Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Materiality

Value Creation

Business Strategies

The Value Creation Process

Sustainability

Mid-term Management Plan 2024

Corporate Governance
Human Resources Strategies

Data15

Financial Strategies

CFO Message

The Story of Collaborative Value Creation with Stakeholders
The Hitachi Group is like a continually evolving tree that gathers diverse capabilities.
By nurturing this tree together with our stakeholders, we have brought about solutions that contribute to the resolution of social issues.
Moving forward, we will continue to engage in new collaborative value creation with our stakeholders by aiming for transformations with the times and continuing to take on new challenges.

Episode 1

Episode 2

The Optimise Prime Project, UK
─Towards a carbon-free society

Development of Microservices Solutions, ASEAN
─Supporting digital transformations of financial
industry and beyond

Episode 3

Hitachi Digital Solution for Retail/Logistics
─Transformations centered around thedistribution industry

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Materiality

Value Creation

The Value Creation Process

Episode 1ValueProvided

Co-creation
Partners

Sustainability

Mid-term Management Plan 2024

Corporate Governance
Human Resources Strategies

Data16

Financial Strategies

CFO Message

Episode 2

The Optimise Prime Project, UK
─Toward a carbon-free society

SocialIssue

Business Strategies

The United Kingdom has set the target of reducing CO2 emissions to effectively
zero by 2050. To reach this target, the decarbonization of the electric power
sector has to be almost completed by 2030 and 60% of new automobiles
have to be EVs in the UK. If Optimise Prime is implemented across the UK, itis estimated that a reduction of 2.7 Mt of CO2 is possible by 2030, which is aneffect corresponding to saving a total of 207 million pounds.

The Optimise Prime project, launched in January 2019, is an initiative torealize a carbon-free society by keeping down power prices while increasing
the spread of EVs and making efficient use of existing power distribution
networks. Hitachi is in charge of designing the solutions architecture andimplementing the IoT platform at the project’s core. We started gathering dataon EVs in 2019 and have already implemented demonstration experimentswith up to 3,000 vehicles over 12 months. We plan to submit the final reportin 2023, so that the data can be used by organizations, research institutions,and government agencies that want to shift to zero emissions through EVs.

UK Power Networks, Centrica, Royal Mail, Uber, Scottish & Southern
Electricity Networks, Novuna Vehicle Solutions

https://www.hitachi.com/rev/archive/2020/r2020_04/activities2/index.html

Development of Microservice Solutions, ASEAN
─Supporting digital transformations of financial industry and beyond

SocialIssue

Value
Provided

Co-creation
Partners

Application development that applies adaptable and flexible microservices, aswell as DevOps that links system development and operation, thus realizing
agile development that is flexible and speedy, is in great demand for theacceleration of DX. DX is proceeding rapidly in the financial industry, especiallyin the fast-growing ASEAN region. Hitachi will establish microservices
solutions and secure a core of digital talent for its development, to realize thetransformation of client systems to a more flexible architecture, for which an
open banking architecture and shorter time-to-market are increasingly needed.
In order to expand Lumada business globally, Hitachi will make fast-growing ASEAN its starting
point, and will develop common functions needed for the development of microservices byutilizing its know-how in application development for financial institutions. The developmentof this solution was enabled by knowing and incorporating functions required by financial
institutions, which were collected through the co-creation with a major bank in ASEAN.
Moreover, we engage in activities that aim to develop digital talent and guidelines that support
microservices development and are now aiming to establish a managed service that includes
a cloud environment and DevOps development infrastructure. Going forward, we will aim
to further enhance our delivery capabilities by establishing a dedicated development teamfor microservices (resource pooling), and scale out these solutions globally to clients in nonfinancial fields, whose needs for financial functions are increasingly growing.

A major bank in ASEAN

http://www.hitachi-ebworx.com/solutions-microservices.html

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Materiality

Value CreationBusiness Strategies

The Value Creation ProcessMid-term Management Plan 2024

SocialIssue

Episode 3

Hitachi Digital Solution for Retail/Logistics
─Transformations centered around the distribution industry

Sustainability

Value
Provided

Corporate Governance
Human Resources Strategies

Data17

Financial Strategies

CFO Message

Against a background of diversifying consumer needs, manpower shortages froma shrinking working age population, food loss issues, and so forth in the logistics
industry, there is a growing need for high-efficiency store management that utilizes
advanced digital technologies and that can instantly respond to changes indemand. Moreover, we are seeing issues with driver shortages and long working
hours in the delivery operations due to the spread of e-commerce and diversifying
delivery needs.
Hitachi is using digital technologies to resolve these challenges in the distribution
industry. We are contributing to more efficient, safer, and more secure operations
by automating order placements based on demand prediction, automatic delivery
planning, and ensuring safe driving management of drivers. Moreover, we areoptimizing storage in the food industry to counter food loss as well.
Order placement, storage management, and delivery planning have normallyrequired some time to perform based on the experience and know-how ofexpert workers. The Hitachi Digital Solution for Retail/AI Demand Forecast
Auto Replenishment Service makes advanced demand predictions forindividual stores and products by using AI and original algorithms, thereby
making suggestions for recommended order volumes and facilitating
automation of order placements. Hitachi Digital Solution for Logistics/Delivery
Optimization Service realized automated suggestions for highly efficientdelivery plans by generating data on all key conditions for delivery planningtasks and performing analyses that also incorporate the experience of expertworkers. SSCV*1-Safety on Hitachi Digital Solution for Logistics*2 contributes
to operation management, better driver safety, and workstyle reform throughAI analysis of the biometric and driving data of logistics drivers.
Hitachi is combining these solutions to provide value to all stakeholders
throughout the supply chains, including suppliers, wholesalers, logistics
operators, stores, and consumers, in the distribution industry.
*1 SSCV: Smart & Safety Connected Vehicle*2 Business developed through collaborative efforts between Hitachi Transport System, Ltd.,and Mitsubishi HC Capital Inc.

Co-creation
Partners

Mitsui & Co., Seiyu, Workman, Asahi Shokuhin, etc.