Project Title: Realization of Green Cloud Computing ~ Green EDI collaborating with Financial EDI ~ Project Leader Name: Youichiro Kojima Organization/Company: Kojima Press Industry Co.,Ltd., Japan Nominated by: Japan Association for Simplification of International Trade Procedures (JASTPRO) Abstract:
This Green Cloud Computing project has achieved the significant reduction of Cost and CO2 through the cloud computing while realizing EDI for SMEs, REACH and Financial settlement.

Executive Summary:
Our approach toward Green IT started with internal activities under the slogan of “CO2 reduction through Green IT” in 2005. Our group companies achieved significant results by integrating hardware and using common software. To produce further effects, these activities need to be practiced in society as a whole. For that purpose, we have developed “Green Cloud Computing,” a social action program focused on the automotive parts industry and small and medium-sized businesses outside the framework of a single company. With the spread of the Internet, web-based EDI (electronic data interchange) systems have been increasingly used as a means to exchange information between individual companies. In the automotive parts industry in among SMEs, where no industry-standard EDI system has been established, many different terminals and screens must be used, due to the lack of system integration between companies. In addition, not many small and medium-sized businesses have introduced computer systems, due to the significant costs involved. They mainly use paper documents, e-mail and fax and do not have EDI systems. Taking these facts into consideration, we have constructed a Green-EDI system (“SaaS-based Cross-industrial Standard EDI”) tailored for the automotive parts industry and small and medium-sized businesses.

1

Realization of green cloud computing Construction of a green-EDI system Ultimate Green IT
Features

Green cloud computing
Automotive parts industry Small and Environmental medium-sized information businesses XX

Cross-industrial Standard EDI system SaaS-based Cross-industrial Standard XML/EDI system

Small and medium-sized business

Small and medium-sized business

Small and medium-sized business

Small and medium-sized business

Small and medium-sized business

1) Cloud-based operation 2) Intended for small and medium-sized businesses 3) Easy to operate 4) Can also be used in other industries: Cross-industrial EDI specifications 5) Management of environmental information: • REACH regulations • Emissions trading 6) A plant for overseas deployment is in the works 7) Basic software is free of charge

• Promotion of the spread of the system in collaboration with the Japan Electronic Data Interchange Council (JEDIC). • Ultimate Green IT: individual companies do not own hardware and software

The EU currently leads the world in promoting environmental regulations. A system called REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) has been established there, to fundamentally review controlled chemicals and expand the range of control subjects to cover articles in addition to substances. A huge amount of effort is required to ensure an updated, comprehensive grasp of the compatibility of various chemicals with all laws and regulations both in and outside Japan. The SaaS-based Environmental Information Management System (for REACH and Other Regulations) was developed as a Green-EDI application to solve this problem. In addition, the Environmental Information Management System now has an emissions trading function. Individually-owned hardware systems for managing emissions trading are likely to emit significant amounts of CO2, resulting in an absurd situation. A system that manages environmental information must itself take Green IT into consideration. Finally, the system also allows financial EDI coordination (coordination of money flow, sales information flow and materials flow) as an additional Green-EDI application.

2

Financial EDI coordination based on a Green-EDI system
Company A
Order information Accounting information Environmental information Technical information Other information

GREEN-EDI

Company B
Order information

Common EDI system

Accounting information Environmental information Technical information Other information

External organization
Acceptance on Financial audits and other audits the same day Payment on the same day

Financial EDI coordination allows acceptance and payment on the same day
Conventionally, networks for exchanging account transfer information, order information, and specific information on movable properties have been available for money flow, sales information flow, and materials flow, respectively, in such a way that they are only accessible to the parties directly involved. There has been no mechanism that allows information sharing across different sectors or information coordination beyond system boundaries. This lack of coordination has limited the user’s ability to trace or reuse information, increased companies’ paperwork costs and closed the door to new business models using information. We clarified problems and needed changes in information coordination and worked on a feasible mechanism to resolve or satisfy them. We then designed a financial EDI coordination system based on our Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI” with the aim of improving cash management in sellers, improving the competitiveness of the whole supply chain, making paperwork in purchase and accounting departments more efficient, and resolving mistakes in calculation through synchronization of acceptance with payment.

