Heineken Slashes Supply Chain Woes With Connected Brewery Ecosystem

Consumers are becoming increasingly more demanding, and to keep up, visionary CPG companies are heavily investing in resources and technologies that not only meet these shifting needs, but also optimize the workforce so the benefits trickle down to the end customer. The Heineken Company has taken this to the next level, embarking on a connected ecosystem for data providing easy access to the insights that are allowing the company to innovate with speed and agility. Learn how Heineken’s global initiatives have transformed the company, and how to apply these informative insights to your own business, in this edited conversation with Wiggert Deelen, The Heineken Company's senior director of global supply chain transformation. Learn from Deelen about how the beverage giant has used a Connected Brewery Ecosystem, which combines apps, an IoT platform, dashboards and analytics, to optimize manufacturing and distribution, as well as manage the network for the future. Lisa Johnston: Hello, everyone, welcome to “How Heineken's Connected Brewery Ecosystem Fuels Automation.” My name is Lisa Johnston, the senior editor at CGT. I'm excited to have you with us today. The future of manufacturing sits within the smart factory. Today's most visionary consumer goods companies are investing in the tools and technologies that enable employees to perform their jobs more efficiently and effectively, but at the same time, provide analytics and insights to power automation. The Heineken Company is one example with its Connected Brewery program. Joining us are Wiggert Deelen, senior director of global supply chain transformation at The Heineken Company and Justin Honaman, head of worldwide CPG and retail go-to-market at AWS. Today, they’ll share how Heineken is optimizing manufacturing and distribution through the connected brewery ecosystem and managing its network for the future. Justin, I’ll let you set the stage with some insight on today's industry priorities. Justin Honaman: Thanks, everyone, for joining us today. I’m excited about this topic and our conversation — you’ll love hearing from Wiggert; Heineken’s story is incredible. If you're in the industry, you know that anything with the words supply chain, manufacturing, distribution, or logistics is top of mind right now. Timing for this discussion couldn't be better. You’re going to learn from some of Heineken’s best practices. Our goals for today are threefold: I'm going to share a quick snapshot of what we're seeing across the CPG industry in this space, very briefly. We’ll talk about Heineken, as well as Wiggert's role and the program at Heineken. We'll dive into the connected brewery concept and provide some takeaways in terms of how to apply that thinking. First, let's talk about what we're seeing across the industry. Across industries, not just CPG, but in agriculture, process manufacturing, industrial transportation, etc., there is a lot of pressure on the supply chain. Yes, this is obvious, but we're also seeing an acceleration in new capabilities around that, which started 12-18 months ago. Thinking about some of the challenges that go with this space, such as disparate data in multiple back office systems, for many brands, operation facilities are operating individually. One factory's data might be there, but is not available to another factory, or even as a roll up. This creates individual manufacturing locations that are disparate and not connected. Then, when you try to connect them, it's not so simple. They may have the same technology, back office, and systems, but because they're built differently or different versions, they don't connect and talk to one another. At the end of the day, we are in a space where we're trying to drive better decisions. This whole idea of supply chain visibility is a big one. What are some of the typical use cases around this space? For those of you embarking on a connected factory, digital twin, digital manufacturing, etc. story, there are several use cases you might be thinking about. My coaching to you is to take one of these and work backward into the data, then the solution that could support it, and do a proof of value or proof of concept to prove it out. You're going to hear from Wiggert about how Heineken has proven that, then cascaded and commercialized the solution to market. Finally, there are areas you’ve probably heard of in the industry — track and trace, visibility, computer vision — that create this idea of a connected plant and digital twin. These aren't just buzzwords. They're real and there's capabilities out there to support making you successful in advancing innovation and manufacturing. With that, Wiggert, thank you for joining us. Today, the spotlight is on you and the success of the program you've built. Let’s start by sharing a bit about your role and what your focus is at Heineken. Wiggert Deelen: Hi, thanks for having me. I've been at Heineken more than 25 years and have had many operational roles in the supply chain. At the moment, I'm focused on the Heineken EverGreen Transformation, which is a strategic company program with several different legs — I'm overseeing one of them. We started during COVID. As a big company, we were hit in the heart. As a company, what we do is bring people together, and that was no longer possible. We began with a lot of emphasis on protecting the company and making sure that costs were in line with what we could afford at the time. At the same time, we added programs to build the future of the company — sustainability, digitization — those are the buzzwords in there. I oversee many of these programs, digitization of the supply chain being the big one. Today, we’ll talk mainly about digitalization of manufacturing, which is what the connected brewery here is about. Honaman: I know the audience will immediately be asking where did you begin? What were the use cases you were looking to address? You didn't just start the program this year, as you mentioned, you started this some time ago. What were some of the use cases and items you were looking to solve for before