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LG’s Director of General Operations: A New Model for Future-Proofing Supply Chains

Supply chain leaders are emerging from a difficult couple of years plagued by various global crises with a renewed determination to build resilience in a volatile landscape. The question on everyone’s mind: What actions can be taken from the recent lessons learned?

During our insights session with supply chain business leaders, LG’s Director of General Operations, Gabriel Mesas Paton, walked us through the secret of the multinational electronics company’s collaborative supply chain strategy which helped them weather and quickly adapt to continuous disruptions.

 
Gabriel Mesas Paton, Director of General Operations, LG Electronics is directly involved in all divisions of the company from consumer electronics to B2B solutions. He also leads the integration of operations capabilities to foster LG leadership. Additionally, Gabriel is a Member of the Executive Board at CEL (Centro Español de Logistica) and speaks at different business schools and industry events.
 

How did the recent economic challenges impact LG’s supply chain?

We have been severely impacted since ours is a very fragile supply chain. The product lifecycle of electronics is very short, meaning that everything moves quickly. As such, the disruptions over the last three years caused our supply chain to suddenly stop. We don’t have a lot of inventory along our supply chain and therefore, no huge buffers that we can use to overcome these issues. These disruptions led to difficulties in delivering products to our clients. Having said that, I’d say we have been able to overcome those challenges.

Allow me to first explain how we operate. We have a global supply chain that moves hundreds of thousands of containers a year. We have factories in many countries and the entire chain is complex. Ours is also an integrated global supply chain, which is not typical in many industries. This brings with it major difficulties but also opportunities and advantages.

LG Electronics has a single forecasting and production capacity system as well as a single system for order and inventory management. Today, we can see inventory levels at warehouses, orders from clients, production capacity, inventory of components along our supply chain, suppliers, production facilities, and the capacity of our transportation partners and distribution centers. All this information is visible simultaneously to all parts of the supply chain. We’ve been able to build this integrated supply chain visibility for over 15 years.

Of course, when one part of the supply chain is affected, that impacts the rest of the chain. However, we do have the advantage of immediate communication and reaction.

 

The Collaborative, Planning, Forecasting, and Replenishment (CPFR) model in supply chain has been around for a while but has recently received criticism for its lack of usefulness in recent times. Can you elaborate on the new concept that LG has implemented instead?

CPFR was very popular from the 90s to around 2007. It was a way of collaborating with manufacturers and clients over a period of one to three years. Forecasts and production plans were made for 12-month periods and replenishment orders would be done for the three months following that. A review of the market would take around a month. It was a long commitment.

In today’s market, CPFR is no longer valid. You cannot make commitments for two years. Our products change every year. In fact, we launch new televisions every year, but we upgrade the features every six months. How can we make a two-year commitment for a product with a lifecycle of fewer than six months? We understood that we needed a framework that allowed for immediate response.

We came up with what we call FCR – forecast, check, and react. It’s a new process to produce the best forecast, continually check in with our clients and partners, and react immediately both locally and globally.

FCR is about setting up a joint process with our clients to do forecasts that we then use to come up with some rough intentions and commitments for three months. But of course, the level of commitment is low and our clients are not interested in committing for just a few months when the market is extremely volatile. So, we check in with market progress on a weekly basis and react immediately.

This process requires thorough collaboration and work. We are looking at data to create forecasts for the next three months. From there, we narrow down forecasts for each product on a weekly basis. Then we gather information on weekly sales to see how the market is progressing. If sales levels are as expected, we will confirm our orders and forecasts. If not, we will take other measures and adjust our projections.

It’s like what we used to do years ago. The difference is that we are managing information and visibility on a global scale. We have discussions with clients and partners daily. Decisions are also made daily.

For example, we can have production orders for our factory in Poland on Tuesday for products to be delivered to our clients in Iberia between Friday and Monday. Roughly 50% of our sales are executed directly from the factory to our clients without passing through a distribution center. This allows us a quick reaction capacity. FCR allows us to implement quick updates, review changes, and make adjustments in real-time.

 

Do you use product-in-use data for sales predictions?

Unfortunately, our market cannot be statistically forecasted because the effect of promotions and the effect of seasonality is so big. Having said that, it can be analytically forecasted. What we do is work on this joint forecast with our clients, using product data to estimate and project sales for the next few weeks. We consider our clients’ promotional plans and our own marketing investments. We do our forecasts at an aggregated level to procure materials, but not for sales of an individual client.

 

How important is the network of partners for LG Electronics?

Typically, inventory was the protection against uncertainties. Now, we know that inventory is extremely expensive and the risk of holding it is too high, especially with the marketplace and world we live in today.

The way to build buffers nowadays is by building capacity, which requires a network of partners.

For example, 15 years ago we could have 30,000 units of TVs in a local warehouse to protect from demand uncertainty and variability. Now, we build capacity between factories, supplies of components, transportation capacity, and manufacturing capacity. We are agile in production, meaning we can extend production by a few hours per day, giving us the ability to increase daily production by 20% to 25%. We also have the capacity to stretch transportation from five trucks per day to 200. This means we can cover for the uncertainty with the capacity to reach. This is only possible with a big network of suppliers and partners.

For example, if we had only one transportation partner, we could not reasonably expect them to have five trucks one day and 200 trucks the next. What would they be doing with their idle capacity? To divide the risk, we have many partners. In Iberia, we have over 25 logistics partners. The same is true at the European level.

So how can we work with them? We need to show them all this information in the FCR model. The forecasts and plans are aggregated at a higher level, then disaggregated at the partner level daily. Sharing this information allows us and our partners to prepare as much as possible.

 

What makes it possible for you to react to customer demand changes within a week?

Our production plan is adjusted daily in the factory. Transportation capacity is confirmed with carriers 24 or 48 hours ahead. Sales orders are confirmed daily with our clients. It’s just about having the right information and commitment.

One of our secrets is losing the concept of fighting and negotiating with clients.

We live in a market in which we need to work together with our clients by building mixed teams. There are some functions that still reside entirely within the client and within LG, but then we have several functions that are performed by a core process team that jointly works over the same information. They share roles, responsibilities, and the same KPIs. They share communication and tools which allow us to work closely with our clients. The secret is to work as a single team, to know that the only way to win is to do it together.

*Answers have been edited for length and clarity.

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Christine Cheminay: There’s No One-Size-Fits-All Solution For Supply Chain Resilience

From the semiconductor crisis to a global pandemic and now the Russia-Ukraine war, the automotive industry has struggled with supply chain challenges because of global volatility. We speak to Christine Cheminay, Director of Global Purchasing Battery Systems at Webasto Group on the supply chain challenges facing the automotive industry, sustainability, and women in leadership.  

 

Global developments, such as the COVID-19 pandemic in 2020 and the recent Russia-Ukraine war, have a ripple effect across industries. What are some supply chain challenges facing the automotive industry right now?

It is a very volatile situation and indeed, while we start from COVID-19, let’s also not forget about the semiconductor crisis. We have been facing a shortage of chips for almost two years and are chasing electronic components on a daily basis.  with COVID-19, the effect was increased because, in that period, modern consumer products got a stronger focus while automotive volumes went down. As now both industries want to be on a high level, we face a shortage and price increase.

We see the same effect on energy and logistics for the past year. Plus, the raw material prices have increased and now there is war in Ukraine where we have partners and suppliers that we need in our chain.

What it led to is a need for us to be fast in creating a task force and implementing it in our daily business, to have daily check routines, resilient people, and reliable supply chain tools. This is a challenge.

It is putting a lot of pressure on people. COVID-19 brings a lot of mental challenges. Not for everyone, but there are people who are tired, lonely, and stressed – overall overwhelmed by this situation, and we should not forget this in the daily run of activities.

I think that tension must be in the daily focus of leaders in a company – to think about how we care about our people. Where can we support them and how can we create balance?

And it is not only about big steps. I think we need to watch the small steps and small support for our people. It is an attitude of how we approach our people to get into a positive mindset based on our values, our culture.

But of course, the longer these struggles last, the more exhausting it is for everybody. So that’s why we cannot just rely on being friendly to each other or doing an activity together. We must really think about how to implement an environment that is supporting the challenges of the market.

 

How can businesses ensure supply chain resilience amid disruptions due to global crises?

That’s interesting because we’ve talked about resilience for almost two years now. We started with COVID-19, and now companies who can be resilient have already implemented plans.

But in an individual business-related situation, we need to look at what resilience really means. For purchasing, it can mean different sourcing behavior (e.g. multiple-sourcing instead of single sourcing). Or can we change to a different material or technology?

For me, a one-size-fits-all solution doesn’t exist.

I really believe that sometimes we need to be creative or change the demand. And that cannot be implemented from just one function. It always has to be a cross-functional activity in a business environment.

For example, if I have a certain chip on a battery management system that I foreseeably cannot get on the market, the team of purchasing, R&D, validation, and sales need to find a solution together.  