3

Effects of the SaaS-based Cross-industrial Standard XML/EDI system • Greening effect*: Medium-sized businesses: CO2 reduction of about 2.43 t/year (per company) Small-sized businesses: CO2 reduction of about 0.97 t / year (per company) Effects of the SaaS-based Environmental Information Management System (for REACH and Other Regulations) • Effect on man-hours: Reduction in management man-hours: ▲ Reduction of about 85% or more (individual small and medium-sized businesses) Effect of financial EDI coordination based on a Green-EDI system • Effect on man-hours: Reduction in management man-hours: ▲ Reduction of about 70% or more

*Note: Equation for calculating GHG Emissions is based on the Manual for Quantitative Evaluation of the Co-Benefits Approach to Climate Change Projects by Ministry of Environment Global Environment Bureau http://www.env.go.jp/en/earth/cc/manual_qecba.pdf The latest version 3.5 (in Japanese only) http://www.env.go.jp/earth/ghg-santeikohyo/manual/chpt2.pdf

4

Project Content: • Project scope
Cloud computing to realize EDI for SMEs, REACH and Financial settlement in automotive parts industry.

• Goals and objectives
Our approach toward Green IT started with internal activities under the slogan of “CO2 reduction through Green IT” in 2005. Our group companies achieved significant results by integrating hardware and using common software. To produce further effects, these activities need to be practiced in society as a whole. For that purpose, we have developed “Green Cloud Computing,” a social action program focused on the automotive parts industry and small and medium-sized businesses outside the framework of a single company. Case 1: Intensive cooling of servers in the data center (a world-first) CO2 reduction: 12.5 t/year Case 2: Use of thin clients as CAD workstations (a world-first) CO2 reduction: 4.0 t/year Case 3: Integration of all group company hardware systems (number of servers reduced from 14 to 1) CO2 reduction: 149.0 t/year Case 4: Use of common software in all group companies (software types reduced from 14 to 1) CO2 reduction: 28.0 t/year Case 5: Reduction of loss through automatic design (design failure: 0) CO2 reduction: 16.5 t/year Case 6: Introduction of an automatic parts arrangement system using RFID (a Japan-first) CO2 reduction: 12.0 t/year Case 7: Introduction of a solar power generation system to cover the energy needs of the data center (all servers) (60 Kw) CO2 reduction: 21.0 t/year Through the integration of hardware (see Figure 1) and the use of common software in our group companies, we became aware of the CO2 reduction produced by centralization and the necessity of introducing an industry standard. We are convinced that these measures will produce the same effects in the automotive parts industry and small and medium-sized businesses.
5

Case 3 : Integration of group company hardware systems
Individual Kojima group company servers (14 units) Integrated Kojima group server (1 unit)

• Eliminates unnecessary computers • Eliminates unnecessary peripheral equipment • Eliminates unnecessary operation management work/staff

CO2 reduction: 149.0 t/year Operational cost reduction: approx. 800 million yen

Figure 1. Integration of Hardware in Our Group Companies As part of our “Ultimate Green IT” initiative, we introduced a solar power generation system to cover the energy needs of the data center (all servers) (see Figure 2 on the next page). However, it will take as long as 20 years to recover the cost of the solar power generation system. This estimate assumes that the current server scale is maintained, and we cannot introduce additional servers. To recover the cost earlier than this, the number of servers must be reduced. It thus became clear that our Ultimate Green IT will not be achieved through the introduction of a solar power generation system alone. Instead, “Green Cloud Computing,” where individual companies do not own hardware and software (see Figure 3) is seen as an effective solution.

6

Case 4: A solar power generation system was introduced as part of the “Ultimate Green IT” initiative to cover the energy needs of the data center (all servers).

