Onocom: Japan’s digital construction pioneer

We are a far cry from the construction boom associated with the 1964 Tokyo Olympics with most experts today describing Japan’s Construction sector as matured. On one hand aging infrastructure has increased the need for maintenance and repair works, while on the other hand Japan’s decreasing and aging population has dramatically cut the number of new projects.
What is your analysis of the current state of the Japanese construction sector, and how do you foresee its evolution in the years to come?

To be honest Japan’s construction sector is not in good shape. As Japan’s population declines the situation continues to worsen. The demand for new projects is decreasing. The shrinking population makes it undesirable to construct new buildings, and a decrease in demand leads to a decrease in clients. As such, you don’t see many new opportunities in the market. 

However, with that being said, the Onocom Group is different. We will soon celebrate our 100th anniversary. We have a lot of experience in the industry and continue to succeed in attracting new customers and finding new talent. We have implemented and made full use of the latest DX (Digital Transformation) technologies. Through innovation and forward-thinking we have created change in the construction industry.

Construction and infrastructure related companies here in Japan can be divided into two categories: those utilizing the newest technologies and digitalization (i.e. DX), and those using old-fashioned methods of construction.

Each company approaches construction differently. Companies that utilize DX in their projects have the added benefit of data management. They can continuously run and sustain their projects based on collected data after construction is completed. On the other hand, companies which are doing things the old-fashioned way simply complete their projects without any kind of after-sales support.

The Ministry of Land, Infrastructure, Transport and Tourism has created a DX initiative called PLATEAU. This is a 3D scanning project for the entire Tokyo area that aims to convert it into digital data, from city level to building level.

Onocom not only provides data for the 3D recreation of buildings, but we also upload data into the cloud so people can access it easily. We call it the Digital Twin. In the past, our company was only responsible for data submission but now we are going the extra mile utilizing digital sensors. After we install these sensors in real buildings, we can compare digitalized versions of the buildings to each other. We can perform usage analysis and propose detailed plans for the future.

As you’ve said, the construction sector in Japan has been quite slow to adapt and use DX technologies. As a company that heavily utilizes DX, how do you think it will affect the construction field moving forward?

First is visualization. In conventional construction, it is impossible to predict how a completed building will turn out. Without building the structure there is no way of truly knowing. However, by using DX, it has allowed us to easily visualize the complete architectural design.

Everything that was done before DX was on paper with blueprint designs. When looking at them, you didn’t really understand the dimensions of the space. It’s very difficult to conceptualize the space in a room before it’s constructed. You cannot see how far a person is standing from you, whether the room is wide enough, or understand the length of partitions or the height of the building - but all of this can be recreated using DX software.

DX also simplifies management, reduces costs, and influences how much of the actual after-sales work can be done by a construction company, as all the data is kept in the cloud. It can also increase efficiency by streamlining the approach to renovating existing and new buildings. And it is changing the extent to which maintenance and renovation is impacting the construction industry.

Since 2015 you have been using VR for presentations. You’ve also proposed to customers the use of digitalization to aide in both the construction of buildings as well as the layout of office furniture and factory facilities. Looking ahead, how do you plan to extend your system further? What new applications do you foresee for use at construction sites?

We adopted VR early on and brought it to the construction industry. VR helps us share construction information with our customers. It allows us to share images of pre-construction and helps us make decisions for when construction is completed.

The possibilities are endless for DX at construction sites. We are now working with Smart Glass. We have started verification and a plan to launch it this year. It’s currently being utilized to improve efficiency at sites and to communicate in real time with on-site staff.

The construction industry in Japan is one of the slowest to adopt digital technologies. Why do you think this is? And why is Onocom different?

My perspective comes from my academic background in Arts, using imagination not only to create objects but also to come up with new ideas or to integrate new technology into our existing construction methods. A concept that is much easier to implement in a private company like ours than it is in a large company.