And what I also believe is that, to some extent, we need to accept that there are disruptions. I do not see an end for the moment. Rather than just accepting the situation, we prepare and support our people in the best way. We need to understand which people are not coping well with this pressure and guide them as leaders.

 
Keep up with the latest digital trends in our 90Minutes Insights webinar series. View the full schedule here.
 

What do you think are the main obstacles organizations in the supply chain and automotive industries face with improving their ESG initiatives?

It’s kind of an additional focus that we have seen for a while. I really trust, especially in automotive, that we are already good to some extent. But what I see is that we have to decide on the right tools and define the right measures for baselines and targets. If you have that, you can always define a strategy and ensure that it fits to the business.

Sustainability has a price tag, and I think as a society, we must be honest about that. I think sustainability won’t be possible by just doing things differently. I think we also need a change in our approach and how we measure our business, our sustainability.

Let us compare it to personal behavior. If you are truly convinced that it’s better to buy local products, you will change your behavior.

Coming back to business, the whole supply chain is responsible. For me, there is a big chance now to take a holistic approach to how we, as a society, want to treat the environment, the world, and what are the consequences. How do we ensure that what we intend to do is happening on every level of the chain?

In this matter, digitalization and data solutions are key aspects as well. I don’t think any of this is possible without that.

 

Though the number of women in leadership positions has increased overall, the automotive industry appears to be lagging in this respect. Why is this and how can organizations within the automotive industry attract more female talent into this field?

For me honestly, that’s still a big-ticket for the many industries, institutions, and governments. And for me it is not about gender only. The key is gender and diversity.

Sometimes I also do see some light. We see more women in leadership now; we see more diversity. I think this is the most valuable approach a company can take. If we have one cultural background and one dominant gender in a company, this cannot bring an organization to another level. Yes, I believe gender and diversity causes more friction and it is more exhausting, but I truly trust this brings businesses forward.  Therefore, we have to incorporate this approach in how we set up teams and organizations.

To encourage more female or diverse team members, I think role modeling and mentoring are important. Plus different working models like shared leadership. It is not simple, but I trust it is possible.

I also think being flexible is important for example when it comes to mobile offices. Are we forcing people back to office?  Are we going back to the Stone Age? I think there’s room for flexibility and improvement.

Also, social acceptance that women are working and having a family is important. . This is a mindset and I think it is something we can just continuously work on.

Still, I have to say, I do like the quota. At one point in time, hopefully we will not need it anymore. But for the time being, we don’t see enough success and quota is the lever to drive implementation.

There is room for changing minds, but we must have the courage to trust that change is healthy. Of course, that’s not to say we don’t have to work hard. We know this is a competitive market and we cannot be happy all the time.  We have to be creative and innovative. We have to push and find new solutions, and work hard and smart. But we also have to balance it out with an environment that allows and ensures open mindedness, while driving a culture where diversity is a given.

*The answers have been edited for length and clarity.   

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Carl-Magnus Norden: From Idea to Global Business in Just 6 Years

The journey from an idea to a company that is growing at an industry-leading pace is not easy. However, several business examples show how it can be done, including Volta Trucks which manufactures and provides service for zero-emissions commercial trucks. 

Founder Carl-Magnus Norden started investigating the concept behind the Volta Trucks in 2016 and is now on track to go public with the company in 2023. He takes us through this journey and shares his strategy for the organization’s success on the future of electric vehicles.  

 

Identifying and Addressing Problems

 

Volta Trucks’ approach is to provide Trucks as a Service (TaaS), an innovation to accelerate the transition to zero-emissions commercial trucks and reduce customer complexity and risk. 

 
 

The growing appeal of electric vehicles (EVs) indicated that the market is ripe for such an innovation. Wanting to address three main issues of climate change, road safety, and driver shortage that is sweeping Europe and the United States, Norden came up with the idea for Volta Trucks.  

Norden emphasized the importance of listening to Volta Truck’s potential customers to identify the issues and the best ways to address them – which is the core of the company’s strategy right from the beginning. 

He said, “When you start a venture like we have done, I think It’s very important, number one, like we have done from day one, to talk to the customers, listen to their problems.” 

Norden recounted his discussions with Transport for London which illuminated the scale of the road safety issue that the city was facing. According to Transport for London, while only 4% of traffic in the city are trucks, they are involved in 78% of all fatal accidents with bikers and about 26% with pedestrians. This is a major issue that requires an effective and innovative solution which Volta Trucks wants to address. 

As for the driver shortage issue, Volta Trucks focused on the truck design itself using a “driver-centric” approach. A standard diesel truck is built in such a way that drivers are sat quite high up in the cab. Climbing in and out of a commercial truck over 20 times per day can be frustrating for many drivers, leading to them simply jumping out of the cab instead, Mr. Norden found. This results in many of them developing issues with their knees, hips, and joints.  

They are also sat on one side of the cab, meaning that they can only exit the truck on one side, which may pose safety risks when coming out on the side of traffic, creating blind spots. It also poses a risk for other road users.  

 
 

Coming with a “driver-centric” approach, the design by Volta Trucks starts with an electric drive train as a base, with the motor on the rear axle and the battery housed within the ladder frame. This allowed for full freedom to create a cab design that optimized for driver comfort and safety.  

Design features also include much bigger windows to minimize blind spots; a center seat for the driver allowing for exits on either side and 220-degree vision; and sliding doors to avoid risks to oncoming traffic.

 

Sharp Focus is the Key to Success

 

The key to Volta Trucks’ success in going from an idea to a global business was a sharp focus on its mission, according to Norden. 

One example of this sharp focus is Volta Trucks scope of producing only electric trucks. This means they only have one drive train technology to master, enabling the company to develop at a pace that many incumbents or existing marketplaces cannot.  

They also only manufacture mid-duty trucks at between 7.5 to 18 tons, leaving out long-haul trucks or small delivery vans. Further, Volta Trucks only offers two cargo box types: refrigerated and ambient. Their market research shows that this opens them up to at least 60% of the biggest cities in Europe. 

This level of focus led Volta Trucks to narrow its focus on city distribution with depots placed in the outskirts of cities, thus allowing Volta Trucks’ zero-emissions vehicles to go around the city making deliveries all day and come back to the depot in the evening.  

“The beauty of that is that they are stationary in the night. More or less, we know how long they are driving, and we can do the charging infrastructure around it. We don’t have to rely on public charging infrastructure. We install it at the depots,” Norden explained.  

To date, Volta Trucks have procured a location for a service center in Paris, with plans to open more centers in London and Madrid. They are setting up wide-reaching capabilities around maintenance services, charging infrastructure as well as finance and fleet management.  

 

From Big Idea to Big Business

 

In the passenger car market, Tesla has 75% of the market share in EVs in the US – with the remaining 25% being other major car manufacturers like Volkswagen and Mercedes. In the commercial vehicle world, Volta Trucks is making waves and growing rapidly.  

Norden attributed the company’s ability to outpace its competition because it started entirely from scratch. Volta Trucks created the opportunity for itself to not only come up with an innovative product but the services around it as well.  

Importantly, the company is not limited by legacy designs or organization. They are not held back by legacy business models. This allows Volta Trucks to start with a clean sheet and construct a business model, organization, and systems that are adaptable and tailor-made to its use case.  

 
 

“When it comes to strategy, …we tried to have a very simple and clear strategy. We have reimagined the urban truck, we are moving at speed and scale, and focus on sustainability and safety,” Norden noted.  

Volta Trucks is not a research project. Instead, it has jumped straight in with the intention to hit the market at volume with its product as soon as possible by leveraging proven, market-ready technology. They “look for people that know their business”. This strategy is applied across Volta Trucks’ supply chain.

For example, Norden worked with US-based Proterra for its batteries as the company has over a decade of experience working with electric buses and major commercial vehicles. For the motor and E-axle, Volta Trucks partnered with Meritor, one of the biggest axle manufacturers in the world.

Even in manufacturing, they have partnered with the existing manufacturing site for MAN Truck & Bus. As MAN ramps down, Volta Trucks is ramping up, allowing for plenty of room to expand.

Norden stressed: “You have to work very closely with all your stakeholders, I would say, and that has been our attitude from the beginning.”

“With the whole ecosystem, we have to work together. So in our case, we will have been talking to customers from day one, getting their input about design and other things. The same thing with our supply chain.”

“There is a lot of good developments out there. But we need to do it together.”

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Joost van der Vlies: What Tech Leaders Should Know About Software-Defined Logistics

Disruptions are commonplace in the supply chain and logistics industries. Thankfully, technologies such as Software-Defined Logistics (SDL) offer game-changing solutions to obstacles in the supply chain. We speak with Joost van der Vlies, CTO and Head of Architecture at PostNL, on the benefits and challenges of implementing SDL, as well as important insights on cloud technology in the logistics space.  