• Target: data center (all servers) • Capacity: 60 kW • Installation location: rooftop of the welfare building • Type: CIS compound thin film • Period: Started on Feb. 12, 2010

CO2 reduction: 23.0 t/year

* Subsidized by the “New Energy Operator Support Project”
Figure 2. Introduction of a Solar Power Generation System to Cover the Energy Needs of the Data Center (All Servers)

Green Cloud Computing Individual companies do not own the hardware or software.
Green Cloud Computing

Integrated system

Private cloud

Public cloud

Integration of Kojima group hardware systems (reduced from 14 to 1)

Ultimate Green IT
Figure 3. Direction of Ultimate Green IT

7

• Challenges
1. Challenges for EDI in the automotive parts industry The automotive parts industry is built on a pyramid-like structure, with an automotive manufacturer on top (see Figure 4). Orders are placed and received between an automotive manufacture and its primary suppliers through an EDI system specific to that automotive manufacturer. However, transactions between primary and secondary suppliers are conducted through their own, different systems.

EDI in the automotive parts industry
Automotive manufacturer
Primary supplier

EDI system specific to the manufacturer Many primary suppliers are making the transition to their own web-EDI systems. Own web-EDI systems Secondary and tertiary suppliers mainly use paper documents, email and fax, and do not have EDI systems.

Large automotive parts manufacturer

Large automotive parts manufacturer

Large automotive parts manufacturer

Secondary supplier
Automotive parts manufacturer Automotive parts manufacturer Automotive parts manufacturer Automotive parts manufacturer

Tertiary supplier
Small and medium-sized partner company Small and medium-sized partner company Small and medium-sized partner company Small and medium-sized partner company Small and medium-sized partner company

Figure 4. Pyramid Structure of the Automotive Parts Industry Individual companies have increasingly moved to their own web-based EDI systems for receiving and placing orders. On the other hand, transactions between secondary and tertiary suppliers are conducted mainly through paper documents, e-mail and fax, and they do not generally have EDI systems. Individual companies’ own web-EDI systems are used by primary suppliers to place orders and secondary suppliers to receive orders. At first they may appear to be advanced web-based systems, but closer examination reveals that they are actually inefficient for secondary suppliers. Secondary suppliers access sites specified by primary suppliers using the Internet, where they must perform different processing operations on different screens with different passwords for different primary suppliers. In some cases, a single employee is required to navigate through the systems of 10 to 30 companies (see Figure 5). In many cases, individual web-EDI systems are designed to assist primary suppliers, and secondary suppliers are not allowed to store the data entered. There is clearly a lack of system coordination between companies.

8

Original web-EDI systems require the use of many different screens
Company A’s page Individual companies use their own systems, requiring the use of many different screens. Company B’s page

Company C’s page

There are as many as 300 separate screens for Toyota vehicle parts alone.

Different procedures are required for different screens accessed with different passwords.

Figure 5. The Many Different Screens that Must be Accessed Because Individual Companies Use Their Own Web-EDI Systems 2. Challenges for EDI in small and medium-sized businesses Many small and medium-sized businesses use handwritten slips (see Figure 6). This trend is seen not only in the automotive industry but in all other industries, too. Small and medium-sized businesses generally do not have EDI systems. Many small and medium-sized businesses with 5 to 10 employees cannot afford systems that cost several hundred thousand yen to several million yen, and as a consequence, do not use a computer-based system. Many small and medium-sized businesses do not belong to industry organizations, and fall behind industry standards.
Small and medium-sized businesses use handwritten slips

Small and medium-sized businesses in Japan are still using handwritten slips.

Figure 6. A Handwritten Slip used by Small business in Japan

9

• Strategies
1. Usage of a modular structure and an agile development method In order to realize Green Cloud Computing and contribute to Green IT, we constructed the Green-EDI system “Cross-industrial Standard XML/EDI” for small and medium-sized businesses. The new Green-EDI system has a modular structure that allows functions to be added to it (see Figure 7). This structure allows the system to be used not only in the automotive parts industry but also in other industries. The structure also makes it possible to add special ordering systems as modules in the automotive parts industry. In particular, the structure allows small and medium-sized businesses to introduce minimum functions as basic parts and additional functions as options.

