W5: Henkel: A Digital Transformation Journey (IESE) Flashcards
Henkel
Established in 1876 and founded in Aachen. It burgeoned into a global entity, organised into three distinct business units: Laundry & Home Care, Adhesives Technologies, and Beauty Care
Carsten Knobel
CEO, guided by a commitment to sustainability and purposeful growth. He underscores the company’s aspirations to outshine markets through customer-centric approaches, drive sustainability leadership, and nurture a sense of belonging among its employees
World Economic Forum’s “Global Lighthouse Network”
Underscores Henkel’s proficiency in embracing advanced manufacturing paradigms
“Energy Management” certification journey
Pioneering endeavor that laid the groundwork for real-time monitoring and benchmarking of energy consumption across Henkel’s global production sites. Started the genesis of the establishment of a robust digital infrastructure
Wonderware technology
Leveraged by Henkel to swiftly expand its digital footprint, ushering in a new era of data-driven decision-making
AquaSpec3 analyser
A quality control technology. It was initially promising but turned out to be expensive and inefficient, leading to its abandonment for its original purpose. Instead, it was repurposed to verify raw material quality before production
Digital backbone
Facilitated the evaluation and adoption of new technologies, with international engineering resources coordinating projects to increase Overall Equipment Effectiveness (OEE). This led to the development of an online efficiency system to measure OEE on Henkel’s filling lines. The system was successfully rolled out across European plants by 2017, and later expanded globally
Digital strategy
Henkel redefined it for the supply chain in 2016, focusing on five key technology areas. Integration of digital initiatives in existing systems was emphasised. E.g. in 2018, they enhanced its formula fingerprinting capabilities and standardised machine-to-machine language with suppliers. Trials with drones and Automated Guided Vehicles (AGVs) showed promise, especially AGVs were adopted
5G technology transition
Aimed to optimise AGV usage. However, it required training for factory workers
Industry 4.0 pilot project
Started in 2018 in the Holthausen plant with Heidelberg’s 3D printing centre. It yielded significant cost savings
Digital Transformation group
Formed by Henkel to streamline digital efforts. They also established a global network of on-site experts
FourKites
Selected by Henkel for Track & Trace. It enhanced predictive capabilities for proactive customer service. The phased roll-out across Europe aimed to improve operational efficiency. Henkel prioritised training to empower internal teams and enhance customer service through digital tools
“Vertical/horizontal/global” approach
Adopted by Henkel’s digital transformation strategy. It focused on concrete applications, integration across the value chain, and global scalability. This method involved a systematic 2-3 step scale-up process (pilot phase, go/no-go decision, global scale-up). It blended top-down governance with bottom-up input from key users
Pilot phase
On 1-3 sites, for 3-6 months. Initiatives were tested in a select number of sites to assess their feasibility and benefits, such as label quality control
Go/no-go decision
A clear business case determined whether to proceed with scaling up the initiative globally. This decision-making process involved key stakeholders and users early in the design phase. The approach was standardised, with a central committee reviewing proposals based on predefined technological areas. Initiatives were assessed on their potential ROI or strategic value. Henkel remained open to revisiting parked ideas as technology evolved. This iterative approach allowed them to adapt and refine its digital transofmration journey effectively
Global scale-up
Took around 12-18 months. Successful initiatives were expanded to multiple plants worldwide, leveraging a focused and compact central team to ensure tangible user value
Data integration journey
Started in 2017, consolidating all information into a centralised data lake known as the “Henkel Data Foundation.” They transitioned to Microsoft Azure cloud environment in 2019, establishing a single source of truth (SSOT) data platform. All system applications and sensor data from factories were connected to this data lake
Morning meetings
Guided by insights from the digital backbone. Became integral to addressing production issues and fostering a culture of continuous improvement
HR department
Faced the challenge of recruiting and cultivating digital talent. They diversified its talent pool to include individuals with expertise in IT-related disciplines, alongside traditional engineering backgrounds. Internal initiatives aimed at developing “digital engineers” within existing teams underscored Henkel’s commitment to fostering digital proficiency
Digital upskilling initiative
Occurred in 2019, after Henkel realised the importance of digital literacy. Through online self-assessments and tailored training programs, Henkel addressed skill gaps and equipped its workforce with the tools to thrive in a digital-centric environment. Collaborations with industry partners facilitate innovative learning experiences, fostering an innovation-driven mindset among employees. Henkel continues to invest in learning and development initiatives to ensure its workforce remains agile and adept in an evolving digital landscape
Vision 2020+
Goals for the digital supply chain transformation include reducing costs and inventory, enhancing customer satisfaction and efficiency. The need to accelerate the transformation by leveraging digital talent and embracing change management was emphasised. Empowering employees with data for faster decision-making and attracting younger generations is important