 

SDL is an emerging approach for EDGE computing and PostNL is one of the pioneers in this area. How do you define the use of SDL for enterprises? What benefits does it bring?

SDL is all about using data and algorithms to steer the supply chain in all its aspects, from forecasting, planning, execution, monitoring, communication, and making real-time decisions automatically. For example, our network setup before determined the physical flow of a logistical item (e.g., parcel), now it is the digital twin of that item that determines the physical flow through our third-party networks. The digital twin contains not only the metadata of the parcel and the order but also customer and operator preferences which can be updated in real-time. For example, deciding on the sorting belt to change the operator from home delivery to retail delivery as the consumer updated their delivery preferences, or to change the operator from bicycle delivery to truck delivery as the item was much heavier than communicated. This means SDL is about sense, deciding, and responding, which makes logistics much more flexible and dynamic. Interestingly, this also creates a lot of new data, which can be leveraged in ways not thought of before. 

 

For PostNL, how are you effectively utilizing SDL as part of your cloud strategy? What is the framework and how can CTOs apply it to their organization?

Our cloud strategy is a multi-cloud strategy comprising SaaS, PaaS, and IaaS service providers, and a strong connectivity layer that also includes Edge environments. SDL is part of a more digitized business and cloud is the de facto delivery model for digital business. Within our cloud strategy, the emphasis is on cloud-native component-based application architectures, which can automatically scale depending on the logistical volume and can take part in the sense and response patterns that SDL requires. We train our machine learning models in the cloud and deploy them where decisions are made, that can be both in the cloud or on the edge. As response time and throughput are essential factors, we use global tier 1 internet service providers that provide abundant capacity, maximum uptime, and truly global coverage (for our international business), and private network partners where necessary. 

 

Of course, with any emerging technology, there are challenges and obstacles. Currently, what are the main challenges that tech leaders need to be aware of with SDL?

One of the challenges is that not all existing applications have been designed to operate in a real-time use case, so temporary measures might be necessary as well as a structural re-architecture. Here’s another example — when using machine learning models, it can have a more complex deployment model having an AI platform develop and re-train the model, and have it embedded in an algorithm in or near the business application it is used. And with SDL events can occur from a multitude of actors, which need to be handled in a highly scalable rule engine and using a single source of truth state machine of logistical items. Tech leaders should also be aware of the impact of the business operations on the people working thereof which their work will be impacted. Business and IT should jointly work on SDL and have a change management process from the start. 

 

How did PostNL overcome these pitfalls? What can other CTOs learn from your approach in tackling challenges?

Regarding algorithms, in the past years, we moved from data science hypothesis projects to the development of algorithms with learning models for use in production. That is only possible in a multi-disciplinary approach combining data scientists, data engineers, and the DevOps teams where these algorithms will run or with which it will be integrated. We were not afraid of taking a high-profile initial case and started working on this, learned from it, and eventually earned a computable award in 2020 with an algorithm that predicts when a parcel will really arrive. This is the same for the real-time data case. It requires a multi-disciplinary approach, time, and capacity for innovation, as it has a lot of consequences not all immediately known from the start. 

 

While cloud adoption is gaining momentum, there is still hesitancy among enterprises to fully adopt it. What should the approach be for CTOs to encourage technologies such as cloud and SDL within the organization?

Technology is not an island. Technology supports businesses to become successful. The processes of our customers and our own are getting more and more digital, and increasingly we do business with applications and machines instead of human interaction. Yes, an API is a technical way of accessing data and functionality, but in essence, it is a 100% digitized business service. Together with high volumes, the increasing number of digitized actors in our ecosystem, and the increasing flexibility our customers are asking in the e-commerce domain, cloud and SDL are essential capabilities for digital business. 

 

Finally, what advice can you give to other organizations that are starting to invest in cloud technology? What are the common mistakes that CTOs should avoid when making their transition into the cloud?

Firstly, cloud is not an infrastructure play. It is a full-stack play and includes, or starts with, an application strategy. Rehosting only will not provide true benefits. Understanding business drivers and the requirements for the applications in the future will be input for decisions to buy, consume or make. It also influences decisions to retire, replace, or re-architect those applications, which has direct consequences on the cloud strategy and roadmap. 

Next, skills around networking, storage, and high-performance computing are important and still very relevant when moving to cloud. You should continue having these skills onboard to avoid problems in the long run.  

In addition, the term multi-cloud is used a lot in the industry, though it is much more than using two or more public clouds. For us, any service a partner provides through the Internet is a cloud. This multi-cloud has to be managed from an overall functional, technical, and multi-supplier perspective. Lastly, when starting from a pure on-premises environment, the current IT department setup will probably not be aligned to cloud. Therefore, setting up a cloud competence centre is crucial.  

*The answers have been edited for length and clarity. 

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HEINEKEN’s Magne Setnes: Resiliency, Risk Management, and “The Swiss Army Knife” CSCO

The supply chain continues to be an ever-growing complex system that, just like precariously stacked dominoes, can be affected and disrupted by several things. Be it from transportation breakdowns (Suez Canal obstruction) or shortage of resources (global chip shortage), the chances of something that can impact a business’s supply chain system are correlatively rising.

With the gaps within businesses’ supply chains being evident, especially after the wake of the pandemic, it is obvious that supply chain leaders and CSCO will need to focus on resilience to overcome them.

As the Chief Supply Chain Officer for HEINEKEN, Magne Setnes shares with us his insights on why resiliency and financial understanding need to be the priority for organizations today and why being a “Swiss Army Knife” is necessary for a modern CSCO.

 
Want more insights from Magne Setnes? Join him and many other industry leaders in Management Events’ 600Minutes Supply Chain Management event in the Netherlands.
 

Prioritizing visibility, resiliency, and sustainability in the supply chain

The supply chain landscape has undergone massive change due to the pandemic, a majority of which had negative effects on many companies and businesses. These changes and disruptions have pushed many supply chain leaders to rethink the importance of visibility and resiliency within their organizations.

Setnes echoes these priorities in his role as CSCO for HEINEKEN, but at the same time, highlights the broader picture that other supply chain leaders will need to focus on for the future.

 

What are the priorities for organizations in facing disruptions? What key areas should supply chain leaders focus on for the future?

 

When it comes to disruption, very often you can make the mistake of thinking that once you deal with the disruption, it will go away. I am not so sure that is going to be the future moving forward and we are seeing now that disruptions are staying longer than expected. As we move into the future, we will see more of these disruptions.

So, you must create a resilient supply chain, which is good advice for the future. And there are other areas that your organization needs to be very aware of, such as the various tiers in the supply chain. It’s not enough to just look one tier downstream or upstream. As a CSCO, you need to start looking at, for instance, your supplier’s supplier and try to understand how all of your supply chain system works.

Of course, to operate on that level, you will need to have more visibility in your supply chain. I see many companies, including ourselves, working hard on creating better insights and visibility, both upstream and downstream. In addition to working on other areas like scenario planning and forecasting consumers’ and customers’ needs.

Another one that is also on the table of supply chain officers around the world is the whole impact on the environment and how it impacts us. Sustainability and social responsibility are very much something that will impact more in the supply chain and might lead to some disruption. 

For instance, the availability of certain raw materials and how they are not sustainably supplied can lead to disruption. Your supply chain needs to pursue sustainability and achieve the goal of being a sustainable company.

 

Tackling supply chain risk management and initiating change in operating models

The supply chain is the fuel that keeps the engine moving for all things retail and manufacturing. Take that out, and you have no product, no inventory, and no revenue. When faced with disruptions to the supply chain, retailers and manufacturers are often scrambling to get everything in order.

Based on a survey conducted by Gartner in 2020, only 21% of respondents have built a highly resilient network, which is less than ideal. Setnes highlights the need for having proper risk management strategies and operating models that can help supply chain leaders get ahead of those risk factors. 

 

How should CSCOs strategize their approach in achieving good risk management? What aspects should they focus on?

 

We have a well-regulated and governed risk management process in the company as a whole. But when it comes to strategizing risk management, our approach is to, as a company across all functions, get together and identify what the biggest risks are and make sure we create a picture of success.

I think that it is important to create a picture of success, work your way back from that, and in this way create a plan on how to get there. Of course, this is not an easy task, and quite a lot of work goes into this, but it is also very helpful for organizations as it shows you the things that you need to get done and what you need to get organized in your supply chain or your value chain. 

In managing this, scenario planning becomes very important. To create ideas and consider, “What if this happened, or if that happens”, and to develop scenarios in order to activate solutions when something does happen. In reality, of course, the scenario you plan for is not exactly going to be what’s happening, however, it brings that mindset of being ready and creating some resilience in your supply chain.

Another important aspect is to look at and understand the financials of your value chain. To get away a little bit from averages, to understand not only the average performance but also certain product lines. That way, when a disruption happens or if you experience a big shift from the consumers, you understand how it is going to impact you financially as well.

Last but not least, having a pulse on customers and consumers is very, very important. 