Basic structure of the Green-EDI system “Cross-industrial Standard XML/EDI”
Option RFID Kanban module Option Instruction/ order module Option Additional function module Shared among small and medium-sized businesses Environmental information REACH regulations Emissions trading

Industry A

Automotive parts industry

Green-EDI platform “Cross-industrial Standard XML/EDI”

• Construction of a cross-industrial standard EDI platform that can be used in different industries. • Adoption of a modular structure for flexible operation.
Figure 7. Modular Structure of the Green-EDI Platform To construct this modular system, an agile development method was adopted. This method allows development with part of the specifications left undecided, in contrast with conventional waterfall development methods. Users want working programs rather than enormous collections of specifications. The basic part of the system was developed first, using an agile development method. In this development, a two-week cycle of definition of requirements, development and testing was repeated, and the validity of the specifications and designs was tested. Additional functions were developed as modules. The modular structure and agile

10

development method allowed this new EDI system to be constructed in a short period of time. 2. Cross-industrial standard system We constructed a cross-industrial standard EDI system that can be used by businesses in other industries and also by small and medium-sized businesses, rather than one designed for the automotive parts industry alone. Generally, industry standards are established by their respective industries. There have been many efforts to establish industry standards for EDI systems in the past. However, efforts to incorporate the requests of different companies have resulted in ballooning specifications, and little progress has been made in real standardization.

Raising the level of IT in Japan
METI
Japan Automobile Manufacturers Association, Inc. (JAMA) /Japan Auto Parts Industries Association (JAPIA)

Commerce and Information Policy Bureau Small and Medium Enterprise Agency

Small and medium-sized businesses

Toyota group

Automotive parts industry

Electronics industry

Other industries X X
JEDIC, etc.

Kojima group (Kojima Industrial Cooperative Association)

Green-EDI platform Cross-industrial Standard XML/EDI
Other small and medium-sized businesses: 2.4 million Japanese companies
IT Coordinators Association (about 10,000 coordinators) Japan Chamber of Commerce and Industry, etc.

Figure 8. General View of EDI Development Based on the Cross-industrial Standard EDI Platform Many small and medium-sized businesses, which do not belong to industry organizations, have fallen behind industry standards. Under these circumstances, we, as a representative of user companies, proposed, worked on and actually implemented standards for the industry and small and medium-sized businesses. We have also worked on standards for other industries as a member of the Japan Electronic Data Interchange Council(JEDIC)l. We aim to deploy the platform across 2.4 million small and medium-sized businesses in Japan and thereby raise the overall level of IT in the country (see Figure 8 on the previous page).

11

• Methodology
Construction of the Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI”

1. Structure of the Green-EDI system
The SaaS-based Cross-industrial Standard XML/EDI was constructed as part of the Green-EDI system. It supports SaaS and allows coordination between companies (see Figure 9).
Structure of the Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI”
Buyer Seller

SaaS
Mission-critical system Mission-critical system

Internet Medium-sized business
Coordination Coordination

Medium-sized business

Coordination between companies
Internet Small-sized business Internet Small-sized business

Using an external data center

Figure 9. Structure of the SaaS-based Cross-industrial Standard XML/EDI System This system can be introduced on the servers of individual companies, but a SaaS-based system was adopted to make it easier for small and medium-sized businesses to introduce it. The basic software can be used at an open price (or free of charge). However, charges for using the data center are required based on the amount of data used.
Realization of green cloud computing Construction of a green-EDI system Ultimate Green IT
Features

Green cloud computing
Automotive parts industry Small and Environmental medium-sized information businesses XX

Cross-industrial Standard EDI system SaaS-based Cross-industrial Standard XML/EDI system

Small and medium-sized business

Small and medium-sized business

Small and medium-sized business

Small and medium-sized business

Small and medium-sized business

1) Cloud-based operation 2) Intended for small and medium-sized businesses 3) Easy to operate 4) Can also be used in other industries: Cross-industrial EDI specifications 5) Management of environmental information: • REACH regulations • Emissions trading 6) A plant for overseas deployment is in the works 7) Basic software is free of charge