I always have my mind fixed on what things may look like in the future. My father was president of Onocom when I was running a design company in the UK. Unfortunately, he had some health issues so I had to come back to Japan to take over the business. I didn't want to give up my career as a designer in the UK because designing and creating something new was my passion. However my friend said something that gave me the push I needed. He said, "Why don't you redesign Onocom?” That changed my perspective and I started to think how to restructure and reshape Onocom without the boundaries of a conventional construction company.

Japan is a country of customs and traditions therefore it was difficult make changes initially. Thanks to the help and support of my amazing staff, I could gradually realize the 'company design' I envisioned. Their designs and skills are in line with my vision, making my dream come true. I really appreciate being blessed with so many incredible co-workers who can make this happen. I truly believe they are the reason we have been much faster adopting new technologies than other companies in the industry.

Onocom has a specialized IT lab unlike most construction companies. It used to be a small department but these past years, it has gradually grown into a team of passionate coworkers that now takes up half a floor in our headquarters, showing how important DX is to the industry. This team, together with our architects, site workers and support team doesn't seem to be slowing down any time soon. I believe that their passion and ambision has quickly transformed Onocom into a DX-focused construction company, keeping up with the demands of the rapidly evolving construction industry.

Onocom has a specialized IT lab unlike most construction companies. It used to be a small department but these past years, it has gradually grown into a team of passionate coworkers that now takes up half a floor in our headquarters, showing how important DX is to the industry. This team, together with our architects, site workers and support team doesn't seem to be slowing down any time soon. I believe that their passion and ambision has quickly transformed Onocom into a DX-focused construction company, keeping up with the demands of the rapidly evolving construction industry.

By 2035 one in three Japanese will be 65 or older. Currently, one in four construction workers in Japan are 65 or older. This creates two major problems. First is a labour crisis. There are fewer young workers to replace seasoned veterans and to pass their knowledge onto. The second is a shrinking domestic market. There are fewer companies, clients, and new projects. What is your strategy for overcoming the problems associated with Japan’s demographic decline?

When I go to our construction sites, I see workers who have already passed their puberty long ago. Many of them are about the age of my grandfather and may not work with us in ten years. Based on that fact, we are preparing for a future shortage of craftsmen by preserving their craftsmanship in a video archive. At the same time, we have set up an in-house "Craftsman Group" to support the decreasing number of skilled workers. Despite all these efforts, we anticipate that the lack of workers in Japan will cause labor shortages and have a serious impact on all industries. To resolve this problem, we have started to teach Japanese and various craft skills to children from "SOS Children's Village" as a part of our CSR project in the Philippines. Our pilot program finished just before the pandemic but even in face of all difficulties we could still welcome some of our skilled graduates, who now work as an important part of our company.

The declining construction industry has a great deal of difficulty securing and retaining employees. There are some people who want to work at constructions but it's still unpopular because of the analog ways of the industry. However, many local and foreign workers are interested in the new type of construction methods we implement at Onocom. They want to part from conventional construction methods and make constructions faster at a lower cost by digitalizing their work, cooperating with our BIM and VR teams in the Philippines.

Section of 3D BIM model

VR meeting in Onocom’s Lab

Classroom at Onocco in the Philippines

Asahi Intecc Co., Ltd.’s global headquarters and R&D center

OSG Corporation’s NEO Shinshiro Factory

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Onocom is part of a diverse group of companies. Carrot Co. does land leasing and property brokerage. Orad Co. is an architectural design firm. Can you elaborate on the structure of the Onocom group? Can you explain the synergies you are able to create between the different members, as well as the benefits those synergies bring your clients?

Onocom has branches in Tokyo, Nagoya, Osaka, Thailand, the Philippines and the UK. As well as group companies that specialize in various fields such as real estate, design, construction, material leasing, art and environment. This is so we can provide an all-in-one service that allows us to create buildings from the ground up with each company synergizing with the others.
 For example, we recently completed the construction of a factory for a global tool maker. We received high praise from our customer for the value added by our group company Factory Art Scape Co., Ltd. designing and producing outdoor sculptures that embody the concept and enhance the architecture.

