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Henkel Wins Mexico’s First Lighthouse Factory Status

Middle market executives are increasingly shifting from a linear to a circular economy mindset because it offers a systemic approach to economic development that benefits business, overall society, and the environment. Advanced 4.0 technologies can help them get there.   


Company Fact File

Name: Henkel
Sector: Chemicals & Consumer Goods
HQ location: Düsseldorf, Germany
Revenues: $21.8 billion (2020)
Employees: 53,000 Employees Worldwide
Web url: Henkel-northamerica.com

Henkel’s Laundry & Home Care division recently hit a M4.0 trifecta when an independent expert panel awarded its production facility in Toluca, Mexico, with an Advanced 4th Industrial Revolution Lighthouse designation from the World Economic Forum and McKinsey & Company. The company’s facilities in Düsseldorf, Germany, and Montornès del Vallès, Spain, had already achieved Lighthouse status in recognition of their leadership in using Manufacturing 4.0 technologies to transform their factories, value chains, and business models.

Henkel’s Toluca facility, the first in Mexico to achieve WEF Lighthouse status, is the company’s latest demonstration of how digitization can drive efficiency and sustainability in manufacturing, key goals for Henkel worldwide.

“Henkel wants to become a climate-positive company by 2040 and our Laundry & Home Care sites worldwide are making a significant contribution to this ambitious goal,” says Dr. Dirk Holbach, Chief Supply Chain Officer at Henkel Laundry & Home Care. “This third recognition by the World Economic Forum shows that we are pioneers in implementing advanced digital technologies in factories worldwide. It is a fantastic example of best practice in great teamwork and excellent collaboration.”

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Being a member of the Global Lighthouse Network is not just an honor for Henkel and the Laundry & Home Care team, it also helps to set the stage for more innovation, he says. “The network is a platform to develop and scale up innovations. Additionally, it creates opportunities for cross-company learning and collaboration in order to set new benchmarks for the global manufacturing community.”

Business Context:

Since Fritz Henkel started the company in 1876 making a laundry detergent based on sodium silicate, Henkel has grown into a global leader in its three business units: Adhesive Technologies, Laundry & Home Care; and Beauty Care. In 2020, Henkel reported sales of more than $21 billion (€19 billion) and operating profits of $2.95 billion (€2.6 billion). The hallmarks of Henkel’s corporate culture, exemplified across its 53,000 global workforce of passionate and highly diverse teams by a unified common purpose and shared values — including being a recognized leader in sustainability.

The Henkel Laundry & Home Care business unit’s product portfolio includes well-known laundry brands such as Snuggle, All and Purex, as well as other laundry detergents, laundry additives, hard surface cleaners, toilet and air care products, and insect control products.

A Standard Platform

 Henkel Laundry and Home Care Supply Chain has always taken great care to standardize its processes, e.g., in equipment OEMs, machine types, operating procedures and practices, and any standards (safety, quality, hygiene, etc.). “Before we started our digital transformation, we had already established a standardized installed base with defined automation interfaces and manufacturing setup,” says Johannes Holtbruegge, Senior Manager of International Digital Transformation at Henkel Laundry and Home Care.

“Keeping in mind that we operate globally with more than 30 factories that all follow the same standards, this setup would be significantly beneficial. We could start our transformation on a bigger global scale, let different factories pilot in different areas of the factory, validate our projects and savings, and then scale the solutions in a fast way to other locations as well,” he says. “That helped us to engage with a lot of people and to gain momentum and speed in the beginning of our transformation activities.”

Initially the program was connected to a significant investment in infrastructure, he adds. “We had to prepare connectivity with every individual point in the factory, we had to install centralized and decentralized computational power to serve the need of operators for real-time visualization.”

Shared Initiatives:

 Henkel transformed the Toluca facility, a 1970s site characterized by low-mix, high-volume production, into a WEF Lighthouse award-winning factory by building on the previous success of its Dusseldorf facility, named a Lighthouse facility in 2020, then solidified with its factory in Spain which achieved Lighthouse status in March 2021.

