Evonik Industries September 2020

DIGITALISATION OF THE CHEMICAL INDUSTRY IN ASSOCIATION WITH

EVONIK INDUSTRIES

DIGITAL REPORT 2020

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DIGITALISATION OF THE CHEMICAL INDUSTRY

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EVONIK INDUSTRIES

Henrik Hahn, CDO Evonik Industries and Chairman of the Management Board of Evonik Digital GmbH, on the importance of technology in the chemical industry, the impact of COVID-19 and digitalisation

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A

fter graduating with an engineering doctorate in the field of fluid dynamics and Rheology, Henrik Hahn, Chief Digital

Officer of Evonik Industries and Chairman of the Management Board of Evonik Digital GmbH, began his career at Evonik Industries more than 20 years ago, in the process technology and engineering department. Afterwards, he moved to chemical research and development, headed a corporate start-up, later joining the corporate strategy department before taking his current role.

When it comes to establishing a digital innovation strategy, Hahn says that Evonik Industries first approach to establishing a strategy is to establish how the strategic business unit and functional departments can benefit from the use of digital technologies and take advantage of a data centric approach. “Innovation is not fulfilling any self purpose. We are trying to make it a part

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EVONIK INDUSTRIES

BRINGING IN NEW TECHNOLOGY MEANS CHANGE, THEREFORE YOU COULD ARGUE THAT DIGITAL TRANSFORMATION IS NOTHING MORE THAN A BIG CHANGE MANAGEMENT PROGRAM 06

of the strategy for a specific strategic model, putting people at the heart of this realisation. While I believe it is unlikely that the chemical industry will see a real disruptive transformational change, it will be lifted into the digital age. So we are looking to see how new technologies and data centric approaches can support our overall strategy and drive efficiency.”

However, Hahn emphasises that “bringing in new technology means change. Therefore, you could argue that digital transformation is nothing more than a big change management program. As a result, everything starts

— Henrik Hahn, CDO Evonik Industries and Chairman of the Management Board of Evonik Digital GmbH

with being aware that we are about to change not only internal processes but processes relating to external operations.” Breaking down digital transformation into four elements: create, communicate, deliver and exchange offerings, Hahn explains that along this journey, each element must be informative and inspirational for people as well as understandable as to why the transformation is taking place. “The people dimension is key. It’s not just about technology, it’s much more about people, trust and

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07 explaining why we believe that digital

where other industries have been

transformation is something that will

lost.” Hahn further comments that in

occur in our industry. Without people

today’s digital era, “representatives

even the best technology will never

of our industry have broadened the

materialise if people do not under-

technology discussion from a produc-

stand the benefits.”

tion or R&D standpoint, to harnessing

In the chemical B2B space, Hahn

technology in the administrative

reflects on the industry’s technology-

space relating to the digitalisation

centred approach. “With engineering,

of corporate finance and human

technology and sustainability at the

resources, taking advantage of artifi-

heart of most industries, being an

cial intelligence (AI), robotic process

early adopter - particularly when it

automation (RPA) and blockchain.

comes to production and technol-

With every aspect of our business

ogy - has ensured that the chemical

being affected by technology, we

industry has sustained its place,

need to ensure that we have the www.c o rpo ra t e .e vo n ik. com

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CDN NODES Worldwide

200+

63

21

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Global Regions

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foundations in the form of data to enable this technology.”

When it comes to digital transformation at Evonik Industries, Hahn details that “looking into the production space, everything is centred around smart operations and interconnectedness.

As a result, network and IoT solutions can be utilised to improve the flow of information and improve access to insights within the production plants by taking advantage of sensor technol-

BEING AN EARLY ADOPTER - PARTICULARLY WHEN IT COMES TO PRODUCTION AND TECHNOLOGY - HAS ENSURED THAT THE CHEMICAL INDUSTRY HAS SUSTAINED ITS PLACE, WHERE OTHER INDUSTRIES HAVE BEEN LOST

ogy and data exchange. From a supply 09

chain perspective, machine learning models increase the efficiency of the entire supply chain network. Then, from a marketing and sales perspective, ecommerce is becoming increasingly important in the B2B space and chemical industry, not only to benefit from transactional efficiency gains, but

