: SAP HANA Architecture featuring in-memory DB, Business By Design featuring cloud-based ERP and Best Practice featuring templates for various business types and industries. NEC’s SAP business also employs these solutions to support our customers. This paper introduces our advanced approach to using these solutions in our SAP business together with a discussion of case studies of selected customers.

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