you jumped into the program? Deelen: We started exploring four years ago. In the beer industry, it's about asset utilization. Beer is a very asset-intensive industry. Getting operational excellence up is a continuous improvement that is very important. We were running continuous improvement programs for many years, which are fueled by deployments. Those deployments are fueled by insight into the losses of our operations. By digitizing the whole plant, we’re given the insights on a plate, making it much easier than ever before. There were many administrative systems that were manually recorded with Excel sheets and PowerPoint around it. However, we realized that if we could connect live data and start collecting and combining them, we would have insights much faster, in real-time, and would be able to act on that more quickly. Honaman: Where did you begin? Did you start at the plant-level or did you start at a senior level to drive buy-in and engagement? Where did you begin to get alignment? Deelen: It was at the senior level. I was in an operational role in Europe at that time and saw that I needed to start this program. I connected with my boss to get his sponsorship and support to start experimenting. We began by getting a few people, a small team, off the ground. Then, we went to one of the plants in Europe and said, "Well, do you want to be the Guinea pig? If we're successful, you will be the hotspot of industrial tourism in the future. Do you want to work with us on this?" We took a plant in Poland, which is already performing at a high level of operational efficiency because we wanted to prove that by digitizing, we could bring it to the next level. We started by connecting them to the cloud in 2018. Honaman: Initially, the focus was on visibility within that one location. Is that correct? Were there any findings out of that first site? Any quick hits or things that immediately became obvious? A moment of, “ah, this is why we're doing this”? Deelen: Quite a few, of course, because you get real-time data and real-time insights into your losses. We started with a production line, which was actually too low in its output because the market was growing quickly and we had to find ways to increase the output. We asked the line leader, "What type of information do we need to reduce your losses?" He sat next to a whiteboard and started to draw graphs and a dashboard that he would like to see in the morning, that would depict the past 24 hours. By unlocking the data, it was possible to build that dashboard for him. The big breakthrough was that with streaming all that data and putting in the data layer, we could increase the transparency in the operation tremendously and present facts about what happened in the past 24 hours, or the past week. That would immediately lead to targeted interventions and inform the decisions better than ever before. Honaman: What things did you have to do in the facility? Can you explain the "how," within that facility? What did you change — technical or process? What did it look like in that one facility, in terms of making this the pilot location? Deelen: It started very technically in the sense that we put a kit, a Connected Brewery Kit, developed by our partner. The kit is a firewall with two computers — on one of the computers, there's a capware running and on the other computer, it's AWS Greengrass. This kit, and the software running on it, can connect to PLCs, but also systems of record, collecting data. With that kit, we can see in real-time, the operational performance indicators, making this a line on a scale that we couldn't imagine was possible. At the end of the week, with this dashboard on an iPad, we could see the line running but it was only the start. After that, people started to understand that they could have the history of production in a level of detail they never had before. With that information, people can eradicate the loss much more quickly instead of going through the list. Previously, individuals would have to take a list, take boxes, and if a minute was lost because of this reason, that information is now fully automated and available. Honaman: The Smart Brewery Program includes IOT reporting, analytics, and robotics, but there's also a component to this ecosystem that you put together around the connected worker. Can you talk a bit about that and how you are able to use what you did in that initial facility to drive task management? Deelen: I mentioned continuous improvement. This is a program that some people refer to as lean or TPM. At the heart of the TPM is the operator and their equipment — maintaining the equipment, taking care of the equipment. With TPM comes more tasks for the operator to be performed. We felt these jobs, as well as the information people needed to know to perform their jobs, was getting increasingly more complex. The digital program needed to be about supporting operators in their increasingly complex tasks. You still see this slogan in the program everywhere, which was part of the thinking. Then, we help them by automating their cleaning, inspection, lubrication, and tightening standards. We’ve put those instructions on the screen. Following the Kaizen process is now also supported by an app. All the information, access to colleagues, and collaboration tools that are needed for the operator is in the palm of their hands. That is very powerful because the information would be in books or on paper, communication was by email and in notebooks — all of this was put into digital format into the palm of the operator’s hands. That was also a big step forward in getting them on board of course. Honaman: Was that a big change management effort, especially in that first facility? Transitioning to that technology and then also having more data and insights than you've had in the past. Deelen: Absolutely. Although, like many digital applications, when you make it intuitive, and in such a way that you solve a direct problem, adaptation can be quick. To be honest, it's been varied. Some connected worker apps have been adopted across the world at phenomenal speed, others needed a bit more