• Promotion of the spread of the system in collaboration with the Japan Electronic Data Interchange Council (JEDIC). • Ultimate Green IT: individual companies do not own hardware and software

Figure 10. Realization of Green Cloud Computing

12

Conventionally, companies have built their own EDI systems, which do not contribute directly to sales. A system that can be used across all industries is required. If each company sticks to their own system rather than use a cross-industrial standard system, the uniqueness of their systems carries the serious risk that they will lag behind other, competing companies. The SaaS-based Cross-industrial Standard XML/EDI system now allows small and medium-sized businesses to use the same functions that large businesses do, at low cost (see Figure 10). 2. Environmental information management using a Green-EDI system 1) SaaS-based Environmental Information Management System (for REACH and Other Regulations) We have promoted the expansion of an environmental management system based on the Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI,” to comply with REACH regulations. The EU currently leads the world in promoting environmental regulations. A system called REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) has been established there, to fundamentally review controlled chemicals and expand the range of control subjects to cover articles in addition to substances. A huge amount of effort is required to ensure an updated, comprehensive grasp of the compatibility of various chemicals with all laws and regulations both in and outside Japan. The SaaS-based Environmental Information Management System (for REACH and Other Regulations) was developed as a Green-EDI application to solve this problem (see Figure 11).

Green-EDI system “SaaS-based Environmental Information Management System (for REACH and other regulations)
Green Cloud Computing
Company A
Green-EDI

Company B

Green-EDI

Company C
Information storage

Information storage

Information storage
Coordination between companies

Information storage

Information storage
Coordination between companies

SaaS-based Environmental Information Management System (for REACH and Other Regulations)

Company A (In operation)

Company B (In operation)

Company C (In operation)

Figure 11. SaaS-based Environmental Information Management System (for REACH and Other Regulations)

13

2) SaaS-based Environmental Information Management (Emissions Trading) System In addition, the Environmental Information Management System now has an emissions trading function (see Figure 12). Individually-owned hardware systems for managing emissions trading are likely to emit significant amounts of CO2, resulting in an absurd situation. A system that manages environmental information must itself take Green IT into consideration. In the future, individual companies should never own their own hardware and software to manage environmental information. Green IT is an issue all companies that use computers must address, and it is time that all companies began to work together on a common solution.

Green-EDI system “SaaS-based Environmental Information Management (Emissions Trading) System”
Green Cloud Computing
Green-EDI
Emissions rights/ amounts Emissions rights
Emissions trading between companies

Green-EDI
Emissions rights/ amounts Emissions rights
Emissions trading between companies

Emissions rights/ amounts

SaaS-based Environmental Information Management (Emissions Trading) System

Small and mediumsized business

Small and mediumsized business

Small and mediumsized business

Figure 12. SaaS-based Environmental Information Management (Emissions Trading) System

• Re-engineering
1. Financial EDI coordination (coordination of money flow, sales information flow and materials flow) 1) Background Conventionally, networks for exchanging account transfer information, order information, and specific information on movable properties have been available for money flow, sales information flow and materials flow, respectively, in such a way that they are only accessible to the parties directly involved. There has been no mechanism that allows information sharing across different sectors or information coordination beyond system boundaries. This lack of coordination has limited the user’s ability to trace or reuse information, increased companies’ paperwork costs and closed the door to new business models using information.

14

2) System Last year, the Japan Institute for Promotion of Digital Economy (JIPDEC) set up the Study Committee on Information Coordination of Money Flow, Sales Information Flow and Materials Flow as part of efforts to study next-generation electronic information distribution platforms, and conducted feasibility studies on information coordination in money flow, sales information flow, and materials flow. The IT Coordinators Association (ITCA) also set up its Study Subcommittee on Financial EDI Coordination as part of efforts to study methods for data coordination within and between companies that contribute to improved productivity of small and medium-sized businesses, and conducted studies on issues to be addressed to realize financial EDI coordination. We, with cooperation from the Institute for Monetary and Economic Studies of the Bank of Japan, developed a system of financial EDI coordination based on the Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI.” Japan Institute for Promotion of Digital Economy (JIPDEC) IT Coordinators Association (ITCA) • Study Committee on Information Coordination in Money Flow, Sales Information Flow and Materials Flow WG on Money Flow and Sales Information Flow Networks WG on Financial EDI for Small and Medium-sized Businesses Institute for Monetary and Economic Studies, Bank of Japan Kojima Press Industry Co., Ltd.

