Data transparency is at the heart of Henkel’s digital journey

Editor's note: This article was originally published on Handelsblatt.

When the long-established company Henkel began its “Industry 4.0” journey in 2013, no one could have imagined how quickly digitization would take place—and how valuable this data accessibility would one day be in the year of coronavirus.

Henkel set its data foundation at a time when a key priority for the business was understanding its energy consumption and where improvements could be made. Back then, Henkel recognized the value of data and the role that its own employees play in this context. Today, 4,000 Henkel employees use Tableau, the leading visual analytics platform, for powerful data analytics, with teams collecting and processing operational data from production on a daily basis. Thanks to dedicated data and analytics training, employees know how to interpret the data and apply it to their area of the business. In the current crisis, Henkel benefits from this data-focused approach, with its highly-dynamic regulations, processes, and supply chains.

Further, transparency is a top priority at Henkel. Every employee can see important metrics and receive data relevant to his or her job—a philosophy that also properly fuels healthy competition between production sites. Who works most efficiently in terms of energy? How much disinfectant and protective equipment is available? And which products will play an important role for consumers in one or two years?

We spoke with Dr. Dirk Holbach, Corporate Senior Vice President & CSCO Laundry & Home Care, about data, the need for a data culture, the lessons learned from the current crisis situation— and the important question of where the journey is headed.

Dr. Holbach, where do you see the greatest challenges when it comes to building a data culture?

Dr. Dirk Holbach: This is an interesting question. First off, we should differentiate between the entire company on the one hand, and the supply chain on the other. The supply chain is basically about processes. However, you can only control them if you know the relevant parameters—in other words, the associated data. Accordingly, our organizational unit already has a very high affinity for data and KPIs.

Especially at the beginning of our digital journey eight years ago, one of the biggest challenges was the availability of data— literally in the places we needed it most—and of course its meaningful and streamlined preparation.

One thing is certain: anyone building a data culture must create access to the data. And we are talking about trillions of data points. Setting up a structure that allows legitimate interpretation for specific user groups is a challenge, but we found that transparency and training are key to creating this access.

Transparency of data and information is no doubt challenging to create within a company, but at Henkel, we have followed the policy…"Everyone can see everything" from the very beginning. This 100 percent transparency has many advantages, but of course it was also met with skepticism. Accordingly, we have the benefits for the users on the one hand, but it also required active communication with management.

Here at Henkel, we see that this policy of transparency creates momentum for everyone to use data to for alignment and decision-making. For example, each plant can track down to the very minute what the other plant is doing; see the quantities, SKUs, etc.—and there is certainly a demand for this information. We monitor about 20,000 individual requests per day here. I therefore regard the availability and accessibility of data as a major challenge, but also a critical opportunity. In addition, there is of course the issue of data quality, an area in which we at Henkel have also undergone an evolution.

Against this background, the further training of our employees to improve data skills is very important, because we naturally want to develop the corresponding dashboards together with our team. Accompanying training, such as short tutorials and application examples, is therefore an important success factor.

What key role does a strong data culture play when it comes to process optimization (especially in the supply chain) at Henkel, today more than ever?

Dr. Dirk Holbach: Even though we are still at the beginning of our journey, we have certainly benefited from the foundation we have been developing over the last two and a half months, especially when it comes to remote, i.e. decentralized, work. For example, the analytics functionalities, real-time data on the platform, and important dashboards needed to be available from different locations.

Some of these functionalities were designed nearly overnight due to the highly-dynamic nature of the crisis, and this naturally brings challenges. We witnessed data-driven challenges, including the short-term balance of fluctuating supply and demand situations, like for washing and hygienic products. Fortunately, we were able to integrate corresponding functionalities into our existing Tableau platform at short notice. We’ve benefited from the expertise we have built up over the years, which enables us to create and evaluate such dashboards relatively quickly.

I think that companies that were already well positioned have benefited from the existing know-how during the crisis, and have actually been able to accelerate their digital processes and overall strategy. In this respect, the current circumstances have certainly accelerated quite a few things. In many ways, it would have been nearly impossible to maintain business otherwise.

What is incredibly practical about this data culture is the fact that everyone can access and work with the same data across teams and hierarchies.

What is your advice to business leaders when it comes to investing in and building a data culture?

Dr. Dirk Holbach: First of all, the benefit for the business must be the main consideration when thinking in this direction. In the supply chain, for example, we are dealing with strongly KPI-driven processes. Of course, I have to optimize and control these processes on an ongoing basis, so that I have a massive benefit right from the start.

This goes hand in hand with the so-called “user demand,” which needs to be encouraged. The users have to say, "Wow, I've always wanted that". And their ability to handle data is of course also important and must be trained accordingly.

To achieve this, technology solutions must be scalable and a more strategic approach needs to be in place, because it’s not only technology that will help a company be successful, but a strategy that prioritizes a strong data culture. At Henkel, this strategy is called "Industry 4.0" —here, we look at the topic of data and data visualization in a larger context. And finally, it is of course always important to define parameters for measuring success in order to evaluate our business performance and adjust quickly if needed.

How do you see the development against the background of the currently emerging "new normal"?

Dr. Dirk Holbach: We see a great increase in adopting data analytics technology and data skills that allow people to see and understand their data and make decisions quickly. Tableau usage is continuing to increase, and new functionalities are being added. At Henkel, digitization is accelerating rapidly overall.

And things will continue to adapt in the future. As far as our digital platform is concerned, we will continue to accelerate. Many new trends and ideas will be tried and tested.

Of course, especially in the Laundry & Home Care segment, we are observing certain categories here that have experienced an extreme boom in recent weeks. The increased demand will naturally have a lasting effect on our product portfolio in some cases. This is particularly true for hygiene products such as cleaning agents. In the supply chain, we need to know now what the consumer wants next year, a major challenge that makes data so valuable.

Are there lessons that you have learned in the past weeks that you think will change the way your company will work in the future?

Dr. Dirk Holbach: Definitely. The first lesson is "Stay Humble." We keep a strong factual focus of all internal communication, which is very constructive. And the fact-based approach is also increasing, which means that more and more decisions are data-based.

The last few weeks have changed the way we work together. Collaboration and commitment to data within the company have been significantly strengthened. I am convinced that we will take some good lessons into the future, especially when it comes to collaboration.