Making Natural Gas Smart

The Opportunity

A completely new digital concept for the opening of the Hamamatsu Sales Office

On October 8, 2020, NIPPON Gas Co., LTD.(NICIGAS), an integrated energy concern offering natural gas and electrical services, opened a new, digitalized Sales Office in the city of Hamamatsu.

Though it primarily operates in the Tokyo metropolitan area, recent years have seen Nicigas gradually expanding into western areas in Shizuoka Prefecture, with a growing customer base seeing the company open offices everywhere from Mishima to Fuji, Shizuoka, and Yaizu. 

However, when expanding further west from the Yaizu sales office, regional head Takeshi Suzuki focused his attention on Hamamatsu, the most populous city in Shizuoka. Hamamatsu is about 60 km (37 miles) away from Yaizu, so most companies would likely choose to set up an office in a regional commercial center like Kakegawa. 

Yet “about 200,000 of the 340,000 households in Hamamatsu use propane gas, which is about five times the market in Kakegawa,” said Suzuki. “Furthermore, when I actually visited Hamamatsu City, I felt it was very attractive as a market. That is why I wanted to fly to Hamamatsu City at once.”

Until now, the company has been expanding its sales area and opening new sales offices to help accommodate those new customers. With the opening of a new sales office in Hamamatsu, however,  the company decided to start completely from scratch in terms of customer development. To help meet this challenge, Suzuki and his team have introduced a completely new business model at the Hamamatsu Sales Office.

“With Space Hotaru, we will be able to make a big change from monthly data-based forecasting to hourly data-based real-time delivery.”

Takeshi Suzuki NIPPON Gas, Co.

The Solution

Three Lessening Measures That greatly reduce costs

With the opening of the Hamamatsu office, Suzuki’s team has introduced a Network Control Unit, or NCU system, that networks gas meters and manages gas usage and abnormalities. Dubbed the “Space Hotaru” an NCU that enables the online collection of data from gas meters was developed alongside Soracom. These devices help eliminate the need for monthly in-person visits to read customers’ meters, which, in turn, helps to reduce personnel costs and improve productivity.

Unlike more traditional gas options, where customers tend to be concentrated in the same area, propane gas customers tend to be scattered throughout a city. As such, “it is inefficient to go door-to-door to remote customers every month to read meters and collect money,” said Suzuki. “We wondered if we could change that conventional business model from ground zero, using the power of IoT and apps.” 

To this end, the Hamamatsu Sales Office has taken on three major “lessening” initiatives.

  1. Going Entirely Cashless

All payments for gas bills and equipment purchases are now handled by direct debit or credit card payment. For internal expense reimbursement, a remittance application called Pring was used to eliminate the need for petty cash and achieve a completely cashless environment.

This has reduced money-related costs, such as receipts and payment slips, as well as administrative tasks for the attending employee and office staff. It also reduces the inherent risks associated with handling cash.

  1. Going Entirely Paperless

By consolidating the meter reading data obtained by the space fireflies and gas usage rates into a dedicated application, paper meter reading slips have been eliminated. With Space Hotaru the guideline values become digital data onsite and are visualized through the My Nicigas app. 

This streamlines the process of checking gas meters at customers’ homes, as issuing and then posting meter reading slips through the use of Space Hotaru and the app creates a paperless operation that reduces administrative costs.

  1. Going Entirely Clerk-less

By eliminating paper and cash handling tasks and digitalizing all customer information and user data, clerks at the three sales offices (Shizuoka, Yaizu, and Hamamatsu) can now perform clerical and administrative tasks remotely. All data is managed in the cloud, and individual chat-based collaboration allows for stress-free communication over long distances.

By eliminating the need for clerical and meter reading personnel, Nicigas was able to reduce office work to one-fourth of earlier levels – allowing more time for sales, and increasing the speed at which sales offices can grow. Whereas it may have taken two to four years to open a sales office in the past, these new procedures saw the Hamamatsu office spring up within one and a half years of planning.

The Hamamatsu Sales Office was started as a prototype for digitalization, but “it has gone surprisingly well,” says Suzuki. 

Why Soracom

A Connectivity Solution That Scales

The Space Hotaru represents a grand collaboration between Nicigas, product developer Unabiz, Kyocera Communications, and Soracom. By utilizing Soracom’s connectivity suite, Unabiz’s hardware, and the 0G network operated by Kyocera, Nicigas has built a scalable solution that reaches tens of thousands of homes throughout one of the most densely populated regions of the world.

Soracom Co-founder and CEO Ken Tamagawa believe the collaboration between these three organizations is just a small glimpse of all that such partnerships can mean for the IoT.

“Nicigas represents a prime example of the benefits that a smart IoT connectivity platform brings to large-scale deployments,” said Tamagawa. “The combination of IoT technology and cloud capability lets businesses connect devices quickly, affordably, and securely anywhere in the world, while increasing efficiency, sustainability, and customer satisfaction.”

Connecting so many devices is no easy feat, but with the powerful and resilient connectivity afforded by Soaracom’s AIr service, the Space Hotaru is proving to be a game-changer in the modern utilities landscape.

The Outcome

A Smart Solution for the Modern Workforce

Sales staff assigned to the Hamamatsu Sales Office have become so accustomed to a paperless workflow that some have asked, “What was all that work before?”  according to Suzuki.

“By eliminating the troublesome clerical work, we can concentrate on the important things, such as increasing the number of visits to the customer and the time spent building a relationship with the customer.” Employees who used to work as clerks are now able to perform customer support duties such as greeting and visiting property owners, which has redefined the company’s business and work style.

Customers can open the My NICIGAS app to view their usage history and payment information at any time, which means they no longer need paper meter readings. The app also allows Nicigas to directly engage customers with digital flyers for new appliances and services. “We no longer have to take flyers to customers, nor do we have to print them, so our costs have been cut in half or less.”

Space Hotaru has even helped optimize gas cylinder delivery. “In the past, meter readings happened once a month, but now it is possible to acquire meter data every hour of the day so we can track the remaining gas cylinder volume in real-time,” said Suzuki. “We had previously been able to predict the amount of gas remaining based on temperature and usage from the previous period, but if, for example, gas consumption suddenly increased due to a visitor, we would be far off from the delivery forecast.” 

“With Space Hotaru, we will be able to make a big change from monthly data-based forecasting to hourly data-based real-time delivery.”

By tracking the remaining amount of gas, it is possible to change from half-replacement, which leaves one spare cylinder, to full-replacement, which replaces two cylinders at once and reduces delivery rotation speed by 40% to 50%. 

“Following the success of the Hamamatsu Sales Office, the office in Yaizu is now also moving forward with digitalization, and the Yaizu Sales Office’s clerical work can already be handled together by the Shizuoka Sales Office. If we can prove the success of digitalization here, we can expand it to all other offices,” Suzuki said.

In the future, “We would like to horizontally deploy the same system as the Hamamatsu Sales Office, not only to our own sales offices but also to other gas companies and companies outside our industry,” Suzuki said. 

“The keyword for the future is ‘co-creation,’ not competition. In today’s rapidly changing world, paperless operations and cost reduction are essential challenges for all companies. We hope that  Space Hotaru and our cashless and paperless systems will be utilized by companies all over Japan,” he said.