3) Objectives To clarify problems and needed changes to coordination of money flow, sales information flow and materials flow, and build a feasible mechanism to resolve or satisfy them, using technologies such as RFID, positional information technologies, and cross-industrial standard EDI systems. (a) To streamline paperwork necessary for payment and settlement Resolve discrepancies between payment advice and amounts transferred, streamline the process of reconciling invoices according to payments made through bank transfers, and resolve mistakes in calculating accounts receivable and payable

15

(b) Accelerate the process of collecting accounts receivable Use RFID to synchronize shipment and acceptance information and invoice and payment information (c) Expand opportunities for financial institutes to lend money Promote movable property–collateral loans and loans based on order backlogs, based on visualization of transactions by EDI 4) Financial EDI coordination based on a Green-EDI system With the aim of to improving cash management in sellers, improving the competitiveness of the whole supply chain, making paperwork in purchase and accounting departments more efficient, and resolving mistakes in calculation through synchronization of acceptance with payment, we designed a financial EDI coordination system based on our Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI” (see Figure 13).

Financial EDI coordination based on a Green-EDI system
Company A
Order information Accounting information Environmental information Technical information Other information

GREEN-EDI

Company B
Order information

Common EDI system

Accounting information Environmental information Technical information Other information

External organization
Acceptance on Financial audits and other audits the same day Payment on the same day

Financial EDI coordination allows acceptance and payment on the same day

Figure 13. Financial EDI Coordination Based on a Green-EDI System Such coordination eliminates problems such as discrepancies between invoices and payments, unstable periods until payments are collected for products after they are delivered, and the overlooking of opportunities to lend money due to lack of information coordination (see Figure 14).

16

GREEN-EDI
PO
Agreement, Agreement, shipping/ shipping/ acceptance acceptance

Request for finance Reference

Buyer A (Originator/ Sender)

PO Finance

Bank  (Originator’s Bank)

Shipping/ Acceptance Change of Change of title title

Supplier B (Recipient)

AB Financing on inventory

Monitor/ Tracking (anytime as needed)

Invoicing

AB Financing on A/R Monitor/ Tracking (anytime as needed)

Payment Payment

Initiation

Notice

Notice

ISO 20022 pain.
Payment

ISO 20022 camt. ISO 20022 pacs.

Institute for Monetary and Economic Studies Bank of Japan

Figure 14. Business-to-Business Transactions and Financial EDI Coordination 5) Processing for acceptance using RFID RFID is used for processing for acceptance. Using RFID allows simultaneous acceptance of all products delivered, and acceptance and payment on the same day that products are delivered. Rewritable media are used rather than paper. (1) Overall View of the Rewritable RFID System (see Figure 15 on the next page) (2) Rewritable RFID Printer (see Figure 16 on the next page) (3) RFID (with a Unit Price) (see Figure 17 on the next page) (4) RFID Reader (see Figure 18 on the next page) (5) Display Screen (see Figure 19 on the next page) (6) Display Screen (see Figure 20 on the next page)

17

Bank  (Recipient’s Bank)

Rewritable RFID system
Buyer
Return the Kanban

27/38
Kanban with an IC tag

Seller

Special printer Internet

Send

Receive
EDI-ASP (common EDI system)

Place an order

Receive an order
Issue Kanbans/tickets

RFID antenna

Acceptance
RFID reader

Kanban: Can be rewritten 1,000 times

Delivery

Read the Kanban tag information Obtain delivery information/ perform acceptance processing

Figure 15. Overall View of the Rewritable RFID System

Rewritable RFID printer

Figure 16. Rewritable RFID Printer

18

Insert RFID (enter a unit price)

Figure 17. RFID (with Unit Price)
参考-2

RFID reader

Figure 18. RFID Reader
19

Display screen

Figure 19. Display Screen

Display screen

Figure 20. Display Screen 6) Evaluation of the system after implementation (1) Conventionally, invoices received by the end of a month were paid during the next month. The new system now allows acceptance and payment on the same day that products are delivered.