Another example is our group company REESOP. They installed a "bio-garbage disposal machine" in the head office building of a global medical equipment manufacturer. It is now a “garbage-free building" that contributes to the company’s ESGs and SDGs.

Onocom conducts business with more than 30 companies listed in the First Section of the Tokyo Stock Exchange. We have gained a lot of experience and knowledge by working with customers in various industries mading Onocom a strong and competitive company. We are able to accept proposals that cross industries, such as building a factory at low cost and with a shortened construction period for a retail store.

What initiatives you are developing to contribute to a carbon-neutral society and lower your carbon footprint?

"Super General Contractors" - major construction companies - have not yet reached a level where they can reduce their carbon footprint through a more holistic approach. Onocom however offers solutions to our customers through our group company REESOP. They have achieved dramatic results with biomass and have greatly reduced CO2 emissions.

Can you tell us what role collaboration and co-creation play in your business model, and are you currently looking for international or new domestic partners?

We work directly with our customers as architectural advisors. However, with our limited number of staff it is difficult to handle every problem that may occur during construction so we do not take on building projects by ourselves. On our customers' behalf, we select partner companies that can uphold Onocom’s standards and we act as a coordinator. Currently, we are developing new partnerships nationwide so that we can carry out new joint construction projects anywhere in Japan. Furthermore, as we want to be a global architectural hub that can provide an all-in-one service on high standards, we are forming partnerships with local companies abroad and with Japanese construction companies that have overseas branches so that we can respond to customer requests all over the world.

Looking toward the future, are there any specific regions or markets that you believe will be key as part of your international expansion strategy?

Quite a few Japanese manufacturing companies are expanding their business to Southeast Asian countries such as Thailand, the Philippines, and Vietnam. We have set up branches in the Philippines and Thailand ourselves since we want to provide the same quality, all-in-one service as we do in Japan and meet the needs of our customers. Due to Japan’s aging and declining population the need to set up branches in Asia is inevitable.

I’ll also share with you why we expanded our business to the UK. Architecture has two important elements: technology and design. Generally speaking, the United States is the birthplace of new technology and Europe is the birthplace of design. The UK is somewhere in the middle. In the UK there is a balance between functionality and design. I believe we can stay abreast of global trends by setting up an office there. We want to quickly adopt the latest technology and design and share them with our customers.

When it comes to your midterm strategy, what are some key targets that you would like to achieve?

There are several steps that we need to implement in our midterm strategy plan. One is dealing with the shrinking population and improving work efficiency through DX and VR. We would also like to acquire talent by emphasizing and strengthening our presence in the DX sector. Next is the "Digital Twin". I believe, a real and a digitalized building constructed at the same time is the best method these days. We can do this by collecting data from the sensors installed at the actual construction site and then perform simulations using that data. We can then come up with further ideas, maintenance solutions and even make proposals for future projects

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If it were your last day as president of Onocom, what legacy would you like to leave behind for the next generation of employees and executives?

Our corporate message is "Nakereba Tsukuru" (if it doesn’t exist, we'll make it). We integrate this message into our work and build with joy and enthusiasm. We will always be there for our customers, making their dreams come true by creating the building they envisioned to help maximizing their profits. To this end, we make the best proposals we can by making full use of the latest technology and the skills we’ve cultivated over nearly 100 years. This is the main message that I would like to deliver to future generations.

The founder of Onocom previously managed the Imperial Palace in Tokyo and was responsible for maintaining the building. He said, "It is important to work with pride so that our customers who live in the buildings you build will be as happy as possible." Our founder's philosophy has been translated into several languages and shared with all of our employees, even at our overseas branches.
 

Onocom will stay competitive even under difficult circumstances. This is because we continue to evolve with a well-balanced combination of our founder’s philosophy, 100 years of experience, and by making full use of the latest technology. We do all this for one reason; to give life to our customer’s dreams. Onocom Group will continue to take on the challenge of creating the best architecture inspired by human values.