 

What are the challenges and approaches for CSCOs in initiating change within their supply chain operating models?

 

I think many supply chain officers have to deal with the fact that, in the leadership of the companies where they participate, conversations are very often commercially oriented. 

But the supply chain is a collective of small pieces and it can be difficult to convey changes in supply chain operating models in a way that is easy to grasp. You change something here and several tiers further something else changes and this is not always straightforward to work with.

So, having a clear understanding of all your product lines, understanding where the costs are, and where your bottlenecks and difficulties are, are key factors in the decision-making process at the company level as they directly relate to the financial or sustainability outcome of your company.

Typically, when you have a certain product, it will have a product owner, maybe a marketeer who will eventually own a product line. And if you want to make changes, if you cannot illustrate the true impact of the change in terms of sustainability, financials, or customer appreciation, it’s going to be very difficult to have that discussion.

Having that value chain view will be key in these types of decision-making processes and in initiating change. 

And in the past, we were driven by KPIs that were typically about efficiency, productivity, and availability. However, you have to add the financial and sustainability impact and I think CSCOs are finding themselves having more and more conversations with their commercial and financial colleagues to further strengthen the understanding of the value chain as a whole.

 

Equipping The Right Tools and Traits For The Modern CSCOs

The unprecedented disruptions organizations faced in recent years have shown the importance of the chief supply chain officer in encouraging supply chain sustainability and resilience. This newfound importance and influence the role has on the rest of the C-suite and the entire organization means CSCOs must equip themselves with the right tools for the future.

However, Setnes points out that the necessary traits that the modern CSCO must be equipped with are often not so clear-cut. Rather, it’s about being a “Swiss Army Knife” of sorts where they need to use the right tool in the right situation.

 

Are there necessary traits that CSCOs need to be equipped with within today’s post-pandemic landscape?

 

I think it very much relates to the company or the culture in the company and how they are organized. The supply chain has always required deep expertise and you still need core competencies, whether it’s in technology, logistic management, or business.

So, the core competencies are still very much needed but now, you need to be much wider because the supply chain is an end-to-end game, not just a department in a company. It’s a process that runs from one end to the other end of your entire value chain. A process supported by digital tools, to deliver financial results, customer satisfaction, and overcome the sustainability challenge we all face.

Because of that, the future supply chain officer will need to be more oriented towards understanding the dynamics of their entire value chain and also be well-equipped in terms of customers, consumers, digital and financial understanding. So you can talk with marketeers and commercial colleagues just as easily as with the IT and finance departments. Last, but not least, is the whole dimension of sustainability. 

CSCOs today are becoming broader and broader in their orientation. And while you cannot have deep knowledge of everything, you need to have good core competencies from which you can build your “umbrella”. We are like the Swiss Army Knife. The most used tool might differ a little bit from industry to industry, company to company, but in general, the Swiss Army Knife is becoming bigger.

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Gunnar Hagman: Digitaliseringen avgörande för miljö- och hållbarhetsarbetet i byggbranschen

Det har gått snart fem år sedan Gunnar Hagman tog över posten som VD för Skanska Sverige, när han i slutet av 2016 efterträdde Pierre Olofsson. Som ansvarig för ett av Sveriges största byggföretag ser han inte bara till att man bygger säkert – utan strävar även efter att få med hållbarhetsaspekten i alla delar av verksamheten. Digitaliseringen underlättar det arbetet. Men det finns även utmaningar på den fronten – inte minst när det kommer till lagstiftningen menar han. 

 

Hur kommer byggnads- och konstruktionslandskapet att se ut efter pandemin tror du? 

Det är en spännande fråga. Något som har stuckit ut är att bostadsmarknaden varit överraskande stark ända sedan förra sommaren. Det är kanske först nu som vi ser att det planar ut något. Troligtvis börjar fler och fler personer att lägga pengar på andra saker än sitt boende. Man kanske vill återvända till jobbet och spenderar inte lika mycket tid hemma. Därför svalnar bostadsmarknaden av litegrann och blir lite mer “normal” nu när pandemin klingar av.  

Sedan har många kommuner och regioner haft ansträngda finanser och fått statligt stöd. Inte bara i Sverige utan även i andra länder. Även detta måste trappas ner och då finns en risk att det kan bli en tuffare marknad. Men – alla prognoser pekar på att det blir en ganska stark ekonomi generellt i samhället och även för vår bransch. Så jag skulle säga att det ser ganska positivt ut.  

 

Efterfrågan på smarta byggnader ökar som svar på behovet av mer hållbara bostadsutrymmen. Vilka smarta byggtrender kan vi förvänta oss 2022? 

Om vi tar bostäder som exempel tror jag att fler och fler insett att man kommer att spendera mer tid hemma och jobba hemifrån i större omfattning än man har gjort tidigare. Det gör att kravet på att hitta en avskild arbetsplats i sin bostad kommer vara något man värderar högt. Givetvis ställer det krav på bra teknik likt fiberuppkoppling som man har i de flesta projekt idag.  

Tittar man sen på kontorsbyggnader tror vi på Skanska att dessa också kommer spela en viktig roll framgent, men det kommer att vara utmanande som företag att skapa samma “sköna känsla” som det är att vara hemma. Arbetsplatsen kommer att behöva vara mer som en magnet. Trevlig, energigivande, och kreativ. Mer av en mötesplats än bara ett skrivbord att sitta vid. Det är inte minst viktigt för att kunna attrahera de smartaste och bästa medarbetarna.  

Sen är det klart att hela digitaliseringsprocessen är i en form av brytpunkt nu, något som startade innan pandemin. Det har varit mycket förberedelser för smarta byggnader och göra de mer integrerade med datorverktyg. Det tror vi kommer att ta fart nu på allvar. Tekniken är så pass billig och datakraften så pass stor. Det finns även exempel på techjättar som investerar stora pengar i byggsektorn. 

 

Vilka är de viktigaste utmaningarna för bygg- och fastighetssektorn när det gäller just hållbarhet. Vad är förhållandet mellan digitalisering och hållbarhet?  

Man får se lite på kort och lång sikt när det gäller hållbarhet. Vi har satt som mål som många företag att gå ner till noll klimatpåverkan till 2045 och en halvering till 2030. Den planen bygger bland annat på att vi måste minska CO2-påverkan av stål, cement och fossila bränslen. Just cement har blivit en aktuell fråga i Sverige under sommaren som många noterat med Cementas tillstånd som nekades i Mark- och miljööverdomstolen. Det tycker jag var mycket tråkigt eftersom jag vet att Cementa fortfarande har höga ambitioner när det kommer till koldioxidneutral tillverkning av cement på Gotland.  

Cement står kanske för en tredjedel av alla utsläpp i Sverige i byggbranschen som helhet. Om vi tvingas köpa den från länder likt Kina, Turkiet eller Algeriet som verkar vara enda alternativet, ja då kommer utsläppen att vara större än de är idag. På kort sikt är jag lite bekymrad måste jag säga. Det är ganska tydligt att vår miljölagstiftning troligtvis behöver ses över och reformeras. Vi behöver göra en väldigt dramatisk omställning till grön produktion av stål, elektrifiera mer och bryta exempelvis kobolt som kan användas i batterifabriker. Alla inser efter FN:s senaste klimatrapport att tiden är knapp. 

Just när det gäller klimatet skulle jag säga att digitalisering är en förutsättning för att kunna uppnå en väldigt låg klimatpåverkan. Det är helt avgörande med ny teknik om vi ska kunna göra medvetna och kvalificerade val av material och produktionsmetoder. Inte minst för att få beslutsverktyg som gör att vi kan fatta vettiga beslut och därmed en låg klimatpåverkan. 

 

Skanska banar väg för hållbara lösningar inom byggbranschen. Är företaget på väg att nå sina hållbarhetsmål om koldioxidneutralitet innan 2045? 

Jag tycker att när det kommer till de delar som vi kan påverka själva ser vi en väldigt bra utveckling. Då tänker jag på sådana saker som att om vi har möjlighet att välja fossilfritt bränsle, ja då gör vi det. Den utvecklingen går ganska snabbt och vi har fler och fler kunder som kräver detta också. När det kommer till stål respektive cement är vi beroende av materialleverantörerna. I Sverige har vi två stora företag som vill tillverka koldioxidneutralt stål. Både HYBRIT som är ett samarbete mellan LKAB, SSAB och Vattenfall och H2 Green Steel som är ett fristående privat företag. Jag tycker det är jättespännande. Till 2045 är min förhoppning att vi kan ha fossilfritt stål till byggindustrin och att vi även kan återvinna material i en mycket större omfattning likt beton. 