20

 Money flow is improved as money flows on a daily basis rather than on the conventional monthly basis. (2) Conventionally, invoices were paid on a monthly basis. Accordingly, discrepancies between invoice amounts and amounts paid were checked on a monthly basis, requiring more man-hours for investigation. The new system now allows such discrepancies to be checked on a daily basis, requiring fewer man-hours for investigation.  Time required for investigation is reduced as you only have to check the problems of the previous day rather than those of one month ago. (3) The Act against Delay in Payment of Subcontract Processes, Etc. to Subcontractors requires that unit prices be decided before orders are placed. The new system ensures that unit prices are set before orders are placed.  This system ensures that all companies, even those not subjected to the act, decide unit prices before orders are placed, a practice that agrees with common sense. (4) Conventionally, sellers could not determine which orders buyers paid by transfer. The 20-digit EDI information now allows them to determine that.  This time, only the current 20-digit EDI information was used, but more detailed information should be shared in the future. (5) This time, payments were made once a day (as a fee is required for each transfer), but the EDI system allows transfer on a per-acceptance basis. We have a plan to allow payments by automatic transfer in the future.  However, fully automatic transfer carries a risk and should involve consultation with the company’s accounting department. (1) Currently, Shinwa Kogyo pays invoices received by the end of each month at the end of the following month. The new system requires the accounting department to pay invoices by transfer on a daily basis rather than on the current monthly basis. It follows that payment work requires 22 times more man-hours than in the current system (for a month with 22 business days) (according to a managerial staff member in the accounting department).  Automatic journalization or other improvements may reduce the man-hours required or even eliminate the need for accounting work (according to a staff member in the accounting department). (2) With the current transfer fee system, the total amount of transfer fees increases 22 times (for a month with 22 business days).  For a transfer fee of 350 yen, transfer fees amount to 7,700 yen per month.

21

(3) Conventionally, changes in unit prices could be settled later in a certain period. However, the new system requires that unit price management by performed before the orders are placed.  Unit prices are decided before orders are placed, a practice that agrees with common sense.

• Standards (especially those developed by UN/CEFACT or other international standards organizations)
As a member company of the Japan Electronic Data Interchange Council (JEDIC), we have been involved in the construction of cross-industrial EDI systems based on UN/CEFACT Core Component Library (CCL). The Green-EDI system “SaaS-based Cross-industrial Standard XML/EDI” satisfies the required specifications. Financial EDI coordination, realized with cooperation from the Institute for Monetary and Economic Studies of the Bank of Japan, complies with ISO20022, an international standard on communications for financial services promoted by the working group of ISO/TC 68 in Japan (see Figure 21).

Figure 21. International Standards on Communications for Financial Services: ISO20022

22

• Economic benefits, achievement, and impacts CO2 reduction through Green IT • Greening effect: CO2 reduction of 243 t/year • Monetary equivalent of the effect: About 1.1 billion yen/year Effects of the SaaS-based Cross-industrial Standard XML/EDI system • Greening effect: Medium-sized businesses: CO2 reduction of about 2.43 t/year (per company) Small-sized businesses: CO2 reduction of about 0.97 t/year (per company) * If 2.4 million small and medium-sized businesses use the system: CO2 reduction of about 2.33 million t/year Effects of the SaaS-based Environmental Information Management System (for REACH and Other Regulations) • Effect on man-hours: Reduction in management man-hours: ▲ Reduction of about 85% or more (individual small and medium-sized businesses) • Greening effect: Medium-sized businesses: CO2 reduction of about 2.43 t/year (per company) Small-sized businesses: CO2 reduction of about 0.97 t/year (per company)

Effect of financial EDI coordination based on a Green-EDI system • Effect on man-hours: Reduction in management man-hours: ▲ Reduction of about 70% or more

23

• The next step
We have developed our activities to promote the reduction of CO2 through Green IT into initiatives involving society as a whole (see Figure 22).

