Digital backbone underpins global agility

Anticipating trends in the global FMCG industry

Few industries can compete with the risk/reward thrill of the fast-moving consumer goods industry (FMCG). When a product finds a sweet spot, success can be global. Brand loyalty can span generations. But it can be a tough market to crack. Advertising costs are prohibitive, and piecing together global supply chains is hugely complex.

For global manufacturers, the ideal state is to marry local flavor with global consistency. Success requires staying on top of trends while continuing to pursue operational efficiency.

“Our goal is to predict consumer trends before they occur,” says Erik Thorwirth, head of global infrastructure at Henkel. “We need to be quicker to spot trends, and then faster to react.”

Henkel is one of the giants of the FMCG industry. The €20 billion business operates out of 450 locations worldwide, with 50,000 employees. Its Loctite, Persil, and Schwarzkopf brands are globally recognized market leaders.

Henkel sees global manufacturing as being at a historical pivot point. The application of Industry 4.0 promises to transform the way consumer goods are produced and shipped. The impact could have far-reaching effects on energy use, waste, and the use of finite resources.

“The future of the business will be driven by data,” says Thorwirth. “And data is nothing without insight. Insight is nothing without a business outcome. To generate meaningful insight, we need to bring all components of our global production together.”

Embracing Industry 4.0 to drive new efficiencies

Henkel is taking control of its digital future by building a new digital backbone. This backbone will connect manufacturing sites to sales and management. Where previous network decisions were taken locally, often outsourced, the goal is to have a consistent, global approach.

“We want full control, edge-to-cloud,” explains Thorwirth.

This is key to maintaining a competitive edge, he continues. A more connected business will be better able to drive product innovation, identify local marketing insight, and meet the group’s sustainability ambitions. Henkel will be able to flex production to more efficient sites or apply local productivity breakthroughs more widely. Consumer influencers in one region can be mapped against global trends. A more flexible production base will allow Henkel to test new local product variants.

It will also enable the group to apply new digital touchpoints and data-gathering throughout its operations. Henkel already has more than 3500 sensors in more than 180 factories, gathering information on sustainability, efficiency, quality, and safety. More are planned. This data is then available in real time, with cloud-based analytics finding diagnostics, predictions, and prescriptions.

Smart production will create a marked impact on consumer prices. By leveraging Industry 4.0, Henkel believes it can improve supply chain resource efficiency by 5-6% and help the business become 30% more efficient by 2030. In addition, it aims to achieve up to 65% reduction in the carbon footprint of its production by 2025, vs. the base year of 2010. Already, dynamically adjusted temperature controls in many Henkel production sites are helping reduce energy costs.

The network backbone will create a more dynamic, agile workplace culture, where Henkel can quickly spin up new locations or bring together co-creation teams from all parts of the world. Henkel wants the freedom to adopt a hybrid cloud strategy and is in the process of migrating many of its applications to the cloud.

HPE Aruba Networking Central at the heart of the global network

The new global Henkel network is built on HPE Aruba Networking ESP architecture. The engagement is wide reaching, beginning with the global roll-out of HPE Aruba Networking WLAN and LAN, and growing to include ClearPass for Network Access Control (NAC), data center switches, EdgeConnect Enterprise SD-WAN, and Central as a single cloud-native management platform. This establishes a coherent, global network strategy - the foundations necessary for driving digitization across the worldwide business.

“This is a move to standardize hardware, the way we manage the network, and our architectural approach,” says Keven McCammon, director, head of digital infrastructure services – global at Henkel. “We found HPE Aruba Networking had a lot of the same ideas as us.”

At the heart of the Henkel global network is HPE Aruba Networking Central. “It gives us a full view of our network infrastructure from a single pane of glass and yet, it allows us to support different requirements from different business units,” McCammon explains. “Local business units don’t mind handing over control of the network when they see how much more responsive we are now.”

To date, more than 10,000 HPE Aruba Networking switches and access points are managed through HPE Aruba Networking Central. Henkel estimates around 300,000 devices are connected to the network, a figure likely to grow. Mobile working is commonplace for most of the 50,000 employees, with HPE Aruba Networking ClearPass, linked to HPE Aruba Networking Active Directory, acting as the global NAC platform. Management of this vast estate is hugely simplified.

Henkel has a rolling, three-year hardware refresh cycle. Standardized hardware means equipment can be shipped anywhere in the world. Configuring new hardware, a task that would involve sending engineers on-site, is now managed remotely. A job that took weeks of planning is now accomplished in minutes. “And our ability to have new sites up and running, to integrate new acquisitions, or diagnose and resolve network problems is 90% faster,” he adds. “We’re no longer chasing our tails.”

HPE Aruba Networking EdgeConnect Enterprise SD-WAN then manages and automates the highest level of application performance under any network conditions, combining the abilities of multiple transport circuits, including MPLS and Internet. Henkel uses Zscaler alongside HPE Aruba Networking SD-WAN to ensure consistent cloud-based security (SASE) across the enterprise, configured in minutes.

“We’re now able to make smarter choices around high- and low-priority network traffic,” says Viktor Trusch, head of network architecture at Henkel. “We have some special production applications that require special treatment.”

In parallel with the network overhaul, data center consolidation has eliminated 95% of local server rooms (with the associated energy and floor space savings). Ultimately, Henkel will operate out of regional hubs in Europe, Asia, and the Americas, while making tactical use of the public cloud.

“We cannot place all workloads in the public cloud, but we want the features of the cloud in an on-premises environment,” says Thorwirth. “Again, this requires control and central visibility of all activity and access on the network.”

For this, Henkel is exploring HPE GreenLake. The design of a private cloud at the Frankfurt location is in place, with Singapore in progress.

“HPE GreenLake has a unique opportunity to be an enabler for Henkel,” says Thorwirth. “It hits a sweet spot where we have the capabilities of a public cloud run from a private cloud. It can bring our digital transformation to life.”