Cirkulärt byggande är en superviktig del och jag tycker det går framåt. Vi har våra första helt klimatneutrala bostäder som vi har sålt i år och vi har startat ett nytt kontorsprojekt i Malmö i Hyllie som också är helt koldioxidneutralt räknat enligt vår livscykelanalys som bland annat bygger på att att tillverka solenergi i det här fallet i de här projekten som neutraliserar de utsläppen man har åstadkommit under själva byggprocessen. Vi försöker även jobba med att minimera vår påverkan ytterligare så klart genom smarta materialval och partnerskap med en del leverantörer av material. Och givetvis vill vi ha fler kunder som ställer tuffa krav på oss och som gärna vill utveckla klimatneutrala byggnader tillsammans med Skanska. Vi gör inte det här helt själva – det är en insikt som vi har.  

 

Det låter verkligen som att det går framåt och att framtiden ser positiv ut. 

Man måste vara positiv tycker jag. Man får inte blunda för att det finns utmaningar längs vägen som är ganska stora. Men redan idag finns de tekniska lösningar som krävs. Sen är frågan mer om vi kommer att hinna ställa om i den hastighet som krävs. Jag är själv personligen bekymrad och många med mig så klart. Det känns som att klimatförändringarna går fortare än vad forskare och experter har trott i sina scenarier och det känns bekymmersamt. 

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Sharareh Edström: Energizing Future Transport and Value Chains

At the core of every efficient supply chain is well-planned logistics and transportation. The future of transport is eclectic, and gas carries the most important role in this transition to achieve sustainability while maintaining competitiveness. But to make the transition smooth, I call for increased transparency, cross-industry partnerships, and for a more comprehensive view on the sustainability of value chains, says Sharareh Edström, Director of Traffic Sweden, Gasum.  

As one of the leading producers of biogas and handler of biodegradable waste in the Nordics, Gasum has built a reliable gas infrastructure that secures the availability of gas in the Nordics. This infrastructure covers the full value chain from production of biogas to transport and distribution.  

“Gasum has contributed tremendously to the development of the market and invested a lot to make sure it’s easier for transporters to convert to gas”, Edström says. 

Today, sustainability is the driving force for many players, and many more are joining in. The regulatory environment is steering and supporting cleaner solutions. The customer demand for low emission solutions has increased rapidly. And as things evolve fast, this also leaves some conceptions outdated. 

 
Grow your network: Meet Sharareh Edström and other forward-thinking leaders at the Nordic StrategyForum Supply Chain and Procurement in Sweden.
 

Sufficient, sustainable and economically feasible 

 

The key questions around biogas usually focus on availability and costs. Will there be enough gas to satisfy the demand, does it require additional investments in infrastructure? According to Edström, these questions were very topical in the transport sector just a few years ago. Conversion to gas was seen as complicated and expensive. As these fears have diminished with Gasum´s investment plans to continuously grow the filling station network, the question of continuity still lingers – will the gas run out?  

“There is this misconception, that there wouldn’t be enough feedstock to produce sufficient amounts of biogas for traffic. There is a realistic feedstock potential in the Nordics to make 30 TWh worth of biogas. We’re aiming to supply 4 TWh of biogas to the market through our own and partners’ production in 2024 already. This amount would cover the yearly fuel need of around 10 000 heavy-duty vehicles. In addition, the gas infrastructure enables the utilization of synthetic methane and power-to-gas solutions in the future, which significantly expand the availability of renewable gas”. 

In addition to Gasum’s own initiatives, there is also support from the Swedish government’s behalf to increase the production of biogas. As part of the Klimatklivet, a support initiative for local and regional investments, the Swedish government wants to introduce production support for biogas: 500 million kronor next year and then 700 million kronor annually until 2040. 

Edström says that customers recognize gas as a smart and cost-efficient investment, knowing there will be continuous investments in the infrastructure, which also creates more stable prices than the fossil alternatives. 

In Sweden, there are a total of 27 stations, of which Gasum has opened 17 liquefied natural gas filling stations for long haul gas trucks and many more are to be built in the nearest future. 

In 2020, sales of liquefied gas increased by 230%. The trend continues, not only in Sweden but in the neighboring Nordic countries and the rest of Europe, as well. 

 

A need for a transparent and holistic view – taking action where it matters 

 

Edström says, that the sustainability discussion on supply chains occasionally tends to lack a holistic view, and thusly a certain part of the chain might get a proportionately larger focus than it should, referring to transport emissions.  

“Today, we’re talking about the whole value chain, therefore it doesn’t make sense to focus on just one part of it – the tailpipe. We need to look at the whole value chain when it comes to the life cycle. From the fertilizer to the food being cropped, to the final product sitting on the table”. 

Gasum offers expert services for heavy transport, maritime and industry, making the company active in the whole value chain. Renewable gas offers a new link between the industries. 

“Gasum’s liquid biogas is produced from biodegradable waste such as manure, food waste, damaged crops and process water from the industry. During the production, we also get biofertilizers, that can be used to grow new crops in the Swedish fields. When you choose liquid biogas, you become part of the circular economy “, Edström says. 

“I would like to have more transparency than what we have today. For example, cross-industry emission savings should be much higher appreciated than tailpipe emissions. We need to redirect our efforts much easier to see a product’s true lifecycle emission”, she adds. 

 

Partnering up across industries 

 

“I would like to see industries collaborating to integrate our value chains and visualize how circularity is bringing exponential effects not just in transport but in agriculture and waste management as well. Once we get these industries working seamlessly together, then we will see the sustainable benefits and reach our ambitious national goals”. 

The key to a better understanding is to link between the different industries, fuel, industries with organic waste and agriculture, and make the benefits of circularity visible and understandable for the larger public. 

In addition to aiming for better transparency, Edström advises companies to really study their value chain to identify where the most significant emission savings can be made and take action there to minimize the impact on our climate. 

“Companies need to be very clear on where they’re emitting emissions. It very seldomly is the last mile that is the problem. There is a need to recognize where the emissions lie and take action on a global, and a national level.” 

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Sustainable Manufacturing: Do the Opportunities Outweigh the Challenges?

Supply chain resilience is the top business priority for manufacturing companies in 2021. This finding is no surprise as investors have been putting more effort into implementing sustainability programs. Kemira’s Senior Vice President of Global Supply Chain, Jori Fabricius, states that “no company today can say that sustainability does not have a role in their business strategy.”  

There is pressure on the manufacturing industry to ramp up sustainability efforts not just from an environmental standpoint, but in terms of readiness and continuity. This article provides an overview of the opportunities and challenges in four key areas related to sustainability — green manufacturing, digitalization and technology, smart factories, and talent management.

 

Green Manufacturing  

 

According to Fictiv’s 2021 State of Manufacturing Report, 40% of respondents are increasing investments in sustainable manufacturing to reduce carbon emissions and slow down future environmental degradation. The spotlight is on companies with textile-based products, where the environment bears the brunt of unsold inventory. Here’s an alarming statistic: 20% of the 100 billion garments produced annually are buried, shredded, or incinerated.  

Fortunately, companies like Vestre want to prove that sustainability is not only necessary but profitable. 

“It is possible to operate a profitable manufacturing firm in Scandinavia. It is possible to build a business based on longevity and sustainability. It is possible to self-generate sufficient solar power for all operations. It is possible to phase out materials that are harmful to the environment.”  

 

Opportunities:

  • Lean manufacturing is the gateway to zero-waste operations, using AI and IoT to transform green considerations into lean initiatives. For example, the Saturn Kanban implementation saved General Motors 17 tons of air emissions and eliminated 258 tons of solid waste per year.  
  • On-demand manufacturing makes supply chains shorter and more efficient by eliminating unnecessary production and reducing harmful waste. Also known as cloud manufacturing, the market is predicted to reach $112 billion by 2024.  
  • Circular economy frameworks extend the lifecycle of products and can be applied to every stage of the value chain. IKEA leverages AI and data analytics to identify the best locations for returned items so that they can be recycled and sold instead of ending up in a landfill.  

Challenges:

  • Hurdles in traceability and transparency throughout the supply chain, as well as different definitions of sustainability across cultures, can jeopardize sustainability efforts. Organizations need to communicate their sustainability goals with suppliers and partners alike.  
  • Lack of education among consumers on the environmental or social consequences of their purchases can render sustainable efforts useless. 
  • Missing infrastructure stands in the way of sustainable efforts. Replacing an entire supply chain is a mammoth task and does not happen overnight. For example, shifting from oil-based materials to bio-based ones. 
  • Sustainability is a costly investment. Therefore, leaders must implement change management carefully, considering regulations and investors’ needs.  
 

Digitalization and Tech Investments  

 

A study by IBM and The Manufacturer states that 67% of manufacturers have accelerated digital investments due to COVID-19. Digitalized processes provide real-time information and relevant metrics to help manufacturers with decision-making. Smart tech adoption has been delivering strong results in terms of cost savings, waste reduction, and productivity. The top five technologies according to manufacturers are cybersecurity, advanced data analytics, automation, IIoT, and AI.  

