Novelis VP Bea Landa believes manufacturing is at a turning point in creating a sustainable circular industrial economy for the future.
“Using the Earth’s resources as wisely as possible and protecting the planet for future generations is the right thing to do.”
Bea Landa, Vice President, Metal Procurement & Recycling North America, Novelis
Sustainability is a competitive imperative for global aluminum producer Novelis. Formed in 2005 as a spin-off from Canadian mining and aluminum manufacturer Alcan and later acquired by India’s Hindalco Industries as part of its Aditya Birla Group, the Atlanta-based company has become a global leader in flat-rolled aluminum products and the world’s largest recycler of aluminum.
Following its own recent $2.8 bn acquisition of Aleris Corporation, Novelis now oversees 33 rolling and recycling plants in nine countries across North America, South America, Europe, and Asia, and recycles more than 70 billion used beverage cans alone every year.
Bea Landa is Vice President of Metal Procurement & Recycling for North America at Novelis and a recent Honoree of the Manufacturing Institute’s 2020 STEP Awards recognizing women of distinction in science, technology, and engineering.
In our latest Dialogue with a manufacturing industry thought leader, Landa talks to Manufacturing Leadership Council Executive Editor Paul Tate about the impact of 4.0 technologies and data analytics on achieving the company’s sustainability goals, how symbiotic recycling relationships now benefit both Novelis and its customers, and the importance of agility and collaboration to the future of manufacturing in an increasingly circular industrial economy.
Q: What excites you most about your role at Novelis?
A: There are three things that are really exciting for me. One is the opportunity to lead and shape the sustainability plan at Novelis. Our purpose as a company is shaping a sustainable world together. This is how we see our role in society and in partnership with our industry. Personally, when I take a job that includes recycling and I can help increase our ability to recycle more aluminum scrap and use less resources, it really excites me. Our customers are also now asking for partnerships to help reduce their carbon footprint and to further their own sustainability agendas. So, at Novelis, we’re very focused on being a leader and creating a positive impact on the planet. My role has a big influence on that.
The second exciting aspect is the ability to innovate. Manufacturing is an older and more conservative industry than many and we need to keep up with the times. So how do we leverage IT and new M4.0 technologies to help innovate, to help modernize, and to keep up in such a changing world?
The third is around people. Being able to excite and motivate people to work in manufacturing, to embrace these new technologies and to keep them motivated, that’s also an exciting opportunity for me.
“We deliberately decided to start our journey by focusing on using
advanced analytics to solve the more complex operational problems.”
Q: There’s much talk today about the future of manufacturing being increasingly digital, agile, and data driven. What’s your view of that trend?
A: There’s no doubt it’s coming and it’s going to be a game-changer. Just look at the past few months with COVID and the impact for manufacturers of having the data at our fingertips, of being able to process that data, and taking useful insights that have allowed us to be more agile and respond to disruption. That’s an example of one of the key changes that will continue to happen within the manufacturing industry. Now we need to learn how to best use the data, and the IT, and new digital technologies to be able to pivot and be the partner that our customers want us to be.
Q: How is Novelis approaching this digital transformation?
A: We are on our own Manufacturing 4.0 journey right now. We’re in the second year and it includes a large breadth of digital technologies: augmented reality, advanced robotics, 3D printing, advanced analytics, just to mention a few.
What we’ve focused on at Novelis, is that, although we gather a ton of data all the time, we really didn’t have the capabilities or the tools to sift through that data and extract the insights and act upon those insights. We deliberately decided to start our journey by focusing on using advanced analytics to solve the more complex operational problems. I think it was the right place to start because this is where we expect the largest value and where the level of centralization of data collection on our equipment is high. We’re really good at capturing and collecting data, but we needed the advanced analytics to gain actionable insights from that data.
Our overall approach is based on a few foundational elements. First, we launched a series of use case projects that are consistent with our manufacturing priorities, but which can’t be easily solved with conventional methods like Lean or Six Sigma. Secondly, we committed resources to these use cases to include process and domain expertise. This was key to make the data insights that came out of the analytics actionable in the real world. Third, we focused on building global data analytics platforms. These aggregated all of our islands of data into a single location.
Q: Is that analytical capability specifically aimed at manufacturing, or the supply chain, or procurement, or all of those?
A: It’s all of those. We focus more on the operational side because when we look at our main target areas for improvement, like productivity, efficiency, and lower costs, a lot of those come out of what we’re doing at the plants. For example, with our re-melts process we use a lot of prime metal material. By recycling more aluminum, we are able to lower our CO2 footprint. This is a challenge we have been facing for probably fifteen years. With new analytics tools, we’ve been able to make a significant impact, increasing our recycled inputs by eight percent. It’s a game-changer.
Q: What are the primary motivations behind your sustainability strategy? Why has it become so important to Novelis?