Because technology is constantly changing, Henkel had to pilot different setups and evaluate a lot of options, says Holtbruegge. “We are continuously observing the market for new technology to ensure that the decisions we have taken are still state of the art and we are always looking for opportunities to upgrade.”

Because Henkel’s company culture is highly innovative, people are ready to try new things and learn, he adds. “From a conceptual perspective, we didn’t have to convince a lot of colleagues regarding digital transformation; the culture was there. We consider a digital transformation project like any other investment project in growth or rationalization; it has to come with an attractive return on investment.

“Finding the most promising projects out of a portfolio of unknown projects could be considered the biggest challenge,” says Holtbruegge. “We had to start learning about new technologies on a small scale, with small investments and lot of support in order to decide whether a project could become attractive and whether we could calculate a business case. We had to stop some projects in an early stage as we found that the time was not right or the target benefits may be lower than expected. However, once we decided to trust a technology and to roll it out, these projects have always brought us the expected return.

“Part of this success is that we involve our people (our internal stakeholders) fully into these projects. Line operators are part of the scoping of projects. Lab technicians together with supervisors help us to find the next story in quality. This takes effort in the beginning of the project, as well as upskilling people. Still, it makes operators proud of what they can achieve together (the perspective of having a pilot to which they have contributed to rolled out globally). It also accelerates the actual implementation phase of the project later on.”

A Digital Ecosystem

The company has successfully integrated a variety of M4.0 innovative technologies in four main ways:

  1. The Digital Backbone. Among the M4.0 technological innovations the company implemented, beginning with the Dusseldorf facility, was the development of a unique cloud-based platform Henkel calls the Digital Backbone. This platform connects more than 30 production sites and six distribution centers around the world in real time, with the goal of improving customer service, operational efficiency, and sustainability as well as achieving double-digit cost and inventory reductions.
    “This digital ecosystem allows us to keep track of the constantly growing expectations of customers while continuing to develop more sustainable production processes. Our digital transformation journey started back in 2013 and since then we have been consistently leveraging digital in all our productions sites worldwide,” says Holbach. By connecting this Digital Backbone with IT-systems, the business unit is driving line efficiency through predictive maintenance and advanced technologies.
  2. Big Data Analytics and AI Algorithms. To further strengthen its digital ecosystem, Henkel Laundry & Home Care implemented AI algorithms previously developed for its Spanish Lighthouse plant. The goal is to prescribe actions to assure breakdown-free line operations using historic data.
    In the Toluca plant, Henkel is using AI algorithms and big data analytics to take a proactive, agile manufacturing approach to minimize the risks for out-of-stocks by using integrated data from cloud-computing platforms to identify volatility in consumer demand. Henkel can combine machine learning on historical data with AI algorithms to develop actions that will eliminate breakdowns in line operations, making it possible to create a tighter alignment between planning, production, and customer operations.
    Another innovation the company had successfully implemented in the Spanish plant was replacing forklifts with automated guided vehicles (AGVs) to enable a complete touchless and safe product flow in the facility. The fully automated vehicles improve occupational safety while simultaneously maintaining optimum stock levels for raw materials and products at the Spain factory. It also established a technology based on the digital platform that allows for smart product serialization, facilitating full track-and-trace capability from cradle to consumers.
  3. Digital Twin. To help the company achieve its goal to reduce its carbon footprint by 65% by 2025, Henkel is building on scalable digital ecosystems by digitizing energy-intensive processes, such as the spray drying of powder detergents. Henkel employs a Digital Twin, or cloud-based 3D replica of the facility, to simulate operations and prescribe optimal process parameters, as well as sustainability and safety actions, to operators. By using a Digital Twin, the company reduced the total waste in its Montornès del Vallès plant by 35%, and improved energy and water consumption in the double-digit range.The Toluca plant, which is one of the company’s five largest Laundry & Home Care production facilities worldwide, also entails using these spray-drying processes. By incorporating the improved, more energy-efficient processes into the Digital Twin, the company is further improving the sustainability performance of the Toluca factory, as well as its other spray-tower sites.
  4.  The Connected Worker program. Henkel uses its M4.0 digital ecosystem to support its front-line workers in their day-to-day operations as well. By providing real-time data access and standardized workflows through its Connected Worker program, the company can identify, monitor, and benchmark the practices that are most effective and most sustainable. As part of the program, the company implemented a mobile app-based platform to simplify and digitize shop floor processes. The app digitizes worker interactions and process documentation with dashboards, schedules, and action prescriptions, enabling operators and the shop floor to stay constantly connected and make decisions quickly. One result was the elimination of 70% of the paper used in the Montornès del Vallès facility since 2018.The connectivity on the shop floor, combined with the overall digital ecosystem, also enables the company to monitor operations remotely, as well as foster digital collaboration among teams.

