Annual Report 2013

Henkel worldwide

We will drive our operational excellenceoperational excellence
A comprehensive program to structure and optimize all Henkel’s business processes based on customer needs, quality and efficiency.
and continuously improve our competitiveness by standardizing, digitizing and accelerating our processes, focusing on end-to-end optimization and increased cost efficiency.

In 2013, we laid the foundation for improving our competitiveness through a broad range of initiatives. These included the integration of our information technology (IT) landscape, standardization of processes, establishing the Integrated Business Solutions (IBS) organization and the implementation of digital and global sourcing programs.

Strong IT focus

We are convinced that digitization offers substantial potential to improve our competitiveness: Standardized IT platforms that provide real-time data will increase speed, flexibility, and efficiency across all our businesses and functions.

We aim to reduce complexity by standardizing processes and consolidating various IT systems within our scalable global SAP platform, “Horizon.” In 2013, we made significant progress: In the Asia-Pacific region, we successfully converted more than
20 different systems to our new SAP platform. This was another important step toward our goal to reduce the overall number of processes to around 800 by 2016. Leveraging this integrated platform on a global scale over the coming years will drive operational excellenceoperational excellence
A comprehensive program to structure and optimize all Henkel’s business processes based on customer needs, quality and efficiency.
.

In addition, we made preparations to implement a state-of-the-art digital workplace for all Henkel employees worldwide in 2014. By transitioning to this new platform, we aim to improve digital collaboration and dialog, and to expand knowledge sharing across our global organization in order to increase productivity and competitiveness.

Best-in-class processes

Over the past years, we have set up global shared services with more than 2,000 employees in four different centers around the globe. By the end of 2016, the number of employees in shared services will grow to more than 3,000. In 2013, we integrated our shared services with our IT into one newly established Integrated Business Solutions (IBS) organization. We expect IBS to become an important factor in delivering on our 2016 financial targets. IBS will help to establish end-to-end processes across all business units and functions and provide higher transparency based on real-time information. This will improve the quality and speed of decision-making in a highly volatile business environment.

Cost efficiency

In 2013, we began to implement our “Sourcing@Best” initiative – aimed at improving our cost efficiency and increasing the flexibility of our global sourcing processes. We will consolidate our sourcing operations into eight global sourcing hubs.

As digitization offers substantial potential to optimize cost efficiency and increase transparency in sourcing processes, we have established an integrated eSourcing platform across all regions. This platform captures in real time all data relevant to purchasing spend, supplier portfolio and supplier performance. The share of eSourcing has increased substantially over recent years: In 2013, it rose to around 18 percent of total spend compared to around 10 percent at the end of 2012.

Driving transformation through standardization and digitization