A: Using the Earth’s resources as wisely as possible and protecting the planet for future generations is the right thing to do. It’s part of our purpose and sustainability is at the core of everything we do. In terms of our agenda, I think we’re at an inflection point. In the early years we had been pushing a lot of things, like the idea of 100 percent recycled products. At that time there was only a mixed acceptance in the marketplace. But I think the marketplace and the global environment have changed significantly. What used to feel more like a push from Novelis, today feels much more like a market pull. There are a lot of customers now asking us to be even more aggressive.
So we’re currently in the middle of creating our new sustainability agenda for the future and we’re building this around some key principles: we care for the Earth, and we’re a low carbon leader; we run our facilities as cleanly as possible, continually improving our efficiencies; we hire a diverse, equitable, and inclusive workforce; we care for our communities, investing in causes that support our neighbors and our world; and we make long-term decisions that will enable our financial success, and which will give us the freedom to continue investing in bigger and bolder ways to improve our world.
We haven’t finalized future targets yet. We’re still working on them. But that’s the essence of it.
“Now we need to learn how to best use the data, and IT, and new technologies to be able to pivot and be the partner that our customers want us to be.”
Q: How is the Novelis sustainability strategy being put into practice with your customers?
A: In North America, we have three main value streams: auto, can, and specialty. Let me give an example of each. We’re very big in the auto space and one of the things we did in partnership with our OEM customers is to create what’s called a Closed Loop Agreement. Basically, all the scrap aluminum auto makers have left over after they’ve used what they need to stamp out panels and other components, is brought back into our plants for reuse. There’s a ton of interest from our customers to create this kind of sustainability loop. It’s a win-win. It helps OEMs reduce their carbon footprint and environmental impact and it takes care of an output that the OEMs don’t value as much. I think that’s been a great partnership.
On the can side, it now takes us just 60 days after a can has been used by a customer to completely recycle the material and for a freshly filled can to be back on a supermarket shelf. A big opportunity going forward is how to influence an increase in aluminum recycling in the U.S. Right now about 50 percent of cans end up in the landfills. We see that states with deposit legislation, however, experience higher recycling levels. So we want to support policies that enable education and action in the recycling space.
On the specialty side, a large HVAC customer is pushing for zero products going to the landfill. When it’s the end of life for their products, none of it is destined to go to landfill. We’re partnering with them to see how we can provide both the aluminum and a process by which, at the end of life, it’s very easy to tear down the product and separate the parts into re-useable metals, like the steel and the aluminum, from the other pieces.
So, there are a lot of partnerships with our customers that are driving our sustainability impact and every partnership, at least for each value stream, looks a little different.
Q: Apart from the environmental benefits, is there also a financial benefit to these kinds of circular economy recycling partnerships?
A: There is certainly a financial benefit. The energy that it costs to pretty much create new products from scratch using only raw materials – so we’re talking about all the mining, transportation, smelting, and other processes involved – is much greater than it costs to create the same amount using recycled material.
The goal of this is you can spread that benefit across the supply chain. So, when we take back the scrap from our OEM partners, for example, we get the value of the metal and they get a financial benefit. We already know the quality of the scrap because it was originally our metal. It’s then separated into the different alloys so we can pretty much plug it straight back into the system. It creates a lot of efficiency throughout. Data analytics and new technologies are becoming an essential part of that process.
“It’s going to take a very multidimensional plan to achieve some of the new sustainability goals and targets.”
Q: In what ways are new 4.0 technologies and approaches making a difference to your circular economy strategy?
A: With the advanced analytics platform, for example, we’ve been able to make quite a bit of progress towards our sustainability goals. I’ll give you two examples. One is how data analytics has helped us to increase our usage of recycled aluminum. Our Oswego, NY facility, for example, is one of our biggest and the main production plant for the auto sector. The auto alloys we need to produce have lower recycled inputs, which is what we want to increase from a sustainability standpoint. The way we’ve been starting to use advanced analytics is by combining a lot of data groups that we weren’t able to combine before in a dynamic way. It looks at how much of our own manufacturing scrap we have, our customer order book, our casting inventory, and the chemistry requirements to increase the recycled content of our aluminum. Now, with the data analytics tool, we’ve already increased three percent of our recycled content, which is a big deal. Another example is how analytics have helped us to reduce the natural gas consumption in one of the smelters in a plant in Korea, which has now dropped by about nine percent.
These specific use cases show how analytics can help us better understand the operation of a particular asset and make significant improvements. It’s very targeted. These are very measurable examples and go directly towards our sustainability agenda by reducing our CO2 footprint. I think there’s a lot of opportunity out there to expand these kinds of improvements.
And that’s just from a purely machine and resource standpoint. On the people side, we are helping our employees learn these new advanced analytics skills. We found that there are people in the company that are really good with statistics, that are analytically minded and data-driven, and they’re able to learn the techniques and add value to the company right away. That has also helped employee retention and productivity.
Q: Does sharing some of that analytical data help in the way you manage and optimize your supply and customer networks?
