Yokogawa’s Co-innovation Strategy and Acquisitions

At the Yokogawa European User Conference 2016, ARC Advisory Group conducted interviews with two executives and several corporate leaders to discuss Yokogawa’s strategies for business transformation. In one blog in this series, we wrote about Yokogawa’s vision for digital transformation in Industrial Automation and IT and in another one about our conversation with Tsuyoshi Abe, General Manager and Vice President of Marketing.   In an earlier blog we reported Yokogawa’s new vision and mid-term business plan, “Transformation 2017.” Focusing on customers, Yokogawa has been seeking to create new value to achieve high efficiency as a global company. One of the ways Yokogawa’s does this is by co-innovating together with customers and partners. This blog is about our conversation with Satoru Kurosu, Executive Vice President, Solutions Service Business, Yokogawa Electric Corporation, who provided several examples to illustrate co-innovation. Co-innovation with Shell and Cisco to create "SecurePlant" and "PACE" Mr. Kurosu told us that for its SecurePlant program,  Shell recognized the value of Cisco’s offering, but also required a solution that went beyond IT to include knowledge of processes and automation. Shell chose a joint Cisco and Yokogawa solution.  The parties “co-innovated” the “SecurePlant” security management service for plant control systems, which includes a 24/7 support center. The service has been deployed at 20 Shell facilities. Mr. Kurosu commented that the deployment is an important investment, but that it will be profitable once completely rolled-out. Yokogawa also built a cyber security competence center in Singapore with certified global industrial cyber security professionals (GICSP) to support increasing demands for secure system design. Another example Mr. Kurosu mentioned was the work with international oil & gas companies to decouple hardware I/O from engineering, that leads to the new configurable I/O subsystem, N-IO. Advanced Process Control and Estimation (PACE), developed in collaboration with Shell Global Solutions is another example of co-innovation. A recent release includes new user-friendly HMI and automatic step testing. Strategic Acquisitions: KBC and Industrial Knowledge Andy Howell, CEO of KBC Advanced Technologies (KBC) and Simon Wright, CEO of Industrial Knowledge (IK), participated in a discussion on Yokogawa’s solution strategy to provide more applied knowledge. Both the KBC and Industrial Evolution acquisitions support that strategy. Post-merger integration has started, with common solutions being created. Yokogawa perceives the consulting capability of both companies as the most powerful synergy of the acquisitions. Traditionally, Yokogawa has been good at customer focus and quality, and engineering. KBC adds the strategic consulting, and workforce development and the combined capabilities can now be digitalized and brought to the cloud by IK to share operational data. The complementary relationship between the companies covers all layers to create and sustain value for customers. The acquisitions will enhance Yokogawa’s advanced solutions portfolio and its established ability to deliver operational excellence from management to the field, focusing on the entire lifecycle of its clients’ assets.