Transformational Impact

Henkel’s Dusseldorf plant, in addition to being recognized as a leader in M4.0 innovation in 2020, has also recently been recognized as one of the WEF’s first Sustainability Lighthouses, the only one in FMCG and the only one located in Europe. Its use of Digital Twins to connect and benchmark 30 factories and drive real-time sustainability actions in the Dusseldorf plant has brought about a 38% reduction (kWh/ton) in energy consumption, a 28% (m3/ton) reduction in water consumption, and a 20% (kg/ton) reduction in waste generation, as compared to a factory baseline set in 2010.

As for the Toluca plant, the Digital Backbone has already resulted in a 6% reduction in inventory, while the digital dashboards to monitor OEE performance has brought about a 14% improvement. With AI-powered optical inspection, the plant lowered customer complaints by 55%, and the Digital Twin increased energy efficiency by 19%. OEE performance also was enhanced 3% through the use of digital tools to empower its connected workforce.

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Lessons Learned

 “We learned that nothing is impossible if you have identified a need and have a team of people willing to fight for it, try, learn, pivot and adapt,” says Holtbruegge. “Digital transformation cannot be a headquarters program. We have digital engineers in all our factories whose task it is to develop digital roadmaps for their factories, suggest improvements from the bottom up within our predefined technology framework, (and then lead the implementation locally. Empowerment is key to solving the challenges of day-to-day operations which, even though the factories are as standardized as possible, can be different from factory to factory.”

The company also learned to accept that not every project that it starts can be successful. “We improved our approach to be able to identify projects that have a low likelihood of becoming successful as fast as possible to be able to dedicate time to projects with a bigger impact,” he says.

“The possibility to globally scale solutions is extremely powerful and is key to success. Instead of building island solutions, we are proud of having a globally harmonized IT infrastructure with a global SAP instance that helps us also to benchmark internally and strive for big contributions to our business success.”

“During this process we confirmed the strength of this virtual network of factories and found more and more use cases that would be fitting to this approach.”

 Next Steps

 The company is integrating its solutions and systems with each other more and more, says Holtbruegge. “The clear target is the digital twin of our production process. An intelligent model that can predict status changes of our supply chain (from planning and manufacturing down to the entire logistics process) based on which scenario analysis becomes easily possible – to everybody in our organization. We are working on data democratization, giving people access to data and allowing them to build their own content which they require to make the best decisions for our company.”

He adds that the company’s transformational initiative made it more resilient, brought Henkel closer to its customers and consumers, allows it to observe the impact of decisions on KPI in real-time, and gives everybody in the supply chain a toolkit which they can utilize to make smart decisions faster and more efficient.

 A Global Virtual Network

“We started our transformational journey back in 2013 and we were not sure at that time what the result would be,” says Holtbruegge. “Our transformation started with the need to further support our sustainability ambitions going forward. Hence, we decided to implement a global data platform (instead of a decentralized approach) and to connect all our factories to our digital backbone, which is still the key infrastructural element of our transformation.