Further development of Green IT
2005 2006 2007 2008 2009 2010 2011 2012

CO2 reduction through Green IT SaaS-based Cross-Industrial Standard XML/EDI system SaaS-based Environmental Information Management System (for REACH and Other Regulations) SaaS-based Environmental Information Management (Emission Trading) System Smart grid-based EDI system for information coordination

Expand internal activities into activities involving society as a whole.

Figure 22. Further Development of Green IT As an effort to realize the Ultimate Green IT, we introduced a solar power generation system to cover the energy needs of all servers. In time, we came to the conclusion that the best way to pursue our policy of Ultimate Green IT was the development of Green Cloud Computing, where individual companies do not own hardware and software. In order to realize the Ultimate Green IT, we will discontinue use of all servers for office work and make the transition to a cloud computing system. Following this transition, we will use the solar power generated for our servers to charge plug-in hybrid cars. In addition, we will manage power use information through Green Cloud Computing, without the use of in-company servers (see Figure 23 on the next page). Several of our group companies also have solar power generation systems. Our solar power generation system will be coordinated with their solar power generation systems. This will allow the selling and buying of solar power generated between the group companies. Financial EDI coordination based on the SaaS-based Cross-industrial Standard EDI system has already been put in place. In the future, a smart grid-based financial EDI coordination system will also be realized.

24

Smart grid for further development of “Ultimate Green IT”
Integrate all servers into a cloud system
Integrated system

Green Cloud Computing

Manage power use through a common EDI system

Green-EDI
Private cloud
Integration of Kojima group hardware systems (reduced from 14 to 1)

Public cloud

Power use Common EDI system


Solar power generation

Power use

Bank A

Plug-in hybrid cars

Financial EDI coordination

Following the integration of all servers into a cloud system, solar power generated for the servers could be used to charge plug-in hybrid cars.

Figure 23. Further Development of Green IT In planning to introduce a smart grid business model based on Green Cloud Computing for all of our group companies, we found that many other smart grid centers are operated in limited areas. As there is no smart grid business model, EDI systems for inter-business coordination have not been established. Without such EDI systems, individual companies would adopt their own, independent smart grid models. To further develop Green IT, we propose an EDI system for inter-business coordination based on the demonstration of a smart grid business model (see Figure 24).
Demonstration of a smart grid-based EDI system for information coordination
Demonstration in City A
Integrated system

Green Cloud Computing

Hydrogen station, etc.
Private cloud
Integration of Kojima group hardware systems (reduced from 14 to 1)



Public cloud

Solar power generation

Power use

Plug-in hybrid cars Solar power generation
Power use

Plug-in hybrid cars

Demonstration of a business model
Power use

Green-EDI
Power use Common EDI system

Smart center A

Wind power generation

Green cloud Financial EDI coordination Plug-in hybrid cars

Solar power generation

Bank A Smart home, plug-in hybrid cars, etc.

Smart grid center A

Figure 24. Demonstration of a Smart Grid-based EDI System for Information Coordination

25

• Resources (indicating the expense allocated to manpower, hardware, software, networking, etc.) SaaS-based Cross-industrial Standard XML /EDI system Development period: August 1, 2008 to June 30, 2009 Number of people involved in development: 15 project members (Leader: 1, specifications: 5, design: 3, development: 6) SaaS-based Environmental Information Management System (for REACH and Other Regulations) Development period: July 1, 2009 to June 30, 2010 Number of people involved in development: 9 project members (Leader: 1, specifications: 3, design: 3, development: 2) Financial EDI coordination based on a Green-EDI system Development period: July 1, 2010 to December 29, 2010 Number of people involved in development: 8 project members (Leader: 1, specifications: 2, design: 2, development: 3)

Total cost reduction: about 500 million yen

26