Clariant Masterbatches: Digital transformation in chemicals
“At Clariant Masterbatches we believe in a colourful world! Few people outside the plastics industry know what masterbatches are. We are one of those obscure industries that are everywhere and in everything, yet no one knows of us,” says Chris Hansen, Head of BU Masterbatches Asia Pacific. He, along with Gustavo Haruki Kume, Global Product Owner (InstaColr), and Sanjeev Sujan, Digital Program Leader for BU Masterbatches, are at the forefront of a digital transformation at the company.
“Our business develops and produces color and additive concentrates, which are used by producers of various plastic articles with the purpose of getting the right colour and functionality,” Hansen continues. Perhaps what most characterises the company is the complexity of its operations, serving over 20,000 customers across a range of industries, with products tailored to each customer’s specific requirements. Clariant Masterbatches at any point in time maintains more than 70,000 active products which are continually changing as customer’s update their products - from shampoo bottles to fabrics, smart phones and cars, they consequently request new colours and functionalities from Clariant. Clariant Masterbatches is very much revered for the breadth of its product portfolio and capabilities, the quality consistency, product stewardship and sustainability. However, the business has traditionally struggled to be as fast as the many small local competitors. “This need to increase our speed and make it faster and easier for customers to do business with us was the main inspiration to start our digital journey”, reflects Hansen.
“There are two main projects constituting Clariant Masterbatches’ digital transformation efforts: InstaColr and Smart Factory”, Sujan explains. "Individually and collectively, these two products will set us decisively apart from other players in our industry and have the potential to revolutionise the way the masterbatches industry works.”
InstaColr involves a completely new approach to meeting customer’s expectations. “InstaColr is a customer facing project, where we intend to replace our existing product development process, our color matching process,” Kume says. “In our current process a salesperson goes to a customer, talks to them, collects some information about the colour and performance characteristics that the customer wants, then passes all this to our labs.” After this, the lab starts working on matching the customer’s colour and other requirements. This often takes more than a week to be finalised, at which point they go via the sales person back to the customer. Not infrequently is there the need to repeat the process, if the result is not entirely what the customer wanted, or the requirements subsequently changed.
With InstaColr the company turns that process decisively upside down and cuts the lead time from weeks down to minutes in the best case. “Via the InstaColr iPad app, our sales person collects all technical and commercial requirements on the spot and confirms the colour”, Kume says. “InstaColr allows the customer to adjust the target color on the spot after which the application engine develops up to three relevant and tailormade matches with associated price and specifications on the spot. Often, the customer just needs to know that we can do it and what will be the cost, so that he can quote his customer. This is now instantly possible. After the customer’s choice, the underlying formulation and other requirements is transferred immediately to a regional lab, which produces a corresponding sample for the customer’s own sample production. This sample is with the customer within two to three days. The chief benefit is time saved, and time is money.”
InstaColr launched in the middle of last year in Southeast Asia. To date, 25 sales colleagues have undergone training and certification to become InstaColr Consultants. This process has been important, as the role of our sales representatives changes significantly with InstaColr. As indicated by their title, they go from selling to color consulting. “This binds us closer to our customers,” emphasizes Kume. The electronic capture of customer requirements has also allowed the centralization of the sample production into one regional lab, which allows scale advantages and yet faster sample delivery to customers throughout South East Asia. Clariant is now preparing the roll-out of InstaColr to other regions, which will commence over the course of 2020 and 2021.
Where InstaColr ends, Clariant’s Smart Factory begins. Smart Factory is currently running as a pilot project in Singapore. Subsequently the plan is to roll it out to more than 50 sites globally. Smart Factory spans everything from the receipt of customers’ purchase orders to the final shipment of the corresponding products to the customer. “Our aim is to make everything along this process smart or smarter than today – thus the title Smart Factory,” Says Sujan. “We do this by digitising, streamlining and automating process steps. This includes automating previously manual SAP processes as well as digitising the shop floor’s information flow by leveraging user-friendly tablet interfaces and linking up the back-end manufacturing execution system with the physical production equipment and programmable logic controllers. We thus get data into and out of equipment, control the equipment and track material flows via Radio Frequency Identification (RFID).The transparency and insights are the basis for direct process improvements and support a more effective performance follow-up and corrective actions.”
“The core engine of our Smart Factory is the Smart Scheduler,” Sujan says. “The minimum viable product is already on the shop floor. In the next version we will be able to dynamically schedule all tasks, equipment and manpower for a synchronised and optimised end-to-end workflow both within a site and across geographies. Also, the Smart Scheduler will allow us to quantify and thus decide on the specific trade-offs between service, cost and working capital on a continuous basis.”
“By optimising and synchronising process steps and resources via the Smart Scheduler, we will move much closer to a performance frontier and consequently reduce both lead times and cost,” emphasises Sujan. At the same time, the measures will further improve Clariant’s industry leading safety record by reducing firefighting and rushing stress levels amongst the staff.
Alongside the focus on technology, sustainability is a very central topic for Clariant and has been so for the last seven years at least, with many specific efforts and recognitions as a result. That’s due not only to a sense of moral responsibility, but because it is good for the business. “2019 was the year where sustainability became a real topic for our customers,” says Hansen. “In the years before, it was often a final, courtesy agenda point at customer meetings. Now, it is more often than not the first and primary agenda point.” There is huge pressure on the plastics industry from governments, consumers and NGOs. “Topics like the circular economy, recycled polymers and the whole issue of ocean plastic waste are very high on everybody's agenda,” Hansen explains. “This is our opportunity. We have the capabilities and solutions to help our customers.”
Clariant backs up these words with actions. Specific projects undertaken in the sustainability space include looking into achieving more consistent colours with recycled polymers, as well as building sustainability options such as recyclability and compostability into its InstaColr app to help customers make informed decisions. Clariant is also piloting a recycling plant in Italy known as CycleWorks, as Hansen explains: “That plant is, for example, doing extensive testing on how colourants and additives impact the recyclability of plastics. This again allows us to help our customers very specifically on how to improve the sustainability of their products.
Developing and implementing digital solutions in a traditional manufacturing company is not an easy journey. Clariant Masterbatches spent considerable effort in building up its in-house Digital Innovation Center team. “Initially, candidates are skeptical, as our environment is very different from that of, for example, an IT company. What in the end attracts and continues to excite people, though, is that we remain a small team where everyone plays a central role in trailblazing game-changing new ways of working in our business. People realize that they are having a real impact”, explains Hansen.
While it is a lot of work to develop the new digital solutions, the biggest effort and success is to actually make the organisation at large adopt and change their way of working around the new solutions. “Digitalisation fundamentally changes previous ways of working and takes away past flexibility and autonomy - either real or perceived. Our experience is that one needs a lot of positive encouragement and support, but in cases also the threat of consequences if people do not line up behind the new way of working,” explains Sujan. This is all about change management and that is how InstaColr and Smart Factory is driving true impact within Clariant Masterbatches.