Customer Stories

Hitachi Construction Machinery

Hitachi construction machinery strengthening after-sales service worldwide and transforming into a powerful corporate system with Annata 365.

Hitachi Construction Machinery Co., Ltd. (HCM) is a full-range manufacturer of construction machinery that brings extensive technological, product, marketing and service capabilities to the endless challenge of building construction machinery products that meet a rich and diverse range of needs.

For more than 60 years, HCM has been using its original research and advanced production technology to develop construction machinery products that are outstandingly safe, reliable, and durable.

Based on a market-oriented approach, HCM is meeting the needs of customers on a global scale, in Japan, the Americas, Europe, Africa, the Middle East, Asia and Oceania, and in the BRICs (Brazil, Russia, India and China) and other emerging markets.

The Company is also using its achievements and experience in construction machinery to take on challenges in other areas and provide new value, using ties within the HCM Group to create new business models.

In its quest to become the leading full-range manufacturer of construction machinery, HCM is continuing to take on the challenge of providing total solutions for all of its customers.

Situation

Since the 1990s, Hitachi Construction Machinery Co., Ltd. has been expanding production and sales overseas. Starting in the 2000s, it has also expanded its business performance in overseas markets.

Based on its medium-term management plan “Connect Together 2019,” the company began shifting its core business from new construction machinery sales to after-sales in an effort to transform Hitachi’s business structure and make it a more resilient company. During this time, the company was approaching a deadline for renewing its enterprise resource planning (ERP) solution.

In 2016, Hitachi Construction Machinery started researching the possibility of reaching “global system unification,” a goal that the company hadn’t been able to achieve in the past. As a result,

Hitachi Construction Machinery turned to cloud services as the best solution for its purposes. Leveraging Microsoft Dynamics 365 for Finance and Operations, which evolved from Dynamics AX as an on-premise ERP as a platform, Hitachi Construction Machinery’s Annata 365 solution satisfies the needs of the industry.

They characterized Annata 365 as “an ERP that fits the needs of the automobile and construction machinery industry.

Constrained by the worldwide tendency to suppress investment in and long-term use of construction machinery, the company’s sales model to date has concentrated overwhelmingly on new-construction machinery sales.

Shifting the focus to leasing and secondhand after-sales business, such as parts sales and recycling, has improved profitability and reduced resistance to change.

Implementation

As part of its initiative, Hitachi Construction Machinery is working on a unified ERP project that employs cloud services. By unifying its ERP, from collecting information at the head office in Japan to analyzing and using the data in near-real time, the company also aims to rationalize the transactions and inventory for construction machinery and parts among its overseas group companies.

Annata 365, which leverages Dynamics 365 for Finance and Operations as a platform, was selected as the best cloud service partner to meet this goal.

While the Dynamics 365/Annata 365 cloud solution showed great promise, Hitachi Construction Machinery planned to introduce an on-premise version initially, and then gradually switch to the cloud while it monitored the introduction and deployment in various areas. The cloud version wasn’t released in the first half of 2016 when Hitachi Construction Machinery first considered Dynamics. Instead, the company evaluated it then by using the on-premises Dynamics AX 2012 solution but quickly switched to D365 when the capabilities and savings became clear.

“It was clear that the cloud version was more suitable for speedy introduction and deployment at our bases around the world. At that time, though, no member of the Hitachi group had adopted a cloud service for ERP,” reflected Masahiro Ban, Deputy General Manager, IDMS Promotion Group, Global Solutions Promotion Department, IT Strategy Center, IT Promotion Headquarters. “There are many factors to consider when evaluating whether it’s possible to upload very important data to the cloud and maintain confidentiality, as well as whether there are any issues with long-term operations.” Takayuki Onaka, General Manager, Global Solution Promotion Department, IT Promotion Division, Corporate Management Division, Hitachi Construction Machinery.

Hitachi Construction Machinery chose to introduce Dynamics 365/Annata 365, the most advanced option at the time. Hitachi Construction Machinery’s introduction of Dynamics 365/Annata 365 is proceeding smoothly toward completion in 2022 and preparations for cloud-based systems other than ERP are now in place.

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