“During this process we confirmed the strength of this virtual network of factories and found more and more use cases that would be fitting to this approach. We started to build a digital transformation strategy around sensorics, analytics, visualization, and robotics which contains our key focus areas, and which still guides us today in our day-to-day work, the further development of our digital capabilities. We are learning every day as we continue this approach. We identified bottlenecks and we learned to react on them fast. We introduced digital upskilling opportunities for our employee base, focused on concrete projects we developed,” he says.

“We are happy and proud of what we have already achieved,” notes Holtbruegge, “but we will continue to work on our system every day to make it more impactful, smarter, and capable to onboard more functionalities over time.”  M

About the author:
Sue Pelletier
, a contributing editor with the Manufacturing Leadership Journal, is a seasoned writer/editor with experience in online, social media, e-newsletter, tablet app, book and e-book, and print publications..

Supply Chain Disruption: Rethinking Resilience and Agility

The fact that supply chain disruption made major news at the onset of the pandemic crisis in the United States shows the depth of its severity. “When the president or any global leader talks about the supply chain, that is not a good thing!” said Simon Ellis, VP of Supply Chain Strategies at IDC.
Ellis and Bart Talloen, VP of Supply Chain Innovation and Insights at Johnson & Johnson, took part as panelists on “The Implications”, an edition of the Manufacturing Leadership Council’s What’s Next for Manufacturing? virtual meeting series, which took place July 21. Based on the theme of the June Manufacturing Leadership Journal, this meeting was focused on supply chain impacts and future implications.
While today’s supply chains have better visibility and resilience than ever before, Ellis says they still aren’t resilient enough. Understanding the multidimensional nature of risk and creating a resilient supply chain is essential to minimizing risk, especially when disruptions seem poised to occur more frequently and with greater severity.
Looking into the future, Ellis says that while some elements of the supply chain will resolve themselves over the summer, it’s probable that demand shocks will persist. While it’s unlikely that most companies will undertake massive reshoring of their operations, it is likely they will re-examine where their goods and materials are produced and make changes that strategically prioritize resilience over cost savings.
Ellis identified five technologies that can help enable a more resilient supply chain:

  • Cloud delivery/SAAS applications
  • Control tower/digital twin
  • Scalable data and analytics capabilities that inform real-time decision making
  • Artificial intelligence and machine learning
  • Multi-enterprise networks

For Johnson & Johnson, the top priority as the pandemic grew was to ramp up holistic multi-faceted risk management and supporting business continuity plans. From an end-to-end supply chain orchestration perspective, improving demand sensing and agile response to it and building supply chain resilience was key. With four facilities achieving the status of World Economic Forum Lighthouse Factories, the new demands brought about by COVID-19 were met by the company’s ongoing digital journey to bring together its existing innovation solutions into one integrated platform that could allow for end-to-end visibility throughout a digital ecosystem.
To meet intense changes in demand, J&J relied on a suite advanced M4.0 technologies to enable agility and flexibility. That included increasing the visibility of real-time data to make quick decisions. The company deployed AR on the factory floor and in warehouse and distribution centers for remote maintenance and engineering support as well as instructions and training. Other factory technologies were accelerated, such as advanced automation and robotics to help frontline workers and address staffing constraints. Also, 3D printing technology has been applied within J&J operations and outside in hospital systems, in support of the broader COVID response efforts (ventilators, masks etc.).
Talloen also shared an advanced example from J&J’s manufacturing operations called the MoBot, or Mobile Robot. These MoBots are standardized, stand-alone independent units (modules) that execute a single manufacturing or warehouse activity. They can be configured into integrated flexible, modular, and mobile manufacturing or supply systems. The MoBots use AI technology and have the ability to be reprogramed based on need in an easily reconfigurable production or warehouse line. J&J is deploying this approach in its pharmaceutical, consumer healthcare, medical devices, and over-the-counter drug manufacturing.
Asked for his feeling on whether complex global supply chains will give way to shorter regional ones, Talloen believes those changes will happen on a case-by-case basis. At J&J, the company is continuing to pursue its journey toward greater agility and customization, but it’s not one-size-fits-all. He believes that many companies may well now re-evaluate their suppliers and supply chain footprint as they identify specific areas of vulnerabilities and risk. The future will be about agility, adaptability and resiliency.
Supply chain risk is likely to remain a hot topic for at least the rest of the year as manufacturers reassess their operations, vendors, suppliers, logistics networks, and more. With no vaccine imminent and many parts of the United States currently affected by their own outbreaks, it’s likely that supply chain stability will be elusive for some time to come.
Recordings of all four What’s Next for Manufacturing? virtual meetings are now available on demand at: www.manufacturingleadershipcouncil.com/kbtopic/covid-19-resources/