— Henrik Hahn, CDO Evonik Industries and Chairman of the Management Board of Evonik Digital GmbH

also the ability to operate and engage almost 24/7 with potential and existing customers.” Another key aspect for Evonik Industries, that has only increased with the impact of COVID19, is the ability to enable remote interaction. “Not only in the current pandemic situation it is advantageous to utilise immersive technologies like www.c o rpo ra t e .e vo n ik. com

EVONIK INDUSTRIES

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augmented and virtual reality to con-

where do trends come from and where

duct interactions with our customers

are they being driven forth? Which led

remotely providing expertise on prod-

me to Alibaba and IBM, for example.

ucts and applications.”

Partnerships in my view are really

In order to drive the company’s

essential in order to develop innovative

digital transformation, Hahn explains

business model components, driving

that as part of his role as CDO, he is

collaboration and learning from others.”

tasked with looking into opportunities

Expanding on the impact of

for partnerships within the industry and

COVID-19, Hahn reflects that “in

cross industries. “We have a couple

comparison to other sectors the

of partnerships with large technology

chemical industry is doing relatively

companies as well as smaller compa-

well. I believe that the reason for this

nies and startups. When we started our

is that the industry is still generating

transformation journey, I asked myself:

output. At Evonik Industries we are

taking it very seriously to comply with

where a company finds itself isolated.”

social distancing while maintaining

Post COVID-19, Hahn explains that

our production. A particular challenge

“it’s of course very hard to tell what

that I have seen within the industry

the future will look like, but I think the

is isolated supply chains. At Evonik

chemical industry itself is robust and

Industries – probably as well as in

we will more or less manage to get

other companies – we need to ensure

through 2020 without too much trou-

that we mitigate the risk of having an

ble, as our world relies on the chemical

isolated supply chain. When it comes

industry. Without chemistry the world

to international supply chains, it is very

would be dull, dark, and simply dis-

important not to undergo a situation

astrous. We would have no iPhones,

E X E C U T I V E P R O FILE :

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Henrik Hahn Title: CDO

Company: Evonik Industries

Industry: Chemicals

Location: Germany

Henrik Hahn (52) is Chief Digital Officer at Evonik Industries and Chairman of the Management Board of Evonik Digital. Hahn studied Process Engineering and within his Doctorate research in the field of fluid dynamics and rheology he developed a framework for turbulence phenomena using data analytics and modelling techniques. He also obtained a degree in Business Administration and Industrial Engineering and is experienced in information economics and game theory. He has previously worked in various management positions in the area of innovation and technology including the responsibility for a Corporate hightech startup and joined Evonik in 1999. www.c o rpo ra t e .e vo n ik. com

EVONIK INDUSTRIES

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INNOVATION IS NOT FULFILLING ANY SELF PURPOSE. WE ARE TRYING TO MAKE IT A PART OF THE STRATEGY FOR A SPECIFIC STRATEGIC MODEL, PUTTING PEOPLE AT THE HEART OF THIS REALISATION 13

— Henrik Hahn, CDO Evonik Industries and Chairman of the Management Board of Evonik Digital GmbH

www.c o rpo ra t e .e vo n ik. com

EVONIK INDUSTRIES

AT EVONIK INDUSTRIES WE ARE TAKING IT VERY SERIOUSLY TO COMPLY WITH SOCIAL DISTANCING WHILE MAINTAINING OUR PRODUCTION

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— Henrik Hahn, CDO Evonik Industries and Chairman of the Management Board of Evonik Digital GmbH

2007

Year founded

€13.1bn+ Revenue in Euros

32,000 Number of employees

no LED lighting, no almost anything.

Almost everything in our world is centered around chemistry, from the food we eat to health care to mobility.

The chemical industry, in other words, acts as the industry of the industries.

Therefore I’m really optimistic that even if we face challenges we will have a bright future and act as an innovation engine, to enable new or better product solutions.”

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EVONIK INDUSTRIES EVONIK INDUSTRIES AG RELLINGHAUSER STRASSE 1-11 45128 ESSEN GERMANY T + 49 201 177-01

www.corporate.evonik.com

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