 

Smart Factories  

Smart factories are the heart of smart and sustainable manufacturing. No smart factory is alike as the combination of technologies differs by manufacturing approaches and industry. Therefore, smart factories are hyper-flexible, self-adapting, and scalable manufacturing entities.  

Examples of notable smart factories are HP’s Smart Manufacturing Application and Research Centre (Smarc) in Singapore and the U.S Clean Energy Smart Manufacturing Innovation Institute (CESMII). Both factories are fortified with technologies such as 3D printing, robotics, and analytics to develop new solutions and standardize processes across a global network of operations.

 

Opportunities:

  • End-to-end operations visibility allows traceability of products from manufacturing to delivery. This also allows for real-time and remote asset monitoring.  
  • Machinery utilization management with maintenance predictability reduces downtime. Equipment and products can be tested for malfunction and quality control. This results in fewer errors and human intervention for machine repair.  
  • More efficient planning for consumer demand with accurate material flow and assembly line processes is made possible with machine-driven data collection.  
  • Safety and optimization of working environments are improved with robotics and remote tasking. Automated processes allow operations to continue despite workforce disruption during unprecedented events like COVID-19.

Challenges:

  • Manufacturing is struggling to adopt smart technologies within the supply chain. The top five barriers that stand in the way are time and resources, securing funding, company culture, implementation, and finding the right technologies.
  • In terms of data collection and analytics, manufacturers are still working on finding cost-efficient options that fit their organizations.
  • Factories that use digital twins as part of their existing processes have to mitigate challenges in the five natural laws of digitalization —  people, lean methods, master data, connectivity, and open ecosystems.  
 

“These are the five challenges that you have to master before you can even take the next big leap with AI. Without that, even a digital twin is useless. If there is no basis for this, then the digital twin is lost.” — Johann Hoffman, founder of ValueFactoring® at MR Maschinenfabrik Reinhausen GmbH.  

 

Talent Management

 

The manufacturing industry has been majorly affected in the last 18 months and work arrangements are unlikely to return to what it was before. According to Deloitte’s 2021 Manufacturing Industry Outlook, manufacturers are finding ways to reshape the workforce and their tasks to manage disruption and uncertainty. An agile and skilled workforce is a key element of a sustainable manufacturing organization.  

 

Opportunities:

  • Manufacturers can develop a talent ecosystem to incorporate digital capabilities in the workforce. A talent ecosystem allows collaboration with external partners to build stronger talent pipelines for manufacturing. For example, a partnership between a manufacturer and a technical school with train-to-hire programs and role-specific training. 41% of manufacturers have already started forming new relationships to develop robust talent ecosystems.
  • Retraining and upskilling programs for existing employees to fill ‘middle-skill’ roles that demand expertise in robots, cobots, and other forms of automation. These programs will help manufacturers reduce furloughs and increase employee retention and engagement. 

Challenges:

  • Unwillingness to change may be one of the pitfalls for traditional manufacturing companies. From the factory floor to top-level management, the adoption of new skills and their importance must be addressed. 28% of manufacturing executives state that building new skills to match evolving work environments is one of their biggest challenges.  
  • The number of specialized nonstandard roles will increase in tandem with the organization’s digital capabilities. These roles will require advanced flexibility and problem-solving skills. Manufacturers are struggling to fill these roles, as evidenced by the average monthly job postings of 400,000 in the U.S. alone.  
 

Do the opportunities for sustainable manufacturing outweigh the challenges?

 

The answer is a hard yes. Supply chains are still reeling from the impacts of the pandemic and face new hurdles every day. Sustainable manufacturing is a viable solution for resilience and readiness, offering a much-needed ray of hope to manufacturers around the globe.

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Smart Manufacturing: Die Zukunft der Industrie?

Johann Hofmann, Founder von ValueFactoring® bei MR Maschinenfabrik Reinhausen GmbH zählt mit über 30 Jahren Berufserfahrung als Experte im Bereich Industrie 4.0 und Digitalisierung. Schon zu Beginn seiner Karriere hat er für sein Unternehmen den digitalen Weg bereitet und ein Assistenzsystem für die digitale Hochleistungsfertigung entwickelt, für das er mit dem Industrie 4.0 Award ausgezeichnet wurde. 

Der charismatische Maschineningenieur hilft heute EntscheidungsträgerInnen dabei, Sicherheit und Know-how rund um Digitalisierung und Industrie 4.0 zu erhalten. In diesem Interview zeigt er uns auf, wie der Stand im Smart Manufacturing heute in Deutschland ist und wo es noch Verbesserungsbedarf gibt. 

 

New Normal in der Industrie 4.0

Wie hat der aktuelle Normalzustand, das „New Normal“, die Aussichten für Industrie 4.0 verändert? Sind die Hersteller auf dem richtigen Weg in Bezug auf die nötige Digitalisierung?

 

Es geht um Hersteller von vernetzungsfähigen Produkten. Die Werkzeugmaschine oder der Werkzeugschrank ist zum Beispiel ein vernetzungsfähiges Produkt. Diese Produkte sind auch als Assets im Sinne von Industrie 4.0 bekannt. Und ebendiese Assets müssen zu Industrie 4.0 Komponenten werden, damit das Ganze funktioniert.

Dazu braucht jedes Asset eine Verwaltungsschale. Die Verwaltungsschale ist im Prinzip Teil des Digital Twins (Digitaler Zwilling). Damit wird die Vernetzung vereinfacht, so dass wir von diesem „Gefrickel“ wegkommen, das beim Vernetzen von Dingen oftmals entsteht. 

Beim Drucker hat das ja wunderbar funktioniert. Wenn wir heute unter Windows 10 einen neuen Drucker installieren, steckt man den ein und der installiert sich von selbst. So etwas stelle ich mir auch bei Werkzeugmaschinen vor. Doch dazu müssen die Hersteller von diesen vernetzungsfähigen Produkten eine Industrie 4.0 Komponente ausliefern, also nicht nur das Produkt selbst, sondern auch den digitalen Zwilling, wie die Verwaltungsschale. Dann sind sie auf dem richtigen Weg.

 

Veränderungen durch das New Normal

Hat das New Normal, dieser neue Normalzustand, in den letzten Monaten viel verändert oder war das von Anfang an Thematik?

 

Worüber ich eben gesprochen habe, ist nicht die Wirklichkeit, sondern eine Wunschvorstellung. Das muss sich erst Schritt für Schritt über alle Asset-Hersteller ergeben. Die Hersteller von vernetzungsfähigen Produkten halten sich aktuell zurück, weil es noch keine Software gibt, die damit umgehen kann. Gleichzeitig halten sich die Software-Hersteller zurück, weil es noch keine vernetzungsfähigen Produkte gibt, die eine Verwaltungsschale mitbringen. 

Da muss die Industrie 4.0 Plattform noch richtig Druck auf die gesamten Hersteller ausüben und ein Regelwerk kreieren, damit das in Gang kommt. Dieser „Normalzustand“ ist also noch nicht da, ist aber ein „gewünschter“ Normalzustand irgendwann in der Zukunft.

 

Wie fortgeschritten ist dieser Plan denn schon? Kannst du uns eine Einschätzung geben?

 

Das ist branchenabhängig. Unterschiedliche Branchen sind also unterschiedlich weit. Und ich habe das Gefühl, dass die Branche, in der ich unterwegs bin, die diskrete Fertigung, am weitesten hinterher hinkt. Aber das ist nur eine persönliche Einschätzung (lacht).

 
Wünschen Sie sich weitere aufschlussreiche Diskussionen? Treffen Sie Johann Hofmann und andere BranchenexpertInnen auf unserer nächsten Veranstaltung IndustryForum Smart Manufacturing.
 

Zukunftsausblick: Augmented Reality, Wearables und Cloud

Gibt es andere aufstrebende Technologien, die Hersteller im Auge behalten sollten? Welche Herausforderung gibt es bei der Einführung solcher Technologien?

 

Da fallen mir auf einen Schlag drei Technologien ein. Zum einen wären das die Datenbrillen, also Augmented Reality über Datenbrillen. Diese Technologie kränkelt aber ein bisschen. Wir hatten vor Jahren schon mal einen Versuchsballon zum Umrüsten von Maschinen über eine digitale Brille gestartet, bei der man den Arbeitsraum dann digital sieht. Das lief jedoch noch nicht ganz reibungslos, deshalb wurde das Projekt erstmal auf Eis gelegt. Trotzdem habe ich dahingehend eine große Erwartungshaltung. Mit jeder neuen Version einer Datenbrille wird es sicherlich besser und umfangreicher. 

Überholt werden könnte diese Technologie von Wearables, also am Körper tragbare Computer, wie beispielsweise eine Smart Watch oder Datenhandschuhe. Hier wird sicherlich eine Zeit kommen, bei der der Meister durch eine Fertigungshalle läuft, dabei auf seiner digitalen Uhr Informationen von einer Werkzeugmaschine bekommt, die gerade irgendein Problem hat. Das wird bestimmt Standard in der Zukunft werden. 