A: We’ve been working with some of our can customers where we share some of the data about our production process and then basically see what the results are in the customer’s bottling plant. For example, if there is a sudden quality issue at one of the bottlers, we can trace back the production process data. We actually began to find correlations that we probably wouldn’t see using just the normal Excel tools or traditional plant software. We figured out that there were correlations with certain variables that we weren’t even looking into before, that could predict when there was going to be perhaps a problem for a can customer. That’s one of the very successful partnerships we’ve had with can customers to improve the quality so we know, when we see those variables getting to certain points, that it is probably a coil that we do not want to send to a customer because that would end up leading to a quality issue. That’s on the customer side. With more data and more predictive data like that, we’re just getting better as a supply chain. It makes the use of materials more efficient along the chain and reduces energy and other overheads, both for us as a producer and for our customers.
In terms of our suppliers themselves, I think this is more of an area of opportunity. We’ve shared our sustainability vision. We’ve shared what we care about and they know it’s important. But we still haven’t gotten to the point where this is mandatory and that’s probably something we’ll be working on in the future.
“Embracing change is going to be both the biggest challenge and the biggest opportunity for the future of the manufacturing industry.”
Q: What will be required to get to the next level for this kind of circular economy business model?
A: It’s going to take a very multidimensional plan to achieve some of the new sustainability goals and targets. One aspect will be capex investment. For example, right now, we’re maxed out in our re-melt and recycling facilities. For us to get to additional recycled content in our inputs, we will need to make more investments in capture, re-melt, and recycling facilities. I think the other point is, how do we organize teams to maximize our sustainability processes in the future? There are a lot of decisions that have to align so that we can achieve our goals.
Q: Looking forward, what would you highlight as the greatest business challenges and opportunities for the manufacturing industry over the next 5 years?
A: As an industry, I think we not only need to learn how to embrace change, we need to make it one of our competitive advantages. That’s not only from a technology and IT standpoint, but also about how we become better partners for our customers and that requires agility. It’s not just about producing the right product at the right time, but also about understanding how the markets are changing and therefore, being able to adapt and become a more effective solutions partner for our customers. In terms of people and diversity, I think it’s also important for us to understand how we can pivot to create a more inclusive environment for diverse employees. I think embracing change is going to be both the biggest challenge and the biggest opportunity for the future of the industry.
Q: What kinds of skills do you think the next generation of manufacturing leaders will need in that new era?
A: The main one is collaboration. That means understanding collaboration as a supply chain, with our partners, with our suppliers, and by using data across boundaries so we can get even more insight, more flexibility, and more agility. Next is innovation, being able to be creative and produce something of value to the changing marketplace, not only across our supply chain specifically, but when you look at the OEMs and what the aluminum industry provides to companies like auto manufacturers, it’s much better when we are working together to innovate as a combined front. We are looking at how advanced technologies can help and how we can work together on product development as an industry, versus doing this as individual companies. That’s just one example of how collaboration across our industry is even more important these days.
Q: Finally, if you had to focus on one thing as a watchword for the future of manufacturing, what would that be?
A: For me it’s agility. Agility in many dimensions, from a partnership standpoint, in IT and digital processes, around sustainability, and with people. How can we use our agility to modernize manufacturing, to create better products in better ways, and become a more attractive industry so we can retain and attract more talented people for the future? M
Fact File: Novelis
HQ: Atlanta, GA
Business Sector: Metals, Manufacturing & Recycling
Revenues: $11.1bn (2019)
Net Income: $63m (2019)
Employees: 11,000 (2019) [15,000 post Aleris acquisition]Presence: North America, South America, Europe, Asia
Production: 33 Production Sites in 9 Countries [post acquisition]
Beatriz (Bea) Landa
Title: Vice President, Metal Procurement & Recycling, North America, Novelis
Education: Bachelor and Masters’ degrees, business & law, Universidad Pontificia de Comillas, Madrid, Spain; Masters, taxation, CEF Business School, Madrid, Spain; MBA, Wharton School, University of Pennsylvania.
Languages: English, Spanish, French, German, Portuguese
Previous Roles Include:
Plant Manager, Greensboro, GA, Novelis
Vice President, GM Specialties Value Stream NA, Novelis
Director, Strategy & Development NA, Novelis
Senior Manager, Corporate Strategy, Novelis
Senior Associate, McKinsey & Co
Summer Associate, Nike Inc.
Summer Associate, McKinsey & Co.
Associate Lawyer, Baker &McKenzie
Summer Associate, Carrefour Foundation
Semi-Professional Soccer Player, Madrid, Spain
Other Industry Roles and Awards:
2020 STEP Awards Honoree, Manufacturing Institute/NAM
Member, Aluminum Association Sustainability Council
Member, Atlanta Women’s Foundation
Supporter, Girl Effect (Nike)
Founding Member, Women in Novelis (WiN)
Ontological Life Coach