Henkel Adhesive Technologies is globally leading in the markets for adhesives, sealants and functional coatings. The products and solutions are an integral part of uncountable consumer and industrial goods in more than 800 industry segments and, for example, help reducing the weight of cars, improving the performance of smartphones and supporting the food safety in packaging applications. With about 140 production sites, more than 200 warehouses and around 70,000 products the Henkel business unit is dealing with a complex network in production and logistics. To optimize operations, logistics and material flows and to generate best customer value the Global Operations and Supply Chain team located in Amsterdam is increasingly using the opportunities of digitalization such as Artificial Intelligence, smart planning tools and Smart Factory concepts.
Smart Factory concept
Smart Factories allow to simulate production processes, and therefore identify quality risks even before they occur. They can display the full picture, consisting of the real-time data that connected machines are sending. Algorithms are able to bundle and analyse this huge amount of data within seconds, so companies know exactly what happens at every single stage of the process. This significantly improves both, the chance to run processes more precisely in the first place, and to dynamically adapt the operations whenever necessary.
Henkel Adhesive Technologies continuously upgrades systems and machines of existing sites with Industry 4.0 functionalities. Therefore, the business unit has developed a web-based platform that is currently running at 14 sites across Asia Pacific and the India, Middle East and Africa region. It features a set of modules with specific digital capabilities. Site managers can select the digital solutions that best fits to their specific situation and thatcreate most value. As the feedback is very positive, Adhesive Technologies plans to bring all major sites worldwide onto the platform by 2022.
To further digitize its operations, Adhesive Technologies has integrated holistic Smart Factory concepts into the planning and construction of all new sites globally. The most recent example is the state-of-the art manufacturing facility near Pune, India. The end-to-end digitalisation of the plant operations enables a wide range of Industry 4.0 processes and meets the highest standards for safety, efficiency and sustainability.
Digitalization enhancesefficiency and service level towards the customer
By digitalising supply chain logistics, Henkel creates the basis to stay up to date with market trends, improve the service level to its customers and gain efficiencies to stay competitive in the market. Using data-based technologies such as simulationsand track-and-trace software, the business unit enhances transparency along the supply chain and paves the way for further improvements and new services.
Warehousing: Re-arranging a grown structure
For decades, supply chain managers planned a warehouse to be as close as possible to the company’s production sites. Nowadays, for Henkel Adhesive Technologies the ideal location is primarily determined by market requirementsand is consequentlyrather close to the customer’s plant. In this way, just-in-time orders can be handled while transportation costs are reduced.
Henkel also follows this approach, using a smart software called Supply Chain Guru to rebuild the grown warehouse structure. The tool creates a virtual image of the network, a so-called digital twin, which allows the team to simulate different scenarios. In addition, integrated algorithms are able to process complex mathematical tasks. It might for example calculate the optimal distribution network for a product, taking into accountlimited storage capabilities at specific sites,as well as customer requirements for lead times. These simulations are useful to discuss the pros and cons of different options and to plan roles and responsibilities.
"Henkel creates the basis to stay up to date with market trends, improve the service level."
Since 2013, the data-based optimisation of material flows led to a shift in Henkel’s warehouse landscape, with 70 new warehouseopenings and 120 closures. The new distribution centre in Bönen, Germany, is the latest milestone on the way to establish a network with maximum capacity utilization. It’s Henkel’s biggest warehouse worldwide, with an area of 57,000 square meters and 300 employees. On average, 70 trucks per day are handled, predominantlydelivering to customers in Germany and Western Europe.
Transportation:Always on track
Daily transport logistics can also be further optimised with the help of intelligent software solutions. Henkel’s supply chain specialists use a Transport Management System (TMS) for this purpose. The tool retrieves the delivery orders created in SAP and consolidates them as efficiently as possible. Algorithms are also used here, in order to calculate multi-pick ormulti-drop options, as well as a combination of both. The benefits are obvious: Transport planners optimise the consolidation of loads and achieve the best possible truck utilization, reducing CO2 footprint and costs. Moreover, the tool enhances cost transparency, assigning transportation costs to every single transport planned.
In addition, Henkel is currently testing a track-and-trace solution for trucks in North America. With its live-tracking function, the tool allows employees across functionsto see the exact arrival times of each truck. This functionality helps to anticipate delays and, as a consequence, improves the customer experience through faster and more accurate information, as well as planning of potentially needed actions, such as the need for express shipments. Track-and-trace solutions also enable new data-based insights, providing planners with information about load-volumes and on-time performances by hour.
Results: Significant cost savings
Combining multiple smart software solutions to modern planning tools, Henkel Adhesive Technologies realised both economic and ecological benefits across the global supply chain. Overall, logistics contributed with substantial productivity gains which helped to fully compensate inflation over several years.
Furthermore, Adhesive Technologies reduced its carbon footprint per ton sold by 24percent in 2019, compared to levels in 2015. Our efforts to optimise transport and warehouse logistics thus contribute significantly to Henkel’s overall climate strategy.