Reinventing Manufacturing

Henry Stueber, Senior VP at Greene Tweed, believes today’s opportunities for manufacturing transformation represent one of the most energizing times in industrial history.

Q: What is your role and focus?
A:
I am responsible for a variety of functions, including manufacturing, platform management, business development, advanced technology (R&D), projects, supply chain, marketing, quality, and process engineering. My focus is maneuvering the organization through transformation and unprecedented growth.

Q: What is the most pressing issue facing the manufacturing industry today?
A:
Blending the knowledge from current successful leaders with the new skills emerging from talent that will take companies into Industry 4.0. Many senior leaders have been successful utilizing skills that fit the situation at the time. A new set of employees are entering the workforce that dissect data and disseminate information much faster. Blending the skills of the past with the speed of now, a new style work-force will emerge.

Q: What is the most important corporate initiative?
A:
Factory Innovation and Technology Transformation – an initiative we call The Right FITT™. This new initiative is a five-year manufacturing strategy in line with Industry 4.0 technology and best practices. Our goal is to refocus and retool operations to better support a growing customer base and our employees as we look forward to the future.

Q: What will be the most important leadership qualities to possess in the future?
A:
Urgency, accountability, and simplification, all driven by a never ending desire to learn and improve the world around you; this includes developing the next generation of leaders.

Q: What will be the greatest opportunities for manufacturers over the next five years?
A:
The opportunity to transform the way we work is exciting and energizing. Major manufacturing changes are underway for only the fourth time in history. We are all fortunate to be part of this current transformation where we have the opportunity to reinvent ourselves, and our work. This transformation should energize us all.

Q: What is your favorite activity outside of work or the last book you read?
A:
As a retired U.S. Naval officer, I enjoy taking time at the beach being with my family looking over the ocean. I have also enjoyed playing golf since an early age. Most recent impactful books are New Product Blueprinting by Dan Adams, Not Impossible by Mick Ebeling, and Turn the Ship Around by L. David Marquet.

Henry Stueber

Company: Greene Tweed
Location: Kulpsville, PA
Industry: Perfluoroelastomers, Thermoplastics, and Thermoplastic Composites
Website: http:// www.gtweed.com
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Unleashing Untapped Potential

Winnebago VP Chris West believes manufacturing leaders must close the gaps that prevent their teams from being engaged and empowered.


Q: What is your role and focus at your company?
A:
I am Vice President of Operations for Winnebago Industries. Winnebago Industries has multiple facilities in Iowa, Indiana, Oregon, Minnesota and Florida and is a leading U.S. manufacturer of outdoor lifestyle products under the Winnebago, Grand Design and Chris-Craft brands. We build the highest quality motorhomes, travel trailers, fifth wheel products and boats, which are used primarily in leisure travel and outdoor recreation activities.

Q: What is the most pressing issue facing the manufacturing industry today?
A:
Obviously, there are always issues to face. Our current priority is addressing the shrinking amount of talent and skills available for our operations. We see this as a key issue we must address now, and in the future, so we’re actively working on strategies and partnerships to address this in our local communities.