persuasion because they were more centrally guided. The ones that were most successful were the ones that left a lot of freedom locally to be developed and to work with. Creating work instructions for a changeover — if people can do that themselves — there is a very quick adoption rate. There is a level of self-control, or defining your own destination, that helps in adoption rate. We have the same with our IOT — using Grafana dashboards individuals are able to define their own dashboard. That helps with the adoption because they are able to start collecting the data for the processes that they have the most problems with, which varies from side-by-side. Honaman: You spoke about your first facility. How did you think about A: getting alignment and doing it across more facilities; and B: what's next? Do you plan a segment of the facilities and to roll it out to, or how did you think about that deployment? Deelen: We started to deploy the connected worker apps before doing IOT because technically it's a bit more complicated. We now have 14,000 people around the world using those apps, which was done with a regimented program — brewery by brewery, around the world — with a free set program. We're still on it, we’re not done yet. Then, in the IOT space, we have 26 breweries connected at the moment. We want to do at least another 10 this year, then we'll continue in the next two years. By that time, we should cover most of the globe with the applications. Honaman: As you've progressed that deployment — we’ve come in and out of COVID, then into the supply chain challenges — you began this program prior to all of that, was that good timing? Has that been able to help you in terms of visibility, operational planning, and execution in the last year or two? Deelen: Yes. Like I said, we didn't actually start it for that reason. We started for loss intelligence and operational transparency to help get the operational excellence up. Now, of course, with all the supply chain disruption, there is a need for real-time visibility into many processes in the supply chain. We haven’t been using IOT for that yet because we have been concentrating more on visibility upstream. Our material flows into the plants, which was more important to fix straight away. Of course, there are some long supply chains going into the U.S., which is very important to be able to follow what happens to your ocean freight. That has been the focus for the supply chain visibility so far and getting into real-time data to adjust planning is the next step that we envision. We have the technology in place to start doing that. Honaman: Wiggert, you talked about this kit. Can you clarify what that is, how you have replicated it, and how you have made that so that it's repeatable? For example, when you go to a new facility, how is the kit installed and whatnot? Deelen: The kit is a piece of hardware — not yet a virtual server, which we are working on. You need to prepare the site before bringing the kit in. Individuals need to work on the firewall because security is extremely important. They need to make sure the PLC data is accessible. However, we've made it into an art. At the moment, we're quite quick. Of course, in Brownfield locations, there are a lot of different machine suppliers, OEMs, automation solutions, but it's quite agnostic. We can connect anything to start streaming the data. Johnston: You've addressed this a bit, but I was wondering if you could dig more deeply into it. There's a lot of new talent requirements for connected automation. Is Heineken recruiting for these skills? Are they upscaling? Is it a bit of both? Could you share some insight into how Heineken is handling this, especially given the state of the labor market today. Deelen: We will not be unique. There is this war on talent, it's very scarce and the type of skills needed are rare. A brewery is maybe not the most obvious place that people will come to work using those skills. We tend to organize real data science roles in a global way, making sure that the biggest challenges or most interesting puzzles to solve, can be done by the global team. Then, the job is extra attractive for this type of talent. We feel that they're most attracted by the more complex puzzle to solve, and the more interesting it is. Our employer brand helps for sure — working in beer is cool, at least. We have this attraction to the outside world. Getting people in is still possible, but then holding on to them — that is the key, making sure the jobs to be done are the ones that are most challenging and most interesting. The job profiles that we need are evolving over time. I have a fantastic story about somebody that worked with us for almost 40 years. He said to me, "This kit, this technology that you've provided us with is so important that I actually now have the reassurance that I can end my career in Heineken. Before the technology came, it was difficult for me to keep up, but now I'm able to play my part in a way that is much easier." Johnston: That's incredible. You mentioned that you hope to get 10 new breweries online this year. As you're getting the new brewers online, what kind of learnings are you taking to each one? Deelen: This has been a very interesting journey because logically you start with the coalition of the willing. You start with the breweries that are really poor and say, “Bring this thing to me. I want it. I'm going to have my people here and they want to learn from it and want to apply and develop use cases that you can share around the world.” However, over time, that group gets thinner. Eventually, you have to start gearing up your chain management and help the receiving site. You have to explain what it is that you have in your hands and how it can support daily operations and daily meetings. That is a process that we're learning, we are far from perfect in that, and are adjusting our program to this situation. I can't say we mastered it, but we make sure that we go from site to site and pick up what we learned, then add it to the program. It's a very dynamic situation. Honaman: Wiggert, you have used a partner to help you with commