togetherThe global magazine of Supply Chain Operations & Information Services

Mobility 4.0

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FEATURE Agile mindset

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MARKETS & TRENDS

FOCUS Mobility 4.0

40 The customer in focus

If customers order something online today, they expect it to be on their doorstep tomorrow. Expectations of customers are also rising in the chemical industry – a challenge for companies.

42 Reliability is key

Delivery reliability is a key success factor for supply chain when it comes to customer satisfaction. An example at Nutrition & Health shows how delivery reliability can be improved.

08 On the road to Mobility 4.0

The car of the future needs more than an engine to meet the challenges of connected mobility. The automotive and IT industry have been drawing closer for many years now.

14 A touch of science fiction: Mobile solutions of the future

56 World of Work 4.0: Changes unlock new opportunities

Digitalization is the central theme of the future when it comes to remaining competitive. But what does it actually mean for employees and managers?

58 Lifelong learning

The world of work is constantly changing and employees and managers need to acquire new knowledge and learn new skills.

44 Changing the customer service mindset

Customer service is not only a job for employees who come in direct contact with customers. It is also relevant to everyone in the organization. A program in Asia shows ways to improve customer experience.

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52 Blockchain – the next digital revolution?

Blockchain is a database technology designed to make digital transactions faster, cheaper, safer and more transparent. The potential applications are wide-ranging.

46 Innovation makes the difference

Disruptive technologies turn business models and competition situations on their heads and change global markets – a big challenge for companies.

16 The future of transportation is electric

What does the push for electric cars mean for the automotive industry and suppliers like BASF?

22 Electric cars move the world

Facts and figures on e-mobility.

24 Mobile solutions for supply chain

It is no longer possible to imagine everyday life without Apps, GPS & Co. Which role do they play in supply chain and logistics?

28 The silent revolution

A revolutionary transport concept will catapult the Ludwigshafen site from the tank car era straight into the digital future.

30 Achieve goals faster with agile IT

To respond more flexibly to the needs of BASF divisions and get solutions to market quicker, it takes agile IT.

36 One smartphone for professional and personal purposes?

Using your personal smartphone for work? Or using a company-owned phone for personal use? An overview on this hot topic that is currently being widely discussed.

34 Setting the course for the IT of tomorrow

Huge technological changes as in the area of mobility also open new possibilities for businesses – and IT needs to set the course for supporting these developments. What does this mean for BASF’s IT landscape?

62 Flexible working models are critical to our success

The workforce is changing rapidly. For David McGregor, head of Global IT Delivery, flexibility is therefore a very important aspect of his work life.

64 In brief

65 Imprint

48 Smart dust motes

Researchers are working on ever-smaller tiny sensors known as smart dust motes. How important is this future market for companies like BASF?

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CONTENT

Our world is in the midst of a digital revolution that will transform almost every area of our personal and professional lives. There are huge opportunities here for BASF, and all of us can help to shape them. It is a great privilege taking over Supply Chain Operations & Information Services at this very exciting time. I have gained many new impressions and experiences in my first few months while getting to know the division and meeting new people. A number of challenges lie ahead of us and I look forward to tackling them with my team and in close cooperation with BASF internal partners.

I have had many conversations in recent months to gain a deeper insight into our supply chain and IT. I am very impressed about how determined our people are when they encounter difficulties and that they never give up until the problem is solved. I have also seen how hardworking and highly motivated our team is, driven by their vast professional expertise and

great experience. And I am confident that we are in a very good position to lead our company into the digital era.

But still there are areas where we need to do better, especially in IT. Conversations with our internal partners have confirmed this to me. Improving our services has top priority. Only then can we provide better support to our internal business partners and raise customer satisfaction in the process.

To advance digital change at BASF, it is very important to also look at what’s going on outside of our company. For example, what are the major trends? Which of these trends are relevant for BASF? This is exactly the approach we are following with our magazine “together”. We explore current topics in terms of their relevance for BASF and the kind of support we need to provide to our internal partners. How do we position our supply chain? What does digitalization mean for our IT architecture?

“Agility is needed now more than ever”

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EDITORIAL

Digitalization also means that we need to be open to change and to see the world through the eyes of our BASF customers. Our featured topic, Mobility 4.0, is a good example. The car industry is now undergoing the greatest transformation in its history. Autonomous driving, digitally connected cars, and electric vehicles are set to have a huge impact on the future of the automotive industry, which is one of BASF’s most important customers. For us, it means we have to understand what the automotive industry needs so that we can support our internal partners in the operating divisions in every way to strengthen BASF’s competitiveness in the marketplace.

The importance of being close to customers is another key topic we will be exploring in this issue. How can we further improve our customer focus and adapt our mindset accordingly? Agility is needed now more than ever. The expectations of internal partners and external customers are rising.

They need differentiated solutions and services that are fast and flexible. In this tough competitive environment, one thing counts more than anything else: to stand out from the competition through effective customer service.

Enjoy reading this new issue of “together”!

Best regards

Christoph Wegner

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EDITORIAL

FOCUSMobility 4.0

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Digitalization, autonomous driving, e-mobility, mobile solutions for supply chain and logistics – looking at the mobility of the future.

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On the road to Mobility 4.0The car of the future needs more than an engine to meet the challenges of connected mobility. The car industry is gearing up for the biggest revolution in automotive history and has been drawing closer to the IT industry for many years now.

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The race for the car of the future is on. Self-driving cars promise to disrupt the industry just as Henry Ford’s introduction of the first assembly line did more than a hundred years ago. People today expect tomorrow’s cars to come with fully digitized mobility, information and communication platforms. The first generation of digital natives wants their digital world to accompany them in the cockpit of their car, which makes software more important than ever before for automotive companies. Mobility is being redefined since digital innovations are not only bringing new products to market, they are also bringing new services. Connected vehicles deliver car manufacturers an excellent platform to develop new business models as providers of mobility services and to revolutionize how they interact with their customers.

The conjunction of cars and IT is transforming entire branches of industry. Germany has long been a global automotive industry leader, but competition never sleeps. Silicon Valley technology firms have their sights set squarely on car manufacturers: Google has been at the forefront with its driverless car

division, while Uber, an online ride-booking service, is disrupting markets with a ride-sharing app. Not wanting to be left behind, the automotive industry is jumping on the bandwagon.

Collaboration is the key to successTake Toyota, which is partnering with Uber to position itself as a mobility services provider. Daimler snapped up the MyTaxi app, Volkswagen is investing in Gett, Uber’s Israeli-born rival. The Wolfsburg-based company makes no secret of the fact that the notion of robot taxis is what inspired the deal. The ride-sharing platform could “be a basis for developing workable models for on-demand operation of autonomous cars,” company sources say. They have figures, too: The new mobility solutions division is projected to generate billions in sales by 2025.

Autonomous driving is the great vision that has been inspiring the automotive and IT industry to work on the technology for some time now, including in joint ventures. The latest example is BMW’s team up with US chip manufacturer Intel, as well as the Israeli start-up and

camera technology specialist Mobileye. The aim is to develop the technology for fully autonomous cars to go into mass production within the next five years. The technology in turn is to be the starting point for driverless ridesharing fleets of robot cars that pilot customers to their destination.

General Motors’ ambition is to be at the forefront of the robot taxi trend. The US car giant partnered up with Lyft, another rival of the e-hailing leader, Uber. The partners plan to build up a network of “permanently available autonomous vehicles,” the two companies announced. Uber in turn is collaborating with Volvo to develop proprietary technologies for robot cars. The Chinese web services company Baidu is also working to make the vision a reality. Expect autonomous cars to dominate our streetscape in five to ten years, the manufacturers say.

Smart mobility concepts optimize logistics Meanwhile, on the logistics front, the first autonomous delivery robots are already taking shape. Postal services are introducing them step by step. Swiss Post has

Autonomous driving is the future. Just sit back and relax while a smart car brings you to your destination safer and faster.

BMW is designing a new generation of electric cars (see photo below). The Mercedes-Benz Urban eTruck is not only all-electric, it is also fully connected (see photo above).

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been testing autonomous delivery robots since September, and Hermes has announced plans to use mini-robots for parcel delivery in Germany (see page 14). The industry wants to reach higher, too: with long-standing plans to use drones for deliveries. In fact, electronic retail company Amazon presented its second drone model for parcel transport last year. The Chinese e-commerce company Alibaba, Google, and logistics firms like DHL and UPS are working at full tilt to enable deliveries by drone. From outside the sector, Airbus is getting in on the act. In a project named Skyways, the consortium is developing unmanned aircraft systems designed to deliver parcels in cities on preselected flight routes. Once the regulatory approvals are in place, autonomous taxi flight services could follow. Another “mobility of the future” project in the logistics sector goes by the name of platooning. It basically means driving in convoy and refers to a system that sees connected, (partly) automated trucks driving in a group. Platooning has been hailed as the future of cargo transport and a major step on the way to automated driving (see graph on page 12).

High-tech partnership with transportationThe truck industry is poised to enter the digital era. Real-time communication of vehicle- infrastructure data is set to be a crucial success factor. The connected truck – self-driving and smart – is the truck of the future. Major commercial vehicle manufacturers are upping the pace of development in the hope of seeing new business models emerge from connected truck technology. Daimler Trucks, for instance, plans to invest about half a billion euros by 2020 to develop such technologies and to design new digital applications. The transportation manufacturing industry is taking things a step further by transforming themselves into suppliers of end-to-end solutions and mobility services. Vehicles will come equipped with their own drones, automated stacking systems that think ahead and place cargo in the right position all by themselves, as well as all sorts of software for digitally connected logistics systems. Trucks will be smart data collectors. The technology promises to save time and boost efficiency.

Connectivity calls for traffic managementCollective traffic management systems are major contributors to tomorrow’s mobility. These systems respond to the traffic situations by temporarily opening up emergency stopping lanes or adapting speed limits, while navigation systems help drivers to circumnavigate congestion and protect them with warnings of dangerous situations. WiFi is the technological basis for this communication. Environment sensors in the car, radar and cameras are the foundation of these assistance systems and show the way the future is likely to develop. A Connected Cars study by Pricewaterhouse Coopers gives an idea of the commercial potential of smart vehicles. The business consultants expect it to triple from an estimated €40.3 billion in 2016 to reach approximately €122.6 billion in five years’ time. Urban trends like car sharing will play a major role in driving inter-vehicle communication, the experts predict.

E-mobility as integral ingredientDriverless is the one megatrend. Electric is the other. E-mobility will be a key ingredient of a smart, resource-saving urban lifestyle in

Drones may make supply chains so efficient in future that customers will get their goods within hours of ordering online.

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The transportation vehicle of the future has an electric propulsion system, is steered by joystick, loaded by robots and even has its own delivery drone on board. Mercedes-Benz Vans used the commercial vehicles motor show in Hanover to unveil the Vision Van, which the company claims will revolutionize delivery transport in dense urban environments.

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7 to 15 meters 7 to 15 meters

Platooning: connected truck convoys Platooning connects three to five trucks electronically. Only the foremost truck is controlled by a driver. The trucks behind follow automatically. Truck number one determines the direction and speed of travel. If it changes course to drive around an obstacle, roadworks, or tire parts on the road, the others follow suit – monitored by a WiFi connection. The convoy is controlled by software which has been built to react faster than humans. Therefore the new traffic telematics systems promise to take up about half as much space on highways while making the roads safer. Another benefit: electronically connected vehicles exploit the slipstream of the truck ahead to save fuel. Initial trials suggest the system should be able to cut fuel consumption by as much as ten percent.

The first vehicle films the road ahead and transmits the image to all the trucks in the convoy. The shorter distance of 7 to 15 meters reduces aerodynamic drag – and fuel consumption with it.

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future, experts say. E-trucks lag slightly behind the car industry on this front, with about a million electric vehicles expected to come on the roads in Germany by 2020. The figure is predicted to reach six million just ten years later.

For now, however, electric cars are still a niche product. Limited ranges, comparatively long charging times and the sparse network of charging stations are stumbling blocks to e-mobility. Loaded trucks work even harder than cars under the low energy density of the available electric batteries. To reach an acceptable

range of 1000 kilometers per day, the battery modules that would be needed based on current tech-nology would be huge, weighing several tons in their own right. Accordingly, rapidly advancing battery technology coupled with equally rapidly falling costs is the key to the e-truck.

Electric highwaysIn the meantime, Sweden has been exploring new ways to transform diesel trucks into innovative, emission-free transporters – and is looking towards old streetcars as a source of inspiration. North of Stockholm, motorists can try out

the world’s first public electric highway courtesy of the Swedish government, Siemens and Scania, a truck manufacturer. Overhead power lines are mounted over the truck lane on a two-kilometer stretch of road. Sensors on the roof of the Scania truck recognize them as power sources. A power collector over the cab extends out and connects with the power lines. The truck switches automatically to electric power. Siemens says energy consumption is half that of conventional power propulsion systems – a powerful argument in the exciting race for the mobility of the future. n

The world’s first public electric highway is located near Stockholm.

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Subterranean goings-onAlthough the underground transport network

is modest as yet, plans to beat the traffic from below are forging ahead.

Underground transport system for cargo: A Swiss project called “Cargo Sous Terrain” aims to revolutionize the movement of goods. The first step would involve building an almost 70-kilometer stretch of tunnel with three lanes propelling electric vehicles by electromagnetic induction at a speed of 30 kilometers per hour. Each transport unit has room for two standard pallets. A rapid suspension rail under the ceiling would be used to transport very small items. Numerous Swiss transport, logistics, telecommunications and energy companies are

Back to earthLook, no hands! The coming trend in road traffic is clear: tomorrow’s vehicles are driverless.

Rolling minirobots:Swiss Post launched a pilot of self-driving delivery robots last year. The test robots built by Starship, a start-up, reportedly travel six kilometers on their own and can transport loads of up to ten kilograms. German logistics firm Hermes is testing the digital helpers too.

Robot taxis: Major automobile manufacturers – and internet companies like Google – are currently developing technologies for self-driving cars. One scenario is to have them serve city residents as robot taxis. A study by the Earth Institute in Columbia postulates 75 percent lower costs per mile traveled, mainly as a result of better vehicle capacity utilization.

A touch of science fiction: Mobile solutions of the future

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involved in the project. The first section of this vision is scheduled to come on stream in 2030.

Floating underwater tunnel: Norway is planning a new infrastructure project called “Submerged Floating Tunnel” designed to shorten transport routes. The floating tunnel comprises two tubes for bidirectional travel. The tubes are suspended 30 meters below the water surface on floating platforms that keep them on the same level.

Moving on up With large cities heading for permanent gridlock, traffic may be about to move up a level.

Flying cars: The Aeromobil, a cross between a sports car and ultra-lightweight aircraft, is taking shape in Slovakia. Terrafugia, an MIT spinoff, and an EU research project called myCopter are working to

develop flying cars as well. Another lofty vision: passenger drones. EHang 184, a fully autonomous octocopter for passenger transport developed by

Chinese start-up EHang, has enough battery power for a 23-minute flight. Market access date: to be determined.

Straddle buses: The Transit Elevated Bus holds up to 300 passengers and glides over the top of cars on the road, which can pass freely beneath. The straddle bus undertook its maiden voyage in Qinhuangdao, China last

summer, completing its first 300-meter test run in public.

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Far more than half of the 7.4 billion people in the world today live in cities. The world’s large metropolitan areas are currently where most of the population live and this will only increase in the future. The United Nations estimates that almost 70 percent of the global population will be living in urban areas by 2050. The numbers of cars will rise, too: By 2020, there will be approximately 1.2 billion cars on the roads – almost 300 million more than today. The increasing challenges for transportation are already apparent. Emission-free driving – which means electric and hybrid vehicles – will be crucial in overcoming those challenges. These trends are game-changers for the automotive industry and also for automotive suppliers, who need to respond to the needs of their customers.

Tesla Motors created a global hype. Barely two weeks after unveiling its latest model, expected to come out in 2018, the electric car pioneer announced that 335,000 pre-orders had already come in. BMW has announced that it intends to sell 65 percent more electric cars this year than in 2016. Audi plans to launch an electric SUV with a range of 500 kilometers by 2018.

Porsche and Daimler are likely to follow with electrically powered models in 2020. And Volkswagen wants to be the global market leader in electric transportation by 2025 and the first manufacturer in the world to sell a million electric cars a year.

The Chinese market is growing at a rapid pace. In the first eight months of 2016, 240,000 electric cars were sold in China. The country plans to bring one million electric cars onto the roads by mid-2020.

BASF on boardThe car industry is one of BASF’s main customers. In 2015, products for the automotive industry accounted for about 14 percent of the company’s sales. One in two cars worldwide already have an emission catalyst, coat of paint or some plastic component made by BASF. Plastics, coatings, pigments, fuel additives and catalysts supplied by BASF are making cars lighter, more efficient, and less polluting. In electric transportation, BASF’s product range includes plastics for lightweight components and engineering plastics for chassis and different uses under the hood of the car.

BASF also develops and produces cathode materials and electrolyte formulations that are already found in cars today. Research is ongoing into materials and components for next-generation batteries that promise a higher storage capacity, better performance and longer life. The goals are clear: to significantly increase the average distance a vehicle can go before recharging and to shorten how long it takes to recharge. In Japan, BASF established a joint venture with TODA KOGYO CORP. in 2015, called BASF TODA Battery Materials LLC. Its focus ranges from development and production to marketing and sales of an array of cathode materials for lithium-ion batteries such as lithium-nickel-cobalt-aluminum oxide (NCA) and lithium-nickel-cobalt-manganese oxide (NCM).

Will our children ever need a driving license or even own a car? Or will they share a driverless electric vehicle with other people? Will gasoline and diesel engines be phased out by 2030? What does the push for electric cars mean for the automotive industry and suppliers like BASF?

The future of transportation is electric

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As part of the “High Energy Lithium-ion Batteries” (HE-Lion)

project, BASF is conducting research into a new generation of lithium-ion batteries. The aim is to significantly increase the batteries’

energy density to specifically extend their use in electrically

powered vehicles.

An optimized electrode manufacturing system is tested using screen printing technology. To do this a machine distributes the cathode material on to an aluminum foil.

Wherever power doesn’t come out of a socket, these nano- to micro-meter sized metal oxide particles are used as a reliable energy source for batteries.

Lithium-air battery – the battery of tomorrow?

The lithium-air battery has as much as ten times the energy density of a lithium-ion battery, but a number of fundamental obstacles have stopped it from being put to practical use. That might change soon: Researchers from the University of Cambridge have significantly improved the battery’s stability and efficiency. The prototype can produce enough electricity to give an electric car much the same range as a car with a gasoline engine, and it can be recharged up to two thousand times.

When a lithium-air battery discharges, the lithium-ions migrate to the cathode and react with oxygen to form lithium peroxide. The cathode itself only provides a surface onto which the lithium peroxide deposits. The problem is that lithium peroxide is insoluble and non-conducting. It causes the cathode to not react and interferes with the ability to charge. Recharging the battery requires high voltages and it loses efficiency with every cycle. The scientists overcame these obstacles by changing the materials and using certain chemicals.

The race for the best battery

Efficient battery technology will be crucial. Tesla CEO Elon Musk inaugurated his “Gigafactory” in the Nevada desert in July 2016 and expects the gigantic lithium-ion battery factory to produce battery packs with a capacity of 35 gigawatt-hours as early as 2018.

Lithium-ion batteries are used as energy stores in many electric and hybrid vehicles and power-hungry mobile devices. Lithium-ion batteries generate electromotive force by moving lithium- ions. The battery is made up of an anode and cathode with a separator to keep them apart. When the battery is in operation, the lithium-ions migrate from the negative electrode (anode) to the positive electrode (cathode). The electric charge is trans-ported by electrolytes. When the battery is recharged, the ions flow back to the negative electrode.

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Challenges for the supply chainThe automotive industry is undergoing radical change. Speed and innovation matter now more than ever. What do the needs of its car industry customers mean for BASF’s supply chain? “Our car industry customers need reliable service, high flexibility and innovative solutions,” says Ralf Busche, Global Supply Chain Strategy & Performance. “The supply chains of our business units must meet the needs of the customer’s business at all times. For the automotive industry, it means we need an appropriate supply chain model that ensures high reliability, enables flexibility and supports make-to-order and just-in-time production.”

Carmakers need to be able to respond at short notice to fluctuations in demand and trends – and the same applies to automotive suppliers like BASF. Unlike business units that produce large quantities for stockpiling whose main focus is high availability or low prices, many units serving the car industry see flexibility as their top priority in supply chain management. To meet these requirements, BASF started differentiating its supply chains according to supply chain models a couple of years ago. “Lean” focuses on cost efficiency, “Capable” accentuates availability and delivery speed, and “Agile” is mainly about flexibility and agility. Each model guides how certain aspects of the supply chain could be managed in order to meet customer requirements in the most effective way.

Lithium-sulfur batteries

BASF researchers are working on next-generation battery systems. Lithium-sulfur batteries hold great promise. Sulfur is cheap and plentiful. Lithium-sulfur technology also promises high energy densities that would enable electric cars to drive longer distances. The cathode of a lithium-sulfur battery contains carbon black, small yellow sulfur particles and graphene. Graphene is a novel modification of the element carbon. Graphene makes the cathode more conductive. As with lithium-ion batteries, the lithium-ions carry charge and migrate back and forth between the electrodes. The sulfur atoms at the relevant electrode bind the lithium-ions more effectively and deposit better. As a result, lithium-sulfur batteries have a higher theoretical capacity than lithium-ion batteries.

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Given the differences in the products manufactured by the various business units, supply chain models are usually assigned to specific segments. Performance Materials (PM), for instance, manufactures plastics to make headlight frames and car upholstery. Demand is easier to anticipate for the headlight frames, so a “Capable” model was chosen here. Demand tends to fluctuate more for upholstery, so PM uses an “Agile” model in this product area.

Of course, only selecting the right supply chain model is not enough. Detailed measures are identified and put into practice to make the model work in day-to-day business. In order to make this happen at BASF, the Automotive Supply Chain Management (SCM) community looks at how best to implement the strategy in the most practical way.

Cross-divisional customer focusThe Automotive SCM Community was set up by the supply chain management heads of the four operating divisions Catalysts, Coatings, Performance Chemicals and Performance Materials in collaboration with Supply Chain Operations & Information Services (FS) to better meet the automotive industry’s special requirements. Since many of the company’s highly specialized customers from the automotive industry specify their own standards and processes, these divisions often require specific

BASF’s electric vehicle fleet

BASF has its own electric vehicle fleet, with about 150 electric cars in use as company vehicles in Ludwigshafen, another 11 BASF sites in Germany, and Antwerp, Belgium since the end of 2015. Most of them are in car pools. Some are reserved for use by security staff or messengers. Another 100 joined by the end of 2016, taking the total electric car count to 250. The charging infrastructure is growing along with the fleet. Each company car in the electric fleet has its own charging station on company grounds. This means the cars are ready for use at all times.

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solutions that deviate from BASF’s standard range. This resulted in stand-alone solutions which each division developed on its own at great effort and cost. One example: large automotive customers use electronic data exchange for automated order transmission. Customers frequently make changes that neces-sitate system modifications at extremely short notice. If every division implements these modifications on their own, it takes a lot of time; plus having parallel, multiple solutions is quite expensive, not to mention the time put forth by employees. “Our Automotive SCM Community now combines these efforts. In collaboration with FS, our cross-divisional team is working to

streamline processes and make them more efficient. The aim is to find the best solution – which might be a new solution – at BASF for our customers,” says Annette Hoffmann, Supply Chain Management Cellasto, who coordinates the SCM Community.

The Automotive Community is currently working on a solution for accurate labeling of goods and related documents. Each

automotive customer defines their individual requirements as regards label positioning, size and content. Other major current focus topics for the Community include continuous Electronic Data Interchange (EDI) connections and the introduction of delivery schedules for drop shipments.

Effective planning is crucialThe Detailed Planning & Scheduling (DP&S) team at FS supports the business units in production planning to improve the digital supply chain and meet customer requirements even better. “Emission catalyst production changes all the time. We need to be able to respond flexibly to what our customers want,” says Mark Schmitz, responsible for the catalysts supply chain in Europe. New DP&S processes and tools were introduced at the Nienburg catalyst site, including SAP’s digital “Advanced Planning and Optimization” tool. It is used for all supply chain business processes, resulting in closer links between all the processes involved: production, quality assurance, inventory control, logistics and customer services. Information about production status or use of raw materials is now available in real time for everyone involved. “DP&S processes and IT solutions are the key link between business planning and manufacture,” says Achim Gerstlauer, head of the DP&S initiative. “We help divisions make their production planning more efficient and contribute to creating a more agile, effective and transparent supply chain.” n

Annette Hoffmann, Supply Chain Management Cellasto

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Lithium carbonate is the raw material used to make lithium-ion batteries.

Lithium-ion batteries are used in computers, smartphones, and – increasingly – electric cars. The popularity of

lithium-ion batteries has sent lithium carbonate prices skyrocketing. Batteries account for one-third of the

cost of an electric vehicle.

Sources: Macquarie, Deutsche Rohstoffagentur

Lithium carbonate boom

China leaves rivals standing

China is rapidly becoming a leader in electric transportation and has now overtaken Japan at the top of the country ranking in electric car production. The table shows the number of electric cars in 2016.

Source: ZSW

USA 409,820China 306,650Japan 129,730Netherlands 89,060Norway 79,110France 76,070Germany 55,250Great Britain 52,230Canada 16,990Sweden 16,530Including plug-in-hybrid

Everyone is talking about electric cars. “Together” shows how things stand in the switch from gasoline to electric.

Electric cars move the world

Lithium prices increased significantly.

Raw material:

Lithium carbonate

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Electric cars move the world

No more charging cables? In the future, electric cars will draw the power they need from a charging pad in the ground, wireless and plugless. The underlying principle: a magnetic field, the same as induction cookers use. The technology is attracting huge interest from car makers and suppliers, with Audi and BMW driving development in this area. Experts believe there is a good chance that cars with wireless charging will be available for sale in just a few years’ time.

Charging in the future

... no other European country has more electric cars on the roads than Norway per head of population? Electronic vehicles have a 29 percent market share.

Did you know that ...

Electric vehicle sales are increasing Global sales from 2010 to 2030 (in billion euros)

Source: CarIT 01/2016

20302010

187

2020

301 459

Sources: German Energy and Water Industries Association;

European Commission; IEA; KBA; BMUB; IHS Automotive

2,000,000

13,000,000

million of electric cars were registered worldwide in 2016.

The number of charging stations for electric cars is expected to rise to almost 13 million globally by 2020. To compare: There were only one million charging stations for electric cars worldwide in 2014.

The infrastructure

challengeDeveloping the infrastructure is still a key

challenge for electric transportation.

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Mobile solutions for supply chain

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Tools of the Trade – More efficient management of cost-intensive supply

chain assetsEvery day, large volumes of acrylates depart

from Petrochemicals North America sites, stored safely on leased tankers and barges. The

business unit had leased about 110 of them to enable a flexible response if the need would arise, for

example to meet surges in demand. However, market trends did not live up to expectations and some of the

leased assets remained unused.

To boost capacity utilization, a team from Petrochemicals North America, Supply Chain Operations North America and Supply Chain Operations & Information Services developed an easy-to-use dashboard in Excel in a project called “Tools of the Trade.” The tool automatically calculates the size of tanker and number of barges required for shipments, and the transport fleet setup is modified on that basis.

As well as having a positive impact on the cost of the existing fleet, the dashboard also quickly and reliably calculates profit margins and business cases for new transport solutions – and is very useful for negotiations on cost-intensive supply chain assets. Other business units are likely to benefit, too.

Sales in Motion – “On the go” sales appTo increase sales in emerging markets such as South America, the innovation team at Supply Chain Operations & Information Services is testing a mobile sales tool called “Sales in Motion”. The tool provides customers with a mobile e-commerce tool in the form of an app. As a result, BASF sales employees can significantly speed up the sales process at customers’ sites by creating an order that can be validated immediately offline, whether or not a mobile network is available. This is especially important in this region with insufficient network coverage.

It is no longer possible to imagine everyday life without Apps, GPS & Co. So, which role do they play in supply chain and logistics? ”Together“ will give insight on some interesting innovations projects BASF teams are working on. The goal: To promote the use of new innovative technologies within BASF to tap into new business areas, reduce costs and increase efficiency.

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Once a data connection has been established, the order is synchronized automatically with SAP.

What is more, the app is transparent and user-friendly when look-ing up customer information and purchase histories making it possible for sales employees to give customers tailored advice on site at all times. Sales information can also be analyzed throughout the entire supply chain, so that purchase behavior and deviations are spotted early. The tool also serves as an innovative ordering platform for customers themselves: they can enter their own pre-orders, which are then checked by a sales employee and then put directly in the system. The solution is being piloted with Agricultural Products and Coatings in Argentina and Brazil.

DataTRACK – Keeping track of shipmentsTogether with the North American Business Units Dispersions & Pigments, Performance Materials, Petrochemicals, Coatings and Intermediates, the supply chain team from Monomers North America developed and implemented the tracking and notification system DataTRACK. The team won the Supply Chain Award

Opportunities for mobile applications in logistics, supply chain management and foreign

trade are huge, ranging from mobile inventory and contract

management to transport control. Many applications are already

being used at BASF.

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2016 for this solution. It delivers GPS data and the estimated time of delivery on bulk transport automatically and in real-time via email. The recipients include customers, the Supply Chain and Customer Care units and the respective business teams. Currently, six business units and twelve carriers are using the automated solution, which sends information on the delivery status to specified mailing lists around the clock. This way, customers always know where their ordered deliveries are and are informed about delays proactively. The supply chain team is offering the DataTRACK solution to any BASF business units globally, and is currently exploring pilot projects at Monomers Europe.

With DataTRACK, Monomers North America has significantly improved its customer service. Having real-time information on the order delivery status boosts transparency and increases customer satisfaction. Especially if a delivery is likely to be delayed, the customer knows about it early on. Even the business unit reduced the internal workload since it is no longer needed to calculate complex data by hand to determine the current status of a delivery. In addition, DataTRACK helps

to increase Monomers North America’s delivery reliability, which is currently 87 percent for regional deliveries.

Data Driven Sales – Boosting sales with dataThe solution Data Driven Sales was jointly developed by Automotive Refinish Coatings Solutions Europe, Global Business Model Solutions and Supply Chain Operations & Information Services and helps the global sales force respond to customer-specific inquiries – anytime and anywhere. The tool combines customer data from different sources like Customer Relationship Management, portfolios, logistics and others to provide real-time product recommendations.

Thanks to a comprehensive graphic representation, Data Driven Sales offers the sales force extensive insights into the customers’ portfolio, allowing sales to make targeted decisions. It is the first mobile BASF solution that puts multiple datasets and real-time analytics to use. The application helps to increase customer face time by eight percent per year. The team won the Information Services Award 2016 for this solution. n

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With barely a sound, the flat eight-axle vehicle slides underneath the frame of a BASF tank container which has just been deposited by a crane. Hardly being noticed, it lifts one of the silver-colored containers and quietly sets off straightaway. Hundreds of these containers are ready to go in the new tank container terminal. In order to get to the loading sites, they are placed on flat conveyor vehicles which have a special feature consisting of something missing: a driver.

BASF’s annual transport volume is almost 20 million metric tons. There is a steady flow of ships docking, trucks passing through, and trains being loaded and unloaded. They transport raw materials to production plants and goods to customers. More than one-quarter of the quantities transported are for internal use to keep the production Verbund going and almost one thousand rail tank cars are used for this specific purpose. Getting them from the railway station to one of the 161 loading sites is a complex process. More than 40 tank car trains need to be set up every day with the cars in the right order, and the amount of work it takes to switch a train from one track to another is huge. Turnaround time from order to delivery is about 24 hours. Any last minute changes add a lot of extra expenses. The tank car fleet needs a lot of space and is very expensive to maintain. Tank car rental is the largest cost unit in the company rail transport system.

Thus began a search for an on-site system that combines the efficiency of rail transport with the speed and flexibility of truck transport. The world’s largest tank container developed by BASF in 2015, similar to a tank wagon yet with a removable tank, became the key. Now the entire transport logistics system is much faster and more flexible because all you need to store are the tank containers instead of the tank cars, which is much more efficient and cheaper.

Creating an innovative mobile tank storage terminal concept based on separating the tank and the vehicle will revolutionize the entire transport logistics in Ludwigshafen. The most important part is the new container, which also serves as an interface to the external transport network, since these full containers can be loaded onto trains or trucks. Internal company transportation between a loading site and a

storage terminal takes place using the new driverless conveyor vehicles, known as Automated Guided Vehicles (AGVs). Only seven AGVs are needed to connect the tank terminal – with hundreds of containers of different sizes – to the loading sites. “The AGVs are about the same length as a truck but can carry twice as much and are much more agile,” says Thorsten Bieker, Rail & Site Services. “And above all, they can operate in partly automated or fully automated mode.” The AGVs move without rails over transponders in the ground. Integrated sensors detect any obstacles immediately.

The units travel fully autonomously at walking speed when at loading sites and in the container terminal itself. Transport in site traffic is camera-monitored by a driver in a control room. The driver can intervene by radio at any time or communicate with the loading site employee using a microphone and loudspeaker. “Safety is of course the number one priority,” Bieker comments. The units can also travel in a convoy. The driver only needs to monitor the first AGV since the others are connected to it

While the automobile industry is continuously improving performance with lighter vehicles, new materials and electronic control components, rail transport innovation cycles have been quite sluggish so far. But that is changing: BASF rail logistics experts are working on a revolutionary transport concept that will catapult the Ludwigshafen site from the tank car era straight into the digital future.

The silent revolution

Thorsten Bieker, Rail & Site Services

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electronically and follow at a fixed distance. There is no switching of AGVs and no need for tracks.

Using the AGVs cuts turnaround time from order to delivery from one day to one hour – resulting in more flexibility for internal customers and much lower operating costs. “The introduction of the new internal transport system marks a paradigm shift,” says Andreas Backhaus, Global Supply Chain Strategy & Performance. “In the future, production flow will determine internal logistics, not the other way around – as has often been the case in the past.”

The first AGV prototype is scheduled for testing in real-life conditions in the second quarter of 2017. “The overall concept consisting of large innovative tank containers, a fully automated tank container terminal right on site, and extremely fast transport with AGVs will give business units entirely new logistics opportunities in production and customer delivery,” Bieker believes. n

An Automated Guided Vehicle (AGV) is transport that is automated, transponder- and sensor-controlled. It can travel in both directions and is highly agile because it has eight steerable axles. AGVs can lower and lift tank containers onto metal frames on their own at loading sites.

Automated Guided Vehicle

Length 16.50 meters

Load surface 15.84 meters (52 feet)

Load options ■ One 45’ or 52’ tank container ■ Two 20’ to 26’ tank containers

Load capacity 78 metric tons

Length 13.72 meters (45 feet) and 15.84 meters (52 feet)

Volume 63,000 liters and 73,000 liters

Load capacity 66 metric tons

Gross weight Up to 75 metric tons

Advanced tank container

Site Area K200 and K300

Trimodal Rail, AGV, truck

Platforms with cranes 3

Storage slots 8 for AGVs and trucks

Storage capacity 2000 TEU (to compare: KTL has a hazardous material storage capacity of 300 TEU)

Number of cranes Two fully automated cranes

Crane lift capacity 75 metric tons

Fully automated tank container terminal

AGV convoy The driver monitors the first AGV. The others are linked electronically and follow at a fixed distance.

The new automatic transport system with the new tank containers.

AGV tank container

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What used to take months now takes days. Rolling out new smartphone applications is just one example. Servers should be up and running within minutes. New apps

are installed with a couple of clicks. This trend poses new challenges for businesses and their IT. “In the digital age, speed and agility are what it’s all about,” comments Wiebe van der Horst, Global Processes & Enterprise Architecture. “Our customers and business partners expect us to provide solutions as soon as they need them, or modify existing solutions to meet their specific requirements. So we need

to be dynamic and flexible in our response. Agile IT is thereby vital.”

Agility stands for a new, more flexible way of thinking and working in the digital

transformation era. In the IT context, it means developing solutions step-by-step in short cycles in close collaboration with customers rather than following a long and complex sequence of planning,

development and implementation stages. Agile methods like Scrum (see information box on page 32) are commonly used for this purpose, for example in the BASF project Business Web Strategy (BWS). In this case, perspectives (FOP), Communications & Government Relations (COM) and Supply Chain Operations & Information Services (FS) work hand-in-hand with the business units. The aim is to redesign BASF’s product-related Internet portals to make it even easier for customers and potential buyers to find all the information they need. “We use Scrum, for example, to break down tasks into separate modules, developing fast solutions that we review and improve continuously in collaboration with the business units,” explains Patrick Buchheit, BWS Product Owner. “This ensures that we address and respond to all the requirements.”

The example of BWS shows that agile IT brings better results faster – better, be-cause they are more closely matched to actual needs. For this to work on a large

scale, businesses need to adapt their IT organization to the new circumstances. So does BASF. “Our IT needs to meet different requirements,” van der Horst says. On the one hand IT needs to ensure that core systems like Cobalt are running smoothly, the main criteria here being stability, durability and reliability. And on the other hand IT needs to support fast and agile projects with high levels of customer interaction that involve developing products and services with rapid innovation cycles and short times to market. “Using both kinds of IT as needed facilitates differentiation between activities, which enables us to respond better to the needs of our customers,” van der Horst says.

Implementation of DevOps To establish agile IT in the division, FS restructured its IT organization with effect from January 1, 2017. “Today, many successful IT companies are working in line with the so-called DevOps approach,” says David McGregor, Global IT Delivery.

Fast, innovative, customer-focused service – to respond more flexibly to the needs of BASF divisions and get solutions to market quicker, it takes agile IT.

Achieve goals faster with agile IT

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“This means that Development (Dev) and Operations (Ops) are merged under one organizational roof.” While agile methods like Scrum aimed at achieving speed and close customer interaction have been popular in software development for quite a while, DevOps extends the agile approach to the entire end-to-end process, from design to development to ongoing operation support. There are a number of advantages: “We already use the DevOps approach to implement the Business Web Strategy,” Buchheit says. “Therefore, planning and development teams no longer act separately from the teams responsible for operations, but work together in the project.”

Agile approaches are already in use in other areas of FS as well. For example, the R&D and Lab Solutions department, employing the DevOps approach, has implemented and maintains various laboratory applications and systems for the analysis of data in the research environment. The Bespoke Applications

department, responsible for developing business-specific (bespoke) applications, has also been using agile methods and the DevOps approach for a long time to develop differentiated solutions in close collaboration with customers.

To make DevOps succeed, a cultural change is needed as well as an organizational change. Besides having the right procedures, tools and platforms, it also takes people who embrace this concept and put it into practice. To encourage the necessary change at FS, a comprehensive transformation program has been set up that focuses on a number of key factors. Training is provided for manage-ment and employees, and processes and tools are developed for DevOps and agile methods. Other key elements include streamlining and simplifying overarching and administrative processes and the introduction of collaboration models with internal business partners and users.

IT architecture supports being agile at work An agile way of working also depends on a suitable IT architecture that facilitates flexibility. “Enterprise architecture is like urban planning. It determines what we build in the next couple of years and how we get there. It’s the same with our IT architecture: We determine what BASF’s IT landscape will be like in the future,” says

Gary Brown, IS Strategy & Enterprise

Architecture. “We address customer requirements and market trends, such as cloud computing and big data, and put together these and many other factors that influence our architecture to get what we call the big picture.” The resulting big picture maps out the framework for providing flexible and customized solutions, using low-cost cloud-based standard solutions such as the SuccessFactors HR platform or SAP’s electronic commerce platform

Scrum

Scrum is one of the best known agile project management methods. The basic idea is that a project does not need to be planned every step of the way from beginning to end. Instead, product development takes place in short feedback loops, known as sprints. This enables the project team to check the current state of development at regular intervals, shift priorities if necessary, and respond at short notice to address problems or changes proposed by customers closely involved in the project. Scrum stipulates processes and roles but each team member has a high level of responsibility during implementation. Advantages of the method include keeping better track of projects, better value-added, and shorter time-to-market.

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Ariba as well as operating core processes, as with Finance or other areas. “Our enterprise architecture is the prerequisite for advancing digitalization at BASF with agile solutions,” van der Horst concludes. n

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IT is no longer about simply providing hard- and software and keeping it running. Huge technological changes in mobility and other areas are also opening up new possibilities for businesses, and IT needs to get on track to support these developments. What are the implications for BASF’s IT landscape? What are drivers for change? And where do we need to take action to meet the challenges and better support BASF’s internal partners?

Setting the course for the IT of tomorrow

CUSTOMERS Fast, innovative solutions and differentiated services are increasingly in demand, along with easy-to-use, channel- and device-independent systems. Therefore, customers need partners who understand their business and drive value.

TRENDS Digitalization, mobility and many more developments are changing the business world and the way we work together. Highly available networks and modern devices facilitate mobile workstyles and promote collaboration.

MARKETS High volatility and competition are typical for today’s global markets, demanding faster time-to-market, better cost transparency, and closer collaboration with partners.

TECHNOLOGY The digital revolution offers technological solutions for more agility and customer focus – and fuels market and customer demand in that direction.

What does this mean for BASF’s

IT?

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Drivers for change

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Setting the course for the

future

Supporting BASF’s business

even better

STRATEGY

IT STRATEGY AND ENTERPRISE ARCHITECTURE

BASF needs a common strategic direction for its IT to be flexible enough to adapt to new developments.

An aligned IT Strategy for BASF as well as a “Big Picture” for Enterprise Architecture serve as ’guide rails’ for all future IT developments.

BUSINESS PROCESSES How digital technology is supporting process solutions for effective and efficient day to day

business is largely defined by Business Process Management together with business units,

functions and regions.

SECURITY Tailored security approaches that

address specific user requirements and risks are needed for an effective response to

the changing threat landscape. They are also an essential basis for new business models, innovative tools and ways of working in a globally connected world. The integration of new technologies, such

as big data analytics and cloud computing, into the security architecture likewise

helps to protect BASF.

INNOVATIONS Innovation Management enables new

revenue streams and efficiency increases through active utilization of the latest technologies

at BASF. Agile working on interdivisional teams and intensive collaboration with internal partners and external customers are particularly important in

order to accelerate innovation and tap into new business models.

AGILE METHODS AND MINDSETS

Using agile methods ensures early customer involvement, rapid prototype development and

fast time-to-market. The DevOps concept (see page 30) boosts this by eliminating the separation between

IT development and operations. Introducing agile methods also requires an agile mindset and

the relevant employee skills and abilities.

COLLABORATION ON INTER-

DISCIPLINARY TEAMS In the digital age, trying out new things,

using innovative tools and agile methods, and collaborating on interdisciplinary virtual teams to

shape the change together is more important than ever. Apart from agile IT, a corporate culture of this kind mainly

needs employees who take an active part in the process. Thinking and acting like an entrepreneur,

dealing constructively with mistakes, focusing on end results and also having

the courage to stop things that aren’t working are key values here.

CLOSER COLLABORATION WITH BASF INTERNAL PARTNERS

ENABLING OF DIGITAL BUSINESS MODELS

IMPROVED AGILITY AND FASTER TIME-TO-MARKET OF PRODUCTS AND SERVICES

COST OPTIMIZATION

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Using your personal smartphone for work? Or using a company-owned phone for personal use? This topic is currently being widely discussed. According to a BITKOM survey, almost three quarters of the working population in Germany are already using their personal phone for everyday work. In 40 percent of German companies which employ over 100 people, they even make it official by saying to “Bring your own device” (BYOD). A first step towards BYOD is “Choose your own device” (CYOD). Here, employees may choose from several company-owned devices and use these for professional as well as personal purposes. However, opinions on whether BYOD and CYOD should be practiced vary widely. An overview.

One smartphone for professional and personal purposes?

“BYOD and security are not automatically at odds with each other, as some companies have already proven. Merck, for example, employs a container solution; the storage on the personal

device has a special section that is encrypted and secured with a password. This allows users to switch back and forth between professional and personal interfaces. CYOD makes things even

easier. Since the device is owned by the company, it can be protected with the appropriate software.”

“Companies that allow BYOD need to

buy fewer devices, which saves money.

In addition, they also save money on software licenses.”

“One reason for BYOD would be that personal cell phone are often more powerful and have the latest technology as opposed to company-owned devices. Many employees would not want to do without this luxury in their job. This has even become a selection

criterion when many employees are searching for a job.”

“CYOD enables employees across the company to all use the same software and applications, just as they would with a ’regular’ company phone. This makes collaboration easier, as

exchanging data and collaboration is most effective when all employees use the same platform. Other companies provide their employees with ’company-owned devices’ and allow personal

use when following company-wide guidelines. This also means that there are applications and functions which the company prohibits for security reasons. Employees are also not allowed to

use them even for personal purposes on these phones.”

“It is much more comfortable to only carry one phone which can be used for both personal and professional use. And it saves time.”

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Stefan Beck, Global Business Relationship Management

“Mobile devices – phones as well as tablets – are already a fixed part of almost everyone’s everyday life, whether at home or work. And when I see the number of personal phones many colleagues at BASF are carrying with them all the time right now and then I listen to many individual requests, I can imagine a BASF environment that will offer BYOD down the road. But BYOD will never be the only option on offer – there will always be a good corporate standard service available as a basic offering. CYOD, in the meantime, is a good first step to tackle the many complex topics that are mentioned in the article in a structured way. This is why the next step we see for BASF is CYOD and we are already working on concepts behind the scenes. If our internal partners and employees want this option, then we will provide it.”

“A company must also take into account tax-related aspects such as monetary benefits when co-financing the personal device or allowing personal use of a company device. For example, a monetary benefit would be the release of goods to the employee by the employer at a reduced price or free of charge. According to German law, monetary benefits are considered as income corresponding to monetary income and as such constitute a part of an employee’s taxable income. The monetary benefit then needs to be converted to the corresponding monetary value.”

“How can CYOD be useful to employees if they are only granted limited use of the device because they may not do certain things such as install their own programs or choose the operating system or hardware?”

“Security is an important topic. Particularly when less well-secured personal devices have access to the company network. Therefore, BYOD requires the corresponding IT architecture and security measures which can protect company information and business secrets, which means companies would have to make investments in this area.”

“BYOD and CYOD blur the boundaries between personal and professional life, for example when it comes to professional availability after working hours or access to data.”

“Who is responsible for a damaged or lost BYOD smartphone? Is an offer sent from a personal smartphone legally binding? And what happens when personal use of the CYOD incurs costs? Clear guidelines are essential for successfully implementing BYOD and CYOD.”

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MARKETS & TRENDS

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Standing out from the competition through good customer service, innovative solutions and disruptive technologies are a major challenge for businesses in every area, including the chemical industry.

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The Industry Teams at BASF are living proof that close customer relationships go far beyond merely taking care of their demands. These sector teams are active across unit and division boundaries and play two main roles. First, in order to provide more clarity within and outside

The customer in focusJust a few clicks and it’s yours – if we order something online today, we expect it to be on our doorstep tomorrow. Expectations of customers are rising in the chemical industry too – a challenge for companies. With initiatives like “Fit for Profitable Growth” (FFPG), BASF has already created the conditions for making its organization, processes and actions even more simple, agile and customer oriented.

Knowing the customer

Klaus Wittstock, Industry Advocacy

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the complex company structure of BASF, they bring together expertise, knowledge and contacts and then orient them towards the right sector to meet their needs. Second, there are Industry Teams in the most important sectors for BASF, such as automotive, construction and packaging and they support us to understand the entire value chains within the customer sectors. BASF Automotive Solutions has been

organized as an Industry Group for more than ten years already. Besides having the global Automotive Steering Committee to work at a strategic level, there are also inter-unit teams that focus on regions, strategic topics or customer-related topics. “Having the Automotive Steering Committee makes it easy for us to be perceived as a company in the automotive industry and to act accordingly, be it through joint research or communication

activities or even in joint projects with customers,” says Klaus Wittstock, Industry Advocacy. “After all, joint projects with renowned automotive manufacturers are a great way to develop innovations and lay the groundwork for sustainable mobility.” The automotive manufacturers’ vehicle expertise combined with BASF’s material and system competence have already given rise to a wide range of concept vehicles.

Digitalization is transforming both business models and customer relationships. This trend is being driven by increasing customer demand for individualized products and flexible delivery models.

The customer orders exactly what he or she wants online, any time and from anywhere in the world. This triggers next steps being taken such as the purchase of raw materials and the

delivery of products. As the digital interconnection increases, the customer is no longer merely the purchaser at the end of the value chain, but a trigger at the heart of the

supply chain.

As BASF transforms from a chemicals producer to a provider of chemical solutions, the topic of customer orientation has become much more important

at the company. The concept is a core part of the BASF strategy: “We prove every day that we don’t just make chemicals, we create chemistry.”

Given the speed with which the company has to react to a constantly changing market environment and individual customer demands, BASF’s functional divisions now need to tailor their activities better to the various demands of the business units by practicing service demand management. Service catalogs provide transparency on services and prices. In the future, it will be easier to manage the range on offer and the costs. Governance and services are sepa-rated from one another at an organizational level so that employees in the functions can concentrate on one of the two fields.

For Supply Chain Operations & Information Services, the FFPG program means a further development of the FS Strategy 2025. In Information Services, for example, the Development and Operations divisions will be brought together under one umbrella to enable more flexible responses to customer requirements (see page 31 for more on the DevOps approach).

In Supply Chain Operations, there will be a clear distinction between Services and Governance in future. Led by Ralf Busche, Global Supply Chain Strategy & Performance is focusing on the strategic steering and management of the BASF supply chains in close cooperation with the business units. Global Supply Chain Shared Service Operations, led by

Andreas Rausch, is supporting the business units worldwide in providing administrative supply chain services and physical

logistics services outside Europe with different regional ranges. n

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Reliability is key Being reliable when delivering products is a key factor for supply chain when it comes to customer satisfaction. After all, the right product is expected to be delivered to the right place at the right time. At Nutrition & Health, too, delivery reliability is a vital strategic cornerstone of supply chain management and central to standing out from the competition.

Areas in the supply chain can be impaired by complex processes, weather conditions, geopolitical circumstances and other factors that impede efficient and punctual delivery. In order to analyze exactly which factors influence the delivery reliability of Nutrition & Health (EN) in Europe, a detailed process analysis was conducted as part of a cross-divisional project. This involved the use of a data analysis method1 developed by Supply Chain Operations & Information

Services for the first time. “This method was more than just a robust and structured approach incorporating the knowledge gained from our processes over many years,” says Peter Kieffer, Global Supply Chain Management at EN. “It also allowed us to focus much more quickly on the best topics in order to find the best answers.”

Following the data analysis, the project team discussed the individual

processes and the effects of one action in the supply chain on another. Cross-functional opportunities for improvement were identified, for example, the idea to make sure a purchase order is complete before a delivery is transferred to Transport Management. Checking the opening hours of the customer warehouse was another point for improvement. In addition, the number of deliveries with very tight delivery deadlines was reduced. Meetings with

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customers and suppliers, such as trucking companies, were especially important in order to define together requirements and quality bench- marks that were clearer and more sustainable.

All these measures were a great success: delivery reliability in the EN Pharma Solutions division, for example, rose from 70 to 90 percent. “All in all, there were many reasons why the project went very well,” says Kieffer.

“Good employees, consistent process thinking, cross-functional teams, the use of all colleagues’ expertise and the focus on implementation.” Andreas Rausch, Global Supply Chain Shared Service Operations, was also pleased: “A key success factor was the fact that an interdisciplinary project team from all the units involved along the supply chain looked for improvement potential together. As a service provider, it is especially important for us that all upstream

process steps are conducted without mistakes. Then we can deliver with the agility and quality our customers expect from our services.”

The tools and methods which have been developed are being constantly improved considering upcoming projects and collaboration with customers. The approach is currently also being used in other BASF divisions (you can find a more detailed article on the topic in the FS News). n

1Editor’s note: This refers to the PPI & CIF method: PPI = process performance indicators; CIF = critical influencing factors

Peter Kieffer, Global Supply Chain Management at Nutrition & Health

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It is often assumed that a frontline training initiative is all that is required for service performance improvement. This would seem logical seeing as customer service teams are usually the ones directly communicating with the customer. However, a Voice of Customer (VOC) service survey, with more than 3,000 participat-ing customers across 12 countries, showed that the customer experience depends on the actions and performance of multiple stakeholders in the value chain.

Customer Care, which is part of Supply Chain Operations & Information Services, implemented the Service Culture Transformation program to support business units and functions. The program invites colleagues from Production, Warehousing, Transport Management, Planning, Sales and Finance to collaboratively discuss service issues and drive improvements.

Today, Customer Care in Asia Pacific has 50 accredited service change agents across 12 countries who support service mindset transformation within teams. Through a step change approach, the program increases organizational awareness of customer perception and experience management by adopting a common service vision and language.

“A superior customer service experience creates a competitive advantage for BASF,” says Andy Postlethwaite, Performance Materials (PM) Asia Pacific. “To improve the customer experience, we need to proactively study our customers and adapt our

service offerings and processes so that we can provide the best possible support for their business success. This requires collaboration from all members of the value chain in order to influence perception, customer satisfaction and loyalty, which in turn impacts our turnover.”

Good customer service does not necessarily mean offering more services, but rather offer-ing those services that are in tune with customer needs. “We create value for our customer when our service delivers what is important to them,” says Marianne Rehn, head of Customer Care for Asia Pacific. “With economic constraints and intense competition in mind, we have to continually ask ourselves: Which activities actually create value for our customers and for BASF? And what prevents us from taking better care of our customers? What is blocking us and slowing us down?”

Customer Care implemented the Service Culture Transformation program with PM in Asia, which led to significant benefits for both customers and BASF. “At PM in Malaysia, not only do team members have a noticeable change in attitude with a stronger

Customer experience management is one of the main competitive differentiators in today’s volatile and challenging environment. An example from Asia demonstrates how a change in service mindset across the value chain can improve the customer experience at BASF.

Changing the customer service mindset

Andy Postlethwaite, Performance Materials

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focus on service,” reports Henry Oh, Regional Supply Chain Management at PM, adding, “We are also seeing significant improvement in customer-related KPIs. The delivery times for standard orders have dropped from 42 to 35 days.” Oh continues, “This achievement has greatly supported our customers in meeting their volatile demands and maintaining a lean inventory management. Because we have maintained a momentum of continuous improvement, so far we have increased our delivery reliability by 20 percent. We have achieved a cost saving of €850,000, and positively impacted the top line growth by €4.5 million.” According to Oh, having a cross-functional service vision alongside coordination between teams is the decisive factor in causing this improvement. Other countries have followed suit, addressing their most pressing challenges in a similar fashion.

The overall goal is the same in every country: operational areas may no longer function as “silos”. Customer intimacy is intensified and relationships are built on multiple levels, in order to be able to anticipate customers’ needs. “The objective is to offer differen-tiated services that improve the customer experience, thereby creating value for the business units,” says Andreas Rausch, Global Supply Chain Shared Service Operations & Region Asia Pacific. “We need to look at the interaction points with our customers and at our internal processes from the customer’s point of view. And we need to increase the overall organizational awareness on customer focus by tearing down functional and BU silos which are internal roadblocks to customer satisfaction

and service quality. These are important success factors towards creating a sustainable competitive differentiation.” Just three years ago, the situation looked much bleaker for customer service. An employee survey conducted within the community produced disappointing results, indicating that employees felt unmotivated due to insufficient support, a lack of appreciation, education and development opportunities. Furthermore, BASF ranked behind competitors on level of service according to the VOC survey benchmarking customer experience.

As a result, the decision was made to reorganize Customer Care in Asia Pacific. At the center of it all was a “mindset change” that was needed for the entire organization. Isolated silos in business units were dismantled and an integrated, professional service community was created across 15 countries, supporting all business units. “Strong service performance is built over time, through sustained coaching and best practice sharing by team leaders who are fully dedicated to implementing the vision, who reward success and who are role models for excellent service behavior,” explains Rehn.

In a more recent survey within the Customer Care function, participants said they are motivated, that they feel appreciated for their performance and that their careers offer growth potential. Moreover, it is important that the VOC survey from 2016 shows that customers rate BASF service ahead of the competition in areas like customer service competence, behavior and attitude. n

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Innovation makes the difference

The “Disrupt 100” index includes the most innovative and disruptive companies that show the greatest

potential to influence or change global markets or even create a new market.

The list was compiled by the world’s leading entrepreneurs, investors and

business people.

The most innovative companies in the world1st place: Spiber

The Japanese company Spiber developed a synthetic material that imitates a spider’s web. It is extremely elastic, highly tear-resistant and very resilient. The DNA designs are implanted in micro-organisms and fed with sugar. Thus, proteins are produced that can be woven or spun. Together with the alpine brand “The North Face”, Spiber developed an outer material for clothes. In the future, Spiber materials are also planned to be used in cars.

2nd place: Impossible Foods

Soon, the best burger will be from Silicon Valley. The US company Impossible Foods aims to shake up the global food system by making meat and cheese without using animal products, while retaining their original taste. The company develops proteins and nutrients that are reconstituted. A growing market, if you take into account that expert forecasts state meat alternatives will constitute almost a third of all protein consumption by 2054. Bill Gates and the Union Bank of Switzerland (UBS) are already invested.

21

Photo: Provided by © SPIBER

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The world is changing more and more quickly. Today, creative engineers work for start-ups in industrial lofts, developing new technologies which will in many ways soon completely change the way we live, travel and work. Innovation fields include artificial intelligence, autonomous driving, interconnected transport concepts or blockchain technology (see article on page 52). Ideas and, consequently, tech-nologies are being developed that can quickly replace conventional solutions and thus have a disruptive effect. Apple, Google and others have already successfully shown how this works. For example, Apple’s iPhone revolutionized the market for cell phones and the company succeeded in establishing an entirely new type of device with the iPad. Thanks to this disruptive approach, Apple has had ground-breaking success: With a market value of over US$ 693 billion (status: March 2017), the group is now one of the most valuable companies in the world.

Where large universities were always the ones to show the most recent advances, the scene has changed now: Experts found their own businesses. Uber, an on-demand car service, for example, competes with taxi companies. Streaming media services such as Netflix are in the process of ousting traditional media. Internet companies such as Amazon deliver packages using drones and are working on robots that can independently navigate through traffic – and are finally an alternative to trucks that usually congest narrow streets.

The drivers of such disruptive technologies are often small businesses and start-ups. Their secret recipe: They have a stronger focus on the value for customers, think outside the box and are able to respond to changing market conditions, user behavior and customer needs more quickly and more flexibly. With a greater willingness to take risks while also follow-ing the trial and error principle, they are

creating innovative and sometimes even ground-breaking solutions and services which are succeeding to break into new markets – unlike established companies whose innovative potential is often inhibited by inflexible hierarchies, complex structures and development cycles spanning years.

Yet, when it comes down to it, established companies also need to be ready for the new digital age. It makes a difference when the potential of new technologies is recognized early on as well as the possibilities they have to impact sustainable change in the market or on customer user behavior. In order to do this, companies have to explore new horizons, test innova-tive concepts and methods as well as give employees the space to develop disruptive ideas. Close exchange with start-ups, external partners and universities can also benefit such companies.

An area of research with enormous innovative potential that is gaining importance in businesses such as the process and automotive industries are miniaturized, intelligent sensor systems, also known as microelectromechanical systems (MEMS). Although some MEMS sensors are only the size of a pinhead, they are changing everyday life in many ways, whether in connection with smartphones, tablets or applications for the Internet of Things. Accelerometers, for example, are used in augmented reality1 glasses to measure the position of the viewing direction. Smartwatches record movement and heart rate and sensors in wind power plants automati-cally shut down the plant if vibrations are too strong.

New fields of application are opening up through the ongoing technological progress in microelectronics. This means new business possibilities for companies like BASF, and also creates space for innovative, disruptive solutions of the future (more on page 48). n

3rd place: Windward

90 percent of worldwide trade is shipped by sea, but according to Windward founder, Ami Daniel, shipping is “the last analog market in the world.” The data is often incomplete, inaccurate and lacks transparency. The Israeli company collects data on the entire shipping traffic around the globe and turns it into a global net of ship movement. Similar to air traffic control, Windward tracks ship movement so every ship can be identified and monitored with its time of departure and arrival.

3

Disruptive technologies are turning business models as well as the conditions around competition on their heads and changing global markets – a big challenge for companies.

1Editor’s note: Augmented reality is the use of computer technology to enhance your perception of reality. For example, augmented reality is used when broadcasting soccer games by using circles and lines to indicate the distance between a player to the goal during a direct free kick.

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networks or sensor nodes – that would be equipped with sensors, processors and wireless communication units in order to independently gather and process data and information in real time and then pass it on to other sensor node networks.

Smart dust is not a new idea: Researchers and scientists have been working to miniaturize technical systems for decades. Kris Pister, the “inventor” of smart dust, is one of the pioneers in this field (see inter-view). The University of Berkeley professor was asked to develop tiny computers the size of dust particles back in 1998. DARPA (Defense Advanced Research Projects Agency), the research department of the American Department of Defense, was behind the project. The objective was to monitor enemy troop movements unobserved using the small computer.

Since then, the original idea has developed into a new innovation-driven research field. With so many fields of application, its potential is huge. For example, the minicomputer can be used in factories by placing them in poorly-accessible

Made up of a processor and a memory, it can communicate wirelessly and has its own power supply consisting of a battery, a solar cell and a tiny sensor. The M3 (Michigan Micro Mote) is considered one of the smallest computers in the world. A team from the University of Michigan spent more than ten years working on the one-cubic-millimeter computer. Its task is to gather, save and pass on sensor data. The tiny product can even take photos using a camera with motion sensors. It has already attracted a lot of interest from the oil industry, for example, who could use it in the search for crude oil inclusions.

Can the minicomputer get even smaller and smarter? Its developers are already working on it. The aim is to implant the M3 into the human body to do things such as measure pressure and temperature. Besides making the sensors even smaller, smart connection of these mini computers is another area of great interest. This possibility would finally make the smart dust vision into a reality: the development of tiny minicomputers used for wireless communication – also called sensor

Smart dust motes Connected microscopic wireless sensors that collect data in real time – researchers all over the world are working on ever-smaller tiny sensors known as smart dust motes. But what are they exactly? And how important is this future market for companies like BASF?

The Michigan Micro Mote is one of the world’s smallest computers (shown here for

scale with a dollar coin).

Pho

to: U

nive

rsity

of M

ichi

gan

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Kris Pister is one of the leading researchers in the field of “smart dust” and the co-founder of Dust Networks, a company established in 2004 to turn the concept of smart dust into reality.

You are working in close cooperation with the Innovation Management team at Supply Chain Operations & Information Services. What role does sensor technology play in general and why is it relevant to BASF? Sensor technology is going to be relevant for everyone, from consumers, to retail, to transportation and logistics, to manufacturers, to material suppliers, and the engineers and scientists that lie behind them. Initially via wired communication, and then cell phones, and now with ever-smaller wireless sensor devices, sensor data is coming from places that were never possible before. For chemical companies like BASF, wireless sensor networks can be used to improve the efficiency of the machines and systems that manufacture the materials that you sell, as well as be incorporated into those materials and the products that are made with them. The sensor market is forging ahead at breakneck speed.

What is your prognosis for smart dust? We have seen wireless sensor networks adopted in the harshest environments in industrial process automation, from the Arctic Circle to the Saudi desert. The highly reliable hardware and algorithms designed for these demanding environments won’t be intrinsically more expensive than the consumer grade devices that are being de-ployed in homes today. With at least an order of magnitude improve-ment in size, power, and cost available ahead of us, the application space for wireless sensor networks will grow into many areas.

What are you working on right now?My current work is to make a complete wireless sensor node on a chip the size of a grain of sand, with zero external components. A challenging task.

Three questions for ... Kris Pister

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Innovation Management. “Some sensors already generate their energy from temperature differences or movement. This holds huge potential for BASF to develop innovative solutions for the future, such as ’smart materials’.” Together with various BASF business units and external partners, the innovation team is analyzing the potential of miniature sensors and their fields of application. The team is supported by Kris Pister, the inventor of smart dust, among others. “As we combine smart dust with BASF expertise, we are noticing some very interesting possibilities for applications, which we are analyzing with the business units,” says Schneider. “We are in close contact with Kris in order to understand how sensor technology can open up profitable new areas of business for BASF.” n

locations to monitor temperatures. Sensors fitted onto bridges can report when there is too much swinging back and forth caused by traffic or storms. And sensors in automotive paints could even measure and pass on data on ambient conditions, such as lighting and the distance between objects.

BASF is also working on innovative appli-cations for the latest sensor technology. Together with the University of California in Berkeley and the Fraunhofer Institute, for Experimental Software Engineering, the Innovation Management team at Supply Chain Operations & Information Services (FS) is researching the sensors. “The sensor market is already worth €9 billion and is growing by eight percent every year,” says Fabian Schneider, FS

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Start-up acceleration

In order to drive the innovative process forward faster, many companies work together with start-ups. Accelerators play a role as facilitator. They pre-select potential start-up candidates and also support by coaching the start-ups, establishing networks and providing places to work known as co-working spaces. Accelerators simplify and promote creative and innovative collaboration between start-ups and industry. The FS Innovation Management Team is currently working together with the Performance Materials business unit and an accelerator to identify interesting start-ups, act on ideas and develop new solutions. “Even though we are just getting started, we see a lot of potential to open new markets for BASF,” says Sebastian Alexander Nies, member of the FS Innovation Community. “One idea, for example, would be to use smart sensors to forecast material maintenance and replacement.”

Start-ups in Silicon Valley have been using creative methods such as design thinking to develop innovations for a while. Even large companies are now using these methods even more, which are taught at places like Stanford University. Instead of the traditional way of developing innovations by first focusing on technology, people are taught to understand the users’ perspective and to respond completely to their needs. In a creative, iterative process, interdisciplinary teams develop ideas that are visualized and then quickly implemented and evaluated through the early development and testing of prototypes. BASF also uses design thinking, for example in collaboration with the Karlsruhe Service Research Institute (KSRI) at the Karlsruhe Institute of Technology (KIT), initiated by FS. In one project, KIT students provided the concept for the “tagrow” app and developed a prototype for BASF Crop Protection (AP). The app compiles personalized

information, training materials, product recommen-dations and reminder functions regarding crop protection for farmers and helps them to decide which crop protection products to use including the timing and amount needed. To establish design thinking in BASF projects, employees from FS and AP are currently being trained in this method in an innovation project. “Design thinking helps us to find new approaches, have new ideas and when we develop solutions, go in new directions,” explains Oliver Meyer, IS Business Architecture Marketing & Sales at AP. “Because of dynamic markets as well as the digital transformation we need to act more quickly. Thanks to the new method, we can focus more on our customers and their needs so that we can provide the right solution at the right time. Our customers are closely involved in the development process which is a good foundation to build trust when we collaborate together.”

New methods support innovation development

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Many people have heard of bitcoin, the digital currency. Bitcoins are used to make anonymous payments on the internet. The currency exists only in a digital form. Invented in 2009, bitcoins exist only in the virtual world in the wallets of their owners. Wallets are connected via a distributed network, so there is no bank controlling the flow of money. All bitcoin transactions are stored on every PC connected to this network in an encrypted blockchain. This is a chain of data batches that record and encode transactions. In the case of bitcoin, these are monetary transactions. Blockchain is like a kind of ledger with entries recording every transaction that has ever taken place. The difference is that the database is decentralized and shared across thousands of computers – including ordinary home PCs, because anyone can join in the blockchain network and view any transaction at any time.

Here’s an example of how it works: If person A wants to pay money to person B, this transaction appears as a data block in

the blockchain network. Registered users validate the transaction, after which the payment is included in a digital block along with all the other transactions that have taken place in the last ten minutes. This block is added to the chain and the payment is made. The computer network of users verifies the block chain continuously. Manipulation would only be possible if an attacker brought most of the user network under his or her control, which seems impossible. This principle of decentralized, secure yet anonymous data chains underlies all blockchain applications.

What difference will blockchain make?Blockchain enables users to conduct all sorts of activities, perform transactions and conclude contracts without any central regulatory instance, making digital transactions much faster and more convenient. Although many practical applications of blockchain are still in their infancy, the list of potential uses is long, including land registry entries, certificates of authenticity, food supply chain checks and “smart contracts”. Smart contracts

Blockchain is a database technology designed to make digital transactions faster, cheaper, safer and more transparent. Applications include financial services, accounting and the Internet of Things.

Blockchain – the next digital revolution?

A

?

?

?

??

1A wants to send

money to B

2The transaction is represented

online as a ’block’

3The block is broadcast to every

party in the network

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enact themselves more or less autonomously via IF-THEN-ELSE statements because the terms of the contract are built right into the code. Supply agreements are a useful example. A product’s movements are tracked by GPS and payment is triggered once the shipment reaches the agreed destination. Experts and investors see huge potential in blockchain, as evidenced by the sum of half a billion euros invested in blockchain start-ups in

2015 alone. Blockchain is one of the hottest topics in the financial services industry at the moment. Stock and commodity exchanges expect the new technology to boost efficiency in trading with stocks, bonds and derivatives. In contrast, banks and other financial service intermediaries might be expected to view blockchain technology as a threat because it cuts out the middleman in many cases. Nevertheless, bank managers are receptive to blockchain as a way to slash operating costs, access new business and optimize existing business operations – complex financial service products, for instance, real-time transfer of funds, or regulatory compliance. Santander, a Spanish bank, estimates that blockchain could generate annual savings of US$20 billion in banking alone.

The Internet of Things will see billions of interconnected apps, sensors and devices conducting trillions of microtransactions hourly, and these need to be registered and also paid for in many cases. Conventional technologies would be hopelessly unable to

cope with such gargantuan amounts of data – not so a distributed system like blockchain.

Blockchain technology is changing the lives of many people even now. Migrants wanting to send money to loved ones in their home countries benefit from Abra, a blockchain-based smartphone app that lets users send money with the touch of a button – for a

fraction of the fees charged by conventional service providers.

What are the drawbacks?However promising and impressive this new technology may be, practical obstacles do exist. One is the technology’s immaturity, as the case of DAO shows. DAO is a fully virtual blockchain-based investment company. Just a few weeks after it was established in April 2016, an unknown person stole €50 million by exploiting a vulnerability in the company’s smart contract.

Moreover, criminals can make use of the new blockchain applications. This is already the case on darknet markets, where bitcoin is used as a mode of payment for illicit transactions such as drug dealing.

Whatever happens next, one thing is for sure: blockchain has the potential to write a new chapter in the history of the internet and revolutionize the way we look at business and society. n

✔

B

✔

✔

✔✔

4Miners (see explanation below) verify

transactions block by block and share them in the network.

5The block then can be added to the

chain, which provides an indelible and transparent record of transactions

6The money moves from A to B

Editor’s note: Miners record bitcoin transactions in blocks every 10 minutes and validate the transactions in this way. They do this using a complex code to encrypt each block. Miners receive bitcoins as a reward for the difficult computing work involved. Mining is the only way to generate new bitcoins.

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FEATUREAgile mindset

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FEATURE

The world of work is changing: Technology is transforming companies and the way people work together in organizations. Succeeding in the workplace of the future means knowing how to handle new programs, how to cooperate in networks and how to use virtual means of communication. Being flexible and open to new ideas will become even more important in the future than it is today.

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Digitalization is the central theme of the future when it comes to remaining competitive. But what does it actually mean for employees and managers? What changes will digitalization bring for us? How will our work environments change and what can we do to keep pace with this development?

World of Work 4.0: Changes unlock new opportunities

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Doing the same job in the same place for 20 years? Highly inflexible, constant structures and working models have long outlived their purpose, and not just for millennials. Worldwide mega trends, such as digitalization and the Internet of Things are adding complexity and presenting companies and employees with ever new challenges. As a result, speed and agility are no longer traits that only come into play when new solutions and services are developed. Employees are increasingly required to adopt an entrepreneurial mindset and act independently, while managers increasingly face the challenge of how best to support employees in coming out ahead amidst these changes. Being flexible and open to new ideas, as well as actively contributing to achieving both personal and company goals, are traits that will become even more important in the future world of work than they already are today. This demands a corporate culture characterized by collaboration and cooperation that allows employees to be creative, as well as employees and managers who contribute to shaping the digital transformation and face changes with an open mind.

Digital transformation at BASFBASF is set to seize the opportunities offered by digitalization and has introduced a campaign to give employees a general idea of what digital transformation is all about. “We are aware that rapid development in this area means we cannot provide concrete answers to all questions yet. Also, the answers may

change over time,” says Frithjof Netzer, Project Lead BASF 4.0. “Nevertheless, we want to inform our employees about our digitalization activities and showcase the enormous potential for BASF.”

The Digital Transformation Campaign demonstrates the opportunities of digitalization at BASF, while also addressing any doubts and concerns the employees might have.

“Employees want to know if and to what extent digitalization will impact their work. Therefore, it is important to enter into a dialogue, inform them and address their concerns,” explains Gerwig Kruspel, Cluster Lead HR in the BASF 4.0 project. “For example, digitalization will lead to new job requirements. We are dealing with those requirements by introducing tailor-made learning formats for our employees, who are actively involved in the implementation of pilot projects. Another approach that we are already using successfully is based on the formula: 70 percent learning in daily life, 20 percent learning from others and 10 percent learning from training.” n

Frithjof Netzer, Project Lead BASF 4.0

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Circumstances and demands change, making lifelong learning the key to success. BASF offers a huge variety of training programs. “Learning Slides”, an e-learning tool for creating online training courses quickly and cost-efficiently, will be available soon. E-learning courses are particularly suited to sharing factual knowledge, such as plant-specific guidelines or processes, as well as for preparing for and following up on classroom training sessions. Since the tool is very easy to use, those responsible for training can use it right away without any prior training. In terms of content, the application goes far beyond traditional PowerPoint presentations: along with text, audio and video sequences and charts, interactive exercises can also be included in the slides. These might include multiple choice or slider tasks in which the trainees can provide estimations using a movable slider. The tool is available in 35 languages and can be ordered via the My Link portal starting the middle of the year.

To further develop its programs and courses, the BASF Learning Center is putting a special emphasis on digitalization and collaboration. Besides a great variety of different media on Industry 4.0, the new learning event program for 2017 includes “The Internet of Things – A Practical Overview” in its program. It also includes many

qualification options, seminars and other learning events.

The future world of work also requires new approaches, for example when it comes to building teams. Diversity and inclusion play an important role here; after all, teams are especially successful when they bring together people with different personalities, talents and experiences. The recipe for success is all about bringing together experts from different areas and providing them with enough leeway to come up with unconventional ideas instead of imposing a strict linear organizational structure. This allows synergies that will give customers and BASF a competitive edge. The Advanced Business Analytics team of Supply Chain Operations & Information Services (FS) has already put this approach into practice. The interdisciplinary team combines expertise in the fields of advanced analytics and big data – such as statistics, data mining, operations research and information technology – with business expertise, developing innovative and data-driven solutions for a huge range of applications, including Planning, Controlling, Marketing,Sales, Supply Chain Management andProduction. This approach is largely based on mathematical methods for assessing large datasets – such as machine learning algorithms – and technical innovations in the field of data processing and modeling.

The world of work is constantly changing and employees and managers need to acquire new knowledge and learn new skills all the time. BASF is expanding its training courses on digitalization and offers a new tool to make learning easier.

Lifelong learning

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Lifelong learning

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As the world of work changes, so will aspects such as job profiles. The Supply Chain division, for example, will sometimes require more IT expertise from its employees, such as in the case of digital supply chain experts. Other needs may focus more on strategic issues, such as in the case of supply chain service designers and global supply chain network designers. The latter, for example, analyze the efficiency of the network of existing transport routes and storage sites in the event of changes in customer demand. They identify improvement potential and develop a plan for optimization. The FS project “Kufuzu” was implemented, in cooperation with supply chain managers from the business units and process experts, to identify training programs that are best suited to the employees’ skills and requirements. Role descriptions

Global collaboration in both day-to-day business and international projects

is already a matter of course for many of our

employees. This has resulted in the need to work together in a virtual environment.

This is one example of how needs for flexibility and accountability have changed

in just a few years. In order to fully seize the opportunities arising from digitalization,

our culture of collaboration and management needs to be continually

developed so that greater open-minded-ness, initiative and creativity are included.

“

”Jürgen Lahr, head of Human Resources at Supply Chain Operations & Information Services

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as well as technical and personal competencies required to perform specific roles and tasks have been specified, such as in planning the supply chain. “These roles and tasks must be clearly defined,” said Liesbeth Van Vreckem, Global Supply Chain & Business Solutions at Dispersions & Pigments. “Knowing the requirements for each and every job position’s profile are the foundation of successful personnel planning. Selecting employees with specific qualifications while ensuring continuous training are the core tasks of supply chain managers.”

About 2,000 employees from Supply Chain Education alone participate in the training courses offered on the “Learning Solutions by FS” training platform every year – and this number is increasing.

The “Supply Chain Essentials” program, for example, offers a sound basis for on-boarding new employees in the supply chain environment. The program aims to provide a better understanding of the terms and processes used at BASF and to offer a general overview of supply chain activities. Feedback from participants was very positive about the interactive concept. To make learning more flexible and reach employees at smaller sites, 2016 also saw the introduction of online courses for the APICS1 certification program.

“Connected Leaders” programs are offered to keep supply chain managers up to speed and foster continuous exchange. These programs include regular virtual seminars on topics such as “The future of the supply chain”. n

New job profiles

Increasing digitalization means not only that work environments will change, but also that new job profiles will be created, such as that of a data scientist. Data scientists’ tasks include translating business requirements into advanced analytics solutions, extracting the valuable information from huge masses of data and developing models. They analyze structured and unstructured data, develop algorithms and identify business-critical information. For example, this makes it possible to prepare customized offers for customers in seconds or to plan business and production processes efficiently. Digital business managers also have excellent future prospects. They are needed to stay on top of the opportunities of digitalization and to select suitable technologies for implementing them in the company.

Knowing the requirements for each and every job position’s profile are the foundation of successful

personnel planning. Selecting employees with specific qualifications while ensuring continuous training are the core tasks of supply chain managers.

“”Liesbeth Van Vreckem, Global Supply Chain &

Business Solutions at Dispersions & Pigments

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FEATURE

The workforce is changing rapidly. Young people are looking for much more flexibility, not only in the work environment, but also in terms of where they can do their work from. David McGregor, head of Global IT Delivery, has a global role at Supply Chain Operations & Information Services and steers his global team from North America. For him flexibility is a very important aspect of his work life.

“Flexible working models are critical to our success”

Those of you having global roles know it is not easy dealing with a team that’s spread around the four regions BASF operates in. Flexibility and the ability to work virtually is therefore very important for me. I spend my time working either from my office in Florham Park, from my home office or at least once or twice a month in Ludwigshafen, which is very helpful in order to try to manage a global diverse team.

I spend every morning from 6am in the US to about 1pm, which is the core European office time, working virtually in sessions with my team worldwide. The old thinking of having to get up every day and drive to the office, spend time in the office, those days I think are long gone. And just think about the productivity: When I get up in the morning and take a call from home at 6am, it takes me just about five minutes: I walk downstairs from my bedroom, grab a coffee, go to my home office and I am immediately productive. If I have this call at 6am and have to go to the office, I have to get up at 4:30am, spend an hour driving to the office in order to be online at 6am. It does not take a rocket scientist to pick up which is the better approach and where both the employee and BASF get more out of the scenario.

As far as virtual working relationships go, I think there are different schools of thought on that. When we first introduced this concept in North America five or six years ago, it was not generally well accepted at first. It is difficult, I think, for managers to embrace their virtual working relationship, because you do not always see

David McGregor, head of G

lobal IT

Del

iver

y

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your team members on a daily basis sitting there in front of you, you can’t meet them at the coffee machine, you can’t see them in meeting rooms.

My opinion was different: I think, if you give an employee flexibility, if you allow them to tailor where they work from, the times that they work, you can get much more productivity out of these employees. And that’s what I have experienced here in North America and I have also seen that in my own FSI team globally. By introducing new tools like WebEx, I think, we have helped move this whole virtual topic forward.

Take a working mother for example who wants to spend some time with her children during certain portions of a day, maybe get them to the school bus, or back and forth from school. Does it really matter where she sits? I don’t think so. If you give employees flexibility, they will go the extra mile – that has been my experience. They will put in more time, they invest more in their roles, if they feel the company is

meeting them halfway. By offering them these

flexible arrangements, I think, that is a step in the right

direction.

Of course, there is also an accountability associated with working virtually. The company is putting a trust in you to say that you are going to deliver the objectives and targets that they set with you. It is all about trust. And I think when we trust each other the benefits are immense!

As leaders, challenge the status quo! Get out there and really try to push these flexible working relationships. You won’t regret it in the end. It is harder as a leader to manage remote employees but it is our responsibility to do that – to give our employees the flexibility they need to do the best job they can, but also maintain their work-life balance. That is really what a flexible working relationship does at the end of the day. n

Daniel K

ehrer, OTC Solution Design

“It is important

to trust employees based on their work results, instead of

just focusing on the where, how and when. I am a father of a four-year-old and my priority is to be home in time

for dinner in order to spend some time with the little one. I don’t mind checking

my emails afterwards, if need be. I really appreciate this kind of

flexibility and a sense of ownership.”

“As a mother of two

almost grown-up daughters, I have come to appreciate flexible

working models. When the children were little, my husband and I coordinated

our working hours. Flexible working models make day-to-day work much easier – and in the Netherlands, working from home was an option even 19 years ago. It is also usual in my team today. I believe it is important to foster a good work-life balance using this

approach. In my experience, it also promotes motivation

and commitment.”

Cha

rlo

tte B

usscher, Global Communications Supply Chain Operations &

Inform

ation S

ervices

“Virtual global

collaboration is nowadays the norm. WebEx, Jabber etc.

provide a high degree of flexibility and agility, with virtual meetings now part of everyday business. However,

some topics – such as performance reviews – are very difficult to discuss over the phone, since it is not really possible to build strong

personal relationships in a virtual world. As a company, we need to find the

right balance between virtual collaboration and face-to-face

meetings.”

Elz

bie

ta W

iank

owsk

a, G

loba

l Sup

ply Chain Operational Design

What do other managers have to say about flexible working (hours) models and virtual collaboration? What is important to them?

“Together” found out.

“For

me a good employer is ...”

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FEATURE

BASF supply chain looks back on a very successful 2016, receiving a total of three awards. In the renowned Gartner supply chain ranking of companies with the highest turnover worldwide, BASF took first place among companies from the chemical industry and came in 20th place in the worldwide ranking – therefore placing in the top 25 for the first time. A few months later, BASF supply chain received its second award. This time it was the “Supply Chains to Admire” award 2016 from the American organization “Supply Chain Insights”. “Our approach to continuously improve in supply chain management and intensify collaboration with our customers has enabled us to take a huge step forward,” says Ralf Busche, Global Supply Chain

A competitive supply chain is the backbone of modern industrial enterprises. What does this mean for the BASF supply chain, since we are an integrated part of other supply chains along the entire value chain – from supplier to customer. A new film shows how BASF manages to deliver the right product in the right quantity to the right place – safe and on time – using innovative and sustainable solutions. The digitization of supply chains plays an important part and contributes to the success of BASF and its customers. You can find the film on the FS intranet. n

Strategy & Performance at Supply Chain Operations & Information Services. “We are right up there in the supply chain Champions League as a chemical company and are able to hold our ground with renowned companies such as Apple, Amazon, Unilever and P&G when it comes to supply chain. It’s a remarkable feat, given that we serve almost all industries and face a unique degree of complexity. We are currently working on important topics such as the digitalization of the supply chain, customized supply chain strategies for our various BASF businesses, and differentiated services. In addition, we have made huge progress using modern methods and technologies to enable faster and better decision-making based on big data.”

Sustainability also plays a key role in the continuous optimization of the BASF supply chain – which was clearly demonstrated by the third award received in October. BASF was awarded the “Salzberg Medallion” by Syracuse University for its sustainable supply chain. According to the award committee, BASF was chosen based on its “commitment as an innovator and leader in supply chain sustainability through its Verbund initiative. This interconnectivity of infrastructure, employees, technology and customers will have a profound influence on future supply chain designs.” The “Salzberg Medallion” is regarded as one of the most coveted awards in the field of Transport and Supply Chain Management. n

New film on BASF’s supply chain

A successful year for BASF supply chain

64 together 1/2017

IN BRIEF

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Artificial intelligence and enhanced machine learningThe term “artificial intelligence” is used to describe intelligent systems which, in addition to executing programming commands, are able to understand, learn and act independently to a certain degree. Machine learning technology makes this possible, which recognizes patterns and creates links on the basis of large quantities of data – much like the synapses in our brain.

Smart appsEven today, we are not just operating programs on smartphones via the system’s menu, but we are “talking” with apps – such as Cortana, the language assistant from Microsoft, or Siri, the language assistant from Apple. These virtual personal assistants will make our lives easier in the future. Much like real assistants, they will assist us with daily office tasks, for example by organizing meetings and prioritizing emails.

Smart thingsWhether robots, drones or autonomous vehicles – more and more objects have their own impressive “machine IQ” thanks to the advances in artificial intelligence and machine learning. It is increasingly becoming “normal” that these objects communicate with their environment and with people and that they are connected and “collaborate” with one another – such as in smart homes.

Virtual and augmented realityWatch a concert from the sofa as if you were there live or take a virtual tour of your future apartment from different angles. The augmented reality (AR) technology makes this possible by overlaying digital elements onto real-world objects. When pointing their smartphone camera at a restaurant, for example, users will have access to additional information such as customer reviews on their display. AR is also increasingly finding its way into companies. Employees in a plant, for example, could learn how to use a new machine with an interactive AR tutorial.

Digital twinsTwo are better than one: In just a few years, hundreds of millions of things are set to have a digital twin – a virtual representation of a process, product or service. Digital twins gather and analyze data using software on a cloud-based platform. Using this information, companies are able to monitor their plants and plan preventative maintenance measures.

Source: Gartner

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technology trends 2017The top 5

ImprintPublished by BASF Business Services, Supply Chain Operations &

Information Services, Charlotte Busscher

Editor in chief Rabea Magin (Responsible); Simone Mennemeier-Wernsdörfer

Contributors to this issue Christina Thenuwara, Daniel Lawler

Photos BASF; iStockphoto: page 2/3, 10, 12/13, 14/15, 16/17, 24, 26, 30/31, 32/33, 36/37, 38/39, 42/43, 44/45, 46/47, 50/51, 54/55, 56/57, 58/59, 60/61, 68

The digital age –

on the road to Industry 4.0

togetherThe global magazine of Information Services & Supply Chain Operations

1//2016 togetherThe global magazine of Supply Chain Operations & Information Services

Mobility 4.0

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