Q: What is the most important corporate initiative?
A:
We are a growing business that has doubled in 24 months and there are many challenges an organization faces with that type of growth. In order to grow, our business has to be scalable and we are in the process of implementing a new ERP system which is being strategically configured to not only support who we are today, but also to position us for who we aspire to be in the future.

Q: What will be the most important leadership qualities to possess in the future?
A:
It is difficult to pinpoint a single most important leadership quality anyone must have, but we know that people often leave bosses not companies. I believe it is most important for leaders to recognize this and be people leaders who positively influence the lives of their teams and communities. By understanding the gaps preventing your teams from being engaged and empowered, you can evolve as a leader to close those gaps and unleash untapped potential. We believe you win with talent, and we must attract and retain that talent to win in the long run.

Q: What will be the greatest opportunities for manufacturers over the next five years?
A:
I believe the greatest opportunity is being able to develop, implement, and leverage Industry 4.0. These trends in manufacturing technology are moving fast and manufacturers who are not taking the time to understand them and strategize on how they can, and will, create value for their businesses will be left behind.

Q: What is your favorite activity outside of work or the last book you read?
A:
I’m an avid runner. I enjoy the peacefulness and solitude of running. It clears my mind and allows me opportunities to focus on specific problems I may be dealing with.

Chris West

Company: Winnebago Industries
Location: Forest City, Iowa
Size: $2 Billion Revenues (2018); 2,850 Employees
Industry: Recreational Vehicles, Marine
Website: http:// www.winnebagoind.com

Connecting the Value Stream

Whirlpool VP Dale Laws feels clarity of purpose is essential for M4.0 leaders.

Q: What is your role and focus at your company?
A:
I am Vice President of Manufacturing Operations for Whirlpool Corporation’s North American Laundry and Dishwasher facilities. We’re the world’s leading major home appliance company with 14 manufacturing operations in the North American Region (NAR). My focus is delivering our goals and objectives at four of our manufacturing operations and actively supporting the execution of our broader strategy across the NAR manufacturing enterprise.

Q: What is the most pressing issue facing the manufacturing industry today?
A:
It’s an exciting time in manufacturing. We’re seeing advances in automation and robotics that are making these technologies more cost effective. Sensors, computing power and software advances are making true connectivity possible. All of these are coming together to allow us to produce and operate in new and creative ways. The issue is that the talent and skills to integrate these and other technologies into our operations, maintain them, and use the data to best advantage, is in very limited supply. I believe this will be a challenge for many years to come.

Q: What is the most important corporate initiative?
A:
From a manufacturing perspective, our primary objective is to deliver our Manufacturing 2020 Strategy. This is globally aligned and the focus of all of our manufacturing operations around the world. It consists of six focused work streams ranging from infrastructure changes, to leveraging technology, i.e., Industry 4.0.

Q: What will be the most important leadership qualities to possess in the future?
A:
Clarity of purpose. I may be a little old school with this one, but I consider some leadership traits to be fundamental and timeless. The pace of change continues to accelerate and does play a role in how I think about leadership. However, to me, this acceleration of change means that clarity of purpose is more important than ever. True alignment means questions can be answered faster at all levels of the organization. It can also be very engaging, motivating, and freeing for your team. They don’t have to wonder where we are going, or what success looks like, if you’ve clearly defined it for them.

Q: What will be the greatest opportunities for manufacturers over the next five years?
A:
It’s Industry 4.0 and the connected factory. Most manufacturers are working diligently to understand how to leverage technology to drive additional value. However, we are still just scratching the surface. We are still early in our journey. What happens next? Perhaps, it’s the connected value stream. I believe the closer we get these connections to the customer, the more opportunity and value there will be.

Q: What is your favorite activity outside of work or the last book you read?
A:
I tend to gravitate to those that involve things that are motorized, such as dirt bikes, cars, and flying powered paragliders.

Dale Laws

Company: Whirlpool Corporation
Location: Benton Harbor, MI
Size: $21 Billion annual revenues; 92,000 employees
Industry: Home appliances
Website: http:// www.whirlpoolcorp.com
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