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Henkel's Digital Transformation Journey-Delivering Growth through Smart Factory Concepts
By Stefan Kozielski, Plant Director Düsseldorf, Henkel and Johannes Holtbruegge, Senior Digital Transformation Manager, Henkel
Henkel is a global FMCG player, headquartered in Germany, with over 52,000 employees worldwide. With its diverse and well-balanced portfolio, the company holds leading positions with its three business units: Adhesive Technologies, Beauty Care, and Laundry & Home Care. Henkel looks back on more than 140 years of success, both in the consumer and industrial business.
Holistic Smart Factory Initiatives
Technology is a critical enabler to deliver growth in today’s fast-moving and agile world. Digitalization is crucial to meet the growing customer and consumer expectations on service and sustainability. Therefore, Henkel is continuously stepping up its investments in innovation and digitalization to optimize business processes along the entire value chain. The company is competing with its digital global supply chains to deliver growth, fast and efficiently. The Fourth Industrial Revolution is on the rise—and Henkel is right in the mid of it.
The digital journey of Henkel Laundry & Home Care’s supply chain started back in 2011. Smart factory concepts have attracted more and more attention to increasing quality and productivity with less waste and a smaller environmental footprint. New technology and data-driven solutions were central when implementing the first smart factory concept in Henkel’s Laundry & Home Care facility. In 2013, the global supply chain team of Henkel Laundry & Home Care—located in Amsterdam—has launched a unique cloud-based data platform, called “Digital Backbone.” This cloud-based system connects more than 30 production sites and ten distribution centers around the world in real-time. It helps to improve efficiency while achieving double-digit cost and inventory reductions. This data system is continuously linked to global operations end-to-end and brings advantages regarding energy efficiency and process optimization along the entire value chain.
The plant manager Stefan Kozielski, who oversees the largest production facility of Henkel Laundry & Home Care in Europe, was instrumental in the implementation of Henkel’s Digital Backbone project in the Düsseldorf production. “Our digital backbone collects and analyzes data from every process step, every machine and every production line—from mixing the ingredients until the preparation of the final product for transport,” explains Stefan. “With the help of Artificial Intelligence and high-tech sensors, the system can identify malfunctions and errors in real time. This helps to find vulnerabilities and improve processes.”
With the help of AI, advanced analytics, and thousands of sensors across the production facilities, Henkel can improve the product quality as well as the environmental results with the help of the collected data. Through the digitized supply chain, production employees and managers can track efficiency, energy, and water use in real-time at each connected plant, worldwide. “Through our smart factory system, we are able to compare the performance of all connected plants. This provides us with valuable information on the best and most effective practices,” adds Stefan. He also explains that the system enables a closed loop in terms of data collection, evaluation, and adaption into the production processes: “Another crucial aspect and important advantage of our Digital Backbone is the tremendous planning speed. The sensors help to determine the real-time speed of our production lines and transfer them back into the data system. Thereby, the algorithms can compare the planned speed of production with the real-time data and suggest concrete changes. Such data is currently used as a recommendation for our planners but in the future, we will even further digitize our production facility to improve the supply chain processes and our warehouse management.”
Smart Factory is not a buzz word relating to the future; it has already arrived in the middle of Henkel’s production
“Together with our factories and warehouses, we have identified a lot of global use cases that are building on the infrastructure of the Digital Backbone. The full connection of all our locations to one system allows us to easily develop new modules that bring benefits to our business and deploy them really fast into our network. Thanks to a harmonized setup this brings us very strong benchmarking possibilities between locations, allows to learn from the network and to accelerate our improvement journey,” underscores Johannes Holtbruegge, Senior Digital Transformation Manager.
Sustainability at the heart of Henkel’s Digital Backbone
Smart Factory is not a buzz word relating to the future; it has already arrived in the middle of Henkel’s production. Automated guided vehicles (AGVs), robotics, artificial intelligence, and advanced data analytics are already implemented in Henkel’s production landscape. Using information from more than 3,500 sensors, production employees and top managers can record the energy efficiency and water usage of each connected plant. With over 2,000 dashboard interactions per day and 2,100 users of all hierarchy levels and supply chain locations, the system offers the best operational efficiency while lowering costs and emissions. Since 2011, the business unit has reduced its energy consumption by 27 percent due to the data-driven cloud system. “Our achievement has shown that digitalization is a key driver to sustainability. We will keep on pushing holistic smart factory concepts and the digital transformation of our production facilities to leverage the sustainable development of our organizations,” says Stefan. Beginning of the year, the state-of-the-art Laundry & Home Care factory in Düsseldorf has been recognized as an “Advanced 4th Industrial Revolution Lighthouse” by the World Economic Forum together with McKinsey. Henkel has prevailed over 1,000 examined production sites and belongs to a global network of the most innovative production facilities worldwide. “We are delighted to be rewarded for the great achievement of the whole production and supply chain team— we have shown that Henkel is on the right track towards Industry 4.0. I am convinced that the entire classic factory organization is changing,” adds Stefan about the effects of Henkel’s industry 4.0 technologies, “In the close future, our goal is a self-optimizing system in our smart factory.”