Die dritte Technologie ist die Cloud. Vor Jahren war ich ein größerer Fan der Cloud. Das hat jetzt ein bisschen abgeflacht, weil all unsere Kunden in der Fertigungsbranche Angst vor der Cloud haben. Doch das Thema sollte unbedingt weiterverfolgt werden. Es gibt Branchen, die sind komplett in der Cloud, zum Beispiel Amazon. Aber genau in unserer Branche hinkt man da ein bisschen hinterher, wir müssen aber am Ball bleiben.

 

Die Wichtigkeit von Digital Twins im Smart Manufacturing

Der Digital Twin ist bei den Herstellern immer beliebter geworden um mit Start-Ups wie Tesla Schritt zu halten. Wie sollten ältere, alteingesessene Fabriken die Einführung eines Digital Twins angehen?

 

Aus der Sicht des Anwenders ist die Frage einfach zu beantworten. Wenn eine Fabrik etwa eine neue Maschine, einen Werkzeugschrank oder ein anderes Produkt bestellt, sollte sie vom Hersteller einen Digital Twin fordern. Es soll also nicht nur die Maschine, sondern auch der digitale Zwilling geliefert werden. 

Und das kann ich vom Hersteller verlangen, da ich als Käufer auch eine gewisse Macht habe. Wenn ich diese Macht nutze, dann werden alle Hersteller mit der Zeit ganz sachte dazu gezwungen, den digitalen Zwilling zu liefern. Und daran scheitert es ja momentan. Dazu fällt mir ein Beispiel ein: 

Vor ca. 15 Jahren, als ich die Werkzeugdatenbanken aufgebaut habe, hatten wir kein Bild bzw. eine Grafik dazu. Wir mussten nebenbei Studenten beschäftigen, die uns die Grafiken für die Werkzeuge gezeichnet haben. Damals habe ich unseren Einkäufer also darum gebeten, bei jedem Kauf in den SAP Datensatz reinzuschreiben, dass das Werkzeug UND eine Grafik geliefert werden müssen. Wenn eines davon nicht geliefert werden sollte, zahlen wir auch nicht. 

Natürlich war das damals in der Werkzeugbranche erst einmal ein Riesenaufschrei, ist heute aber Standard. Wer heute ein Werkzeug kauft, bekommt selbstredend eine Grafik dazu. Jeder der also Produkte kauft, kann beim Hersteller Druck aufbauen. Jetzt jedoch müssen wir nicht nach der Grafik verlangen, sondern nach dem Digital Twin. Wenn das jeder fordert, kann man sich den Zugzwang ausmalen, der plötzlich bei den Herstellern herrschen würde.

 

Das fehlt also noch. Aber ist es auch umsetzbar und realistisch?

 

(Lacht) Wir müssen das halt erst einmal probieren. Es gibt ja viele Hersteller, die bereits einen Digitalen Twin liefern, aber teilweise noch nicht vollständig. Die Industrie ist da auf jeden Fall auf einem guten Weg, aber eben noch nicht am Ziel. Um dieses Ziel jedoch schneller zu erreichen, können Einkäufer diesen Druck bei den Herstellern aufbauen.

 

Die fünf Naturgesetze der Digitalisierung

Was sind die größten Herausforderungen für Fabriken bei der Anwendung von Digital Twins als Teil ihrer bestehenden Prozesse? Was können Hersteller tun, um diese Herausforderungen zu meistern?

 

Ich beschäftige mich mittlerweile seit 33 Jahren mit der Digitalisierung. Dabei haben sich immer die gleichen Herausforderungen herauskristallisiert. Wenn ein Projekt gekränkelt hat oder gescheitert ist, war das immer eine von fünf Herausforderungen, die nicht vernünftig angepackt worden ist. Diese fünf Herausforderungen nenne ich die „fünf Naturgesetze der Digitalisierung“. Diese muss man abarbeiten, damit solche Projekte auch gelingen können. 

Das erste Naturgesetz ist: Menschen mitnehmen. Klingt erst einmal ganz banal, aber wenn die MitarbeiterInnen nicht wollen, wird das Projekt immer scheitern. Man muss Menschen also von dem Projekt begeistern. Da gibt es eine Metapher, die man vor allem auf Konferenzen häufig hört: Wenn du ein Schiff bauen willst, erzähl den Leuten nicht, was sie alles für den Bau benötigen. Erzähle ihnen nur von der Schönheit des Meeres. Dann wirst du auch das beste Boot bekommen, das du dir vorstellen kannst. 

Das zweite Naturgesetz ist: Wenn man einen schlechten analogen Prozess digitalisiert, dann bekommt man einen noch schlechteren digitalen Prozess. Analoge Prozesse müssen also schon vorher schlank und einfach gemacht werden. Dazu eignen sich LEAN-Methoden hervorragend. Also LEAN einführen und leben, das ist das zweite Naturgesetz der Digitalisierung und somit auch eine Herausforderung.

Das dritte Naturgesetz sind Stammdaten. Viele Projekte scheitern an unvollständigen Stammdaten. Diese müssen vollständig und fehlerfrei sein. Wenn du beispielsweise mit einem Navigationssystem durch Deutschland fährst, dann sind die Landkarten die Stammdaten. Wenn ich nun in ein neues Industriegebiet fahre, und mein Navi diese neue Landkarte noch nicht kennt, dann fehlen mir hier die Stammdaten. 

Das vierte Naturgesetz ist: Die Konnektivität im Brown-Field herstellen. Wir leben und arbeiten ja alle in einem Brown-Field. Green-Field wäre eine nagelneue Fabrik mit nagelneuen Maschinen und Werkzeugen. Doch das hat keiner. Wir alle haben einen historisch gewachsenen Maschinenpark. Wir haben also einen maschinellen Zoo an unterschiedlichen Maschinen, die 24 Stunden am Tag und 365 Tage im Jahr stabil vernetzt sein müssen. Wenn ich diese Konnektivität nicht erreichen kann, kann ich alles andere auch nicht schaffen. 

Das fünfte Naturgesetz ist: Offene Ökosysteme. In unserer Branche soll man nicht nach einer eierlegenden Wollmilchsau suchen, denn die ist Illusion. Die Lösung sieht so aus: Die digitale Fabrik besteht aus verschiedenen, eigenständigen Öko-Systemen, in deren Zentrum ein planendes META – System sitzt, Stand heute ist das das ERP System. Unterhalb dieser META Ebene befinden sich die jeweiligen ÖKO Systeme mit ihren domänenspezifischen Abläufen und Prozessen. Wie z.B. eine Feinsteuerung, ein Warehouse System, ein CAQ System, ein PLM System, ein Shopfloor System, etc. Die Interoperabilität dieser Systeme ist dabei ein entscheidendes Kriterium für deren Auswahl. Die richtige Orchestrierung der einzelnen Ökosysteme bringt den echten Mehrwert der Digitalisierung.

Das sind die fünf Herausforderungen, die man erst einmal meistern muss, bevor man überhaupt mit der KI den nächsten großen Sprung machen kann. Ohne das bringt auch ein Digital Twin nichts. Wenn es dafür keine Basis gibt, dann ist der Digital Twin auf verlorenem Posten.

 

Nachhaltigkeit in der Industrie 4.0

Aufgrund von Megatrends, wie dem Klimawandel, ist die Nachhaltigkeit für die Infrastruktur von größter Bedeutung. Welche wichtigen Änderungen nehmen Hersteller vor, um mit den Nachhaltigkeits-Vorschriften Schritt zu halten?

 

(Lacht) Jetzt hast du ein Riesenthema aufgemacht. Was heißt denn Nachhaltigkeit überhaupt? „Die natürliche Regenerationsfähigkeit der beteiligten Systeme gewährleisten“. Am Beispiel der Forstwirtschaft heißt das etwa, nicht mehr Holz zu fällen als nachwachsen kann. Schneide ich einen Baum ab, muss ich einen Baum anpflanzen, der auch irgendwann abgeholzt werden kann. Das ist Nachhaltigkeit. 

Aber was bedeutet das für uns in der Produktion? In den Produktionshallen würde das bedeuten, dass nicht mehr Rohstoffe verbraucht werden als Rohstoffe nachwachsen können, wie beispielsweise seltene Erden, Erdöl oder Eisenerz. Das geht aber nicht. Diese Aussage („geht nicht“) verwende ich äußerst selten. In diesem Fall hat das allerdings Millionen an Jahren gebraucht, um überhaupt zu entstehen. Die ganze Nachhaltigkeits-Thematik ist in der Fertigungsbranche also eher scheinheilig, weil es sowieso nicht geht. 

Wir beuten die Erde aus, bis sie kollabiert. Punkt. Das ist das Problem, das wir alle auf diesem Planeten haben. Was sollen die Hersteller jetzt also machen, um einigermaßen etwas richtig zu machen? 

Sie könnten in energieeffiziente Anlagen investieren, damit auch der CO2-Ausstoß reduziert wird. Auch könnten Reisezeiten minimiert werden. Durch die Coronavirus-Pandemie habe ich so viel Reisezeit eingespart, das kann man auch nach Corona noch beibehalten. Zudem sollte Home-Office – soweit möglich – auch nach der Pandemie ermöglicht werden. So wird jeden Tag der Weg ins Büro gespart, und damit auch Sprit. 

Ein Beispiel: Manche fertigen ein goldenes Lenkrad mit Lenkradheizung, während andere einen Tesla bauen. Nicht das goldene Lenkrad sollte optimiert werden, sondern es sollte an den richtigen Stellen weiterentwickelt werden. Aber ob das Elektroauto für den Klimawandel wirklich so gut ist, ist eine völlig andere Diskussion. 

Eine weitere Methode, die bei der Nachhaltigkeit helfen könnte, wäre die Just-in-Time-Produktion. In meinem Studium im Jahr 1989 wurde das sehr stark thematisiert. Hier heißt es: Das beste Lager ist kein Lager. Der beste Transport ist kein Transport. Es könnte also direkt in die Montage produziert werden, statt erst einmal ins Lager und von dort aus wieder weiter transportiert zu werden. Das ist zwar eine uralte Methode, aber die könnte durchaus nachhaltig sein.

 

Ist das eine realistische Methode? Setzen dies Hersteller vielleicht sogar schon um?

 

Die Automobilindustrie setzt das großartig um. Sitzhersteller zum Beispiel fahren ihre Sitze in kein Lager, sondern direkt an die Montagelinie im Autowerk und vor dort werden sie Just-In-Time montiert. So gut, wie das die Autoindustrie hinbekommt, bekommt das keine andere Branche hin. Da gibt es für unsere Branche noch viel Optimierungs-Potenzial.

 

Richtig auf die Zukunft vorbereiten

Inwiefern können Zukunftsszenarien EntscheidungsträgerInnen helfen, ihre Pläne zu verfeinern und Strategien zu entwickeln, um sich auf die Zukunft vorzubereiten?

 

Zukunftsszenarien helfen EntscheiderInnen immer nur dann, wenn sie die Zukunft auch richtig vorhergesagt haben. Sonst kann es sein, dass Pläne entstehen, die das Ganze nicht verfeinert, sondern ruiniert haben. Wenn ich von einem komplett falschen Szenario ausgehe, dann treffe ich ja die komplett falschen Entscheidungen. 

Dazu fällt mir immer der Komiker Karl Valentin ein. Er hat folgendes gesagt: „Prognosen sind schwierig, besonders wenn sie die Zukunft betreffen“ (lacht). 

Aber bei Zukunftsfragen kann ich trotzdem eine Hilfestellung geben, wie beispielsweise die fünf Naturgesetze der Digitalisierung. Diese haben sich über Jahrzehnte als Basis für richtige Entscheidungen bewährt und haben auch noch in der Zukunft Gültigkeit. Wenn man sich daran orientiert, kann man eigentlich keinen großen Fehler machen.  Wenn Sie diesen QR-Code entschlüsseln, dann finden Sie dazu eine wertvolle Hilfestellung, in der meine Erkenntnisse aus 33 Jahren Digitalisierung komprimiert dargestellt werden: 

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Jori Fabricius: How Kemira Utilized Digitalization to Build a Resilient Supply Chain

After a disruptive year, supply chain & procurement companies are still reeling from the impacts of the pandemic. They continue to face obstacles in transportation and logistics, rising prices of raw materials, and shifts in customer demand.  

Supply chain leaders have realized that digitalization and sustainability efforts need to be prioritized to provide flexibility to respond to unforeseen challenges. Jori Fabricius, Senior Vice President of Global Supply Chain Management at Kemira, shares his insights on the post-pandemic supply chain landscape and its effects on tech adoption, leadership and more.  

 

The pandemic has accelerated digital transformation efforts in supply chain and procurement. What tech adoptions have been the most effective in mitigating the disruptions presented by the outbreak? 

There are many aspects to this, but what immediately comes to mind are control tower tools, visibility enabling tools and processes that support fact-based alignment across functions. The idea is to bring transparency to deviations as soon as possible and enable fast mitigations. 

  • Real-time execution controls (day to day): These were implemented at Kemira two to three years ago. The controls are nature operative and used in placing replenishment purchase orders and securing material availability. They are connected to visibility tools and alerts in real-time, providing personal dashboards that show performance and risk incidents to operators as they are happening. The addition of AI allows operators to supervise product quality and connect the dosing of chemicals.  
  • Planning tools (weekly or monthly, mid-term): These are extremely valuable as they provide optimized plans to mitigate potential or current constraints, and to enable fast cross-functional problem-solving. In Kemira, we started the implementation of upgrading the planning environment globally, which has been successfully taken into use for supply planning. 
  • Visibility tools (long-term): This is related to general aspects of performance — a good example is visualizing Kemira’s distribution networks with enriched built-in KPIs. This allows us to visually capture recent changes such as distribution cost performance, distribution distances, shipments sizes and transportation emission calculation.  

All these tools are necessary to drive performance and to enable faster, better decisions and implementations. This saves time, improves service and creates new business opportunities. Another thing to note is that these tools are highly dependent on cleansed, credible master data and one common enterprise resource planning (ERP) platform.  

 

In your opinion, how has digital transformation affected leadership roles in supply chain and procurement? 

Over my 30-year career, I think there has been a continuous change in the supply chain in terms of technology and science. In fact, the term ”supply chain management” did not exist before 1982 even though the concept has been around long before that.  

When digital transformation cracked the nut of “the distance dilemma”, the world became a smaller place and brought different cultures together. With more companies centralizing teams from their physical locations, supply chain leaders need to be culturally sensitive and emotionally intelligent to build engagement across diversified teams. 

Supply chain leaders also need to understand other functions better. They can no longer work in isolation. To be efficient, they need to gain knowledge on multiple industries and professions, and learn a number of skills. Going back to the tools I mentioned earlier, they are useless without analytical skills. Leaders must be adept at using IT tools because these are business-critical capabilities.  

 

Sustainability is a core part of Kemira’s business strategy and operations. Why is there an urgency for organizations to embrace sustainability and what are its long-term benefits? 

At Kemira, we can proudly say that our value system supports sustainable world thinking. One of our values is ”We care for people and the environment.” Having this value makes for a strong foundation for future sustainable initiatives.  

Other than values, we need to understand the different players around us such as our customers, investors, regulators, resource market and employees. In the last five years, investors have been putting more effort into implementing sustainability programs. No company today can say that sustainability does not have a role in their business strategy.  

In terms of recruitment, I think the fight for talent will only grow bigger as we go along. This is because the younger generation will choose companies that reflect their own values, and sustainability is a topic that comes up very often during Kemira’s job interviews.  

What do I think are the long-term benefits? I would say it is very difficult to work in this world if you are not a good citizen. Regulators, Customers and Investors for sure are moving in a sustainable direction which not only supports good citizenship but is also a ticket to a profitable business.   

 

What are the biggest obstacles when it comes to maintaining sustainability in all levels of the supply chain?  

It is fair to note that the obstacles are partly related to behavior and an individual’s value systems. It is difficult to change as culture and values always beat a good strategy. 

Because of that, I would say change management is the most difficult part as transforming current value systems may not happen quickly. Another hurdle is missing infrastructure – replacing an entire supply chain is a major change and does not happen overnight. For example, shifting from oil-based materials to bio-based ones. There is bound to be some resistance as current infrastructures have been in place for decades. Hence, leaders must implement change management carefully, taking into account regulations and investors’ needs.  

“It is easier to steer a boat that is moving and floating,” rather than one that is sinking.  

 

What can business leaders do to future-proof their supply chain and procurement functions in order to tackle unprecedented challenges? 

Organizations must be ready for a heavier fight for resources and competencies in the future. There will be market upsides and downsides, especially with leaner pipelines. Additionally, they must always develop new digital capabilities that drive business value and build engagement.  

Business leaders must also look for the best talent to join their companies but recognize that it will be a challenge. Engaged and flexible employees are role models and potential future leaders. They are usually the best people to secure an organization’s resilience and continuity.  

 

What are emerging supply chain trends in 2021 and 2022? 

I believe there are two main trends supply chain leaders should look out for:  

  • The new order after COVID-19: After 1.5 years of living in isolation and running operations, leaders need to reflect on the lessons learned from the pandemic. It has been no doubt a tough time for organizations. However, it is time to truly understand the phenomenon itself and to build a sustainable working model. 
  • Digitalization remains strong: There will be more choices for digital applications in operative work, like pricing tools. Procurement and sourcing platforms will also accelerate B2B integration and collaboration, and support building communities.  
 

*The answers have been edited for length and clarity.