DX that shapes demand, supply, and engineering. Dentsu Group and Fujitsu are leveraging their strengths in different fields to make this a reality.

Digital transformation (DX) that connects consumers and businesses through data is now advancing to the next stage. By accurately capturing the ever-diversifying and complex consumption trends of consumers and applying this insight to product development and production, it becomes possible to "produce exactly what sells, when it sells, where it sells, and in the quantities that sell." Reducing surplus inventory enables the simultaneous optimization of business activities and the resolution of social issues.

Dentsu Group, which has advanced DX in the demand chain centered on marketing and includes Dentsu International Information Services (ISID) – a group company with strengths in the engineering chain – has joined forces with Fujitsu, which has advanced DX in the engineering chain and supply chain, to embark on realizing this ideal. Key figures from both companies discuss the significance of the project.

※This content is reprinted from Nikkei Business Digital Edition SPECIAL. https://special.nikkeibp.co.jp/atclh/ONB/22/dentsu0826/

 

Transformation for both consumers and businesses. Eliminating the dilemma of corporate activities

"Transformation is occurring for both consumers and businesses," states Fujitsu's Mr. Mizukou. The proliferation of smartphones among consumers has increased the volume of information they encounter. Consequently, consumer behavior has diversified and become more complex, while the pace of change has accelerated.

For businesses, the era of solely pursuing profits has ended. Addressing societal challenges like sustainability and SDGs is now essential. Achieving this is impossible with traditional management reliant on intuition and experience. "Digital Transformation (DX) is necessary to respond to consumer changes with agility and flexibility," states Mizumitsu.


"To achieve this, we must change the current situation where systems are fragmented by function and organization," states Mr. Watanabe of Dentsu Inc. "Unless we connect all corporate activities through data and collaborate, companies cannot realize their true potential," he adds. The primary goal of the partnership between the Dentsu Group and Fujitsu is to eliminate the dilemma that has divided consumers and businesses.

Integrating supply and demand through data. Eliminating waste in economic activity

The Dentsu Group and Fujitsu aim to integrate three value chains through DX: the "Engineering Chain," which creates value sources and provides technical resources; the "Supply Chain," which realizes value with optimal resources; and the "Demand Chain," which maximizes value by discovering and stimulating demand. The "Demand Chain," which maximizes value through needs discovery and demand stimulation. The DX connecting these three represents a groundbreaking attempt to link supply and demand, a challenge leading to the optimization of economic activity as a whole. There are almost no comparable examples domestically or internationally.

By releasing only the right amount of sellable products to the market and reducing surplus goods, companies can achieve lean business operations, simultaneously boosting sales and cutting costs. If surplus inventory seems likely, data can be shared with the Demand Chain. This enables agile marketing campaigns targeting specific areas or media to stimulate demand and sell out the products.

As exemplified by food waste, surplus goods not only squander resources but also create multiple problems: costs for recovery and greenhouse gases from incineration. Conversely, if supply fails to meet demand, it results in lost business opportunities and reduces customer convenience and satisfaction. Minimizing waste in every scenario contributes to the optimization of economic activity as a whole, and ultimately, society as a whole.

From Demand Forecasting to Optimizing Both Supply and Demand: A Challenge Leveraging Both Companies' Strengths

"We'll start with a service that optimizes the supply-demand balance for products, beginning with demand forecasting," says Watanabe.

Leveraging Dentsu Inc.'s vast demand chain data, we analyze historical advertising data for similar products and competitors, along with the latest demand trends. Inputting this data enables more accurate demand forecasting, allowing the supply chain side to formulate production plans. Meanwhile, on the demand chain side, we optimize and fine-tune marketing strategies by incorporating information like inventory data—information that was previously difficult to share due to organizational silos. Through efficient operations, we aim to maximize our clients' operating profits.

"Connecting the supply and demand sides through data is itself a new initiative, so that alone will yield results," says Watanabe.

 
Mr. Suiko states, "Fujitsu has two major strengths." One is the know-how gained from supporting supply chains across diverse industries. The other is technology. "The fact that we are a manufacturing company ourselves is also significant. We have honed our optimization technologies, including production and inventory management," says Mr. Suiko.

Watanabe states that the Dentsu Group's strengths also have three aspects. "The first is data and expertise in the marketing domain. The second is industry networks, and the third is having ISID within the group," (Watanabe). Dentsu Inc. possesses big data on consumers and markets, a network spanning broadcast-centric mass media to internet platform providers, and connections with over 6,000 clients. Having ISID within the group—which excels in the engineering chain and supports clients' DX initiatives—enables collaboration with Fujitsu in the engineering chain.

"Leveraging both companies' strengths, we will challenge this unprecedented endeavor of 'connecting the three value chains,'" (Mr. Watanabe)

The strengths of the Dentsu Group, including ISID, and Fujitsu across the three chains. By collaborating, the entire cycle becomes connected through data, enabling effective DX.

The Dentsu Group seeks to connect businesses and consumers. Fujitsu, aiming for a sustainable world under its new corporate brand "Fujitsu Uvance"*, is a partner in this endeavor. Their collaboration represents a challenge that brings new hope for the future of businesses.

※Fujitsu's new business brand. It aims to "create a sustainable world where everyone can move forward toward their dreams by connecting diverse values through trust and bringing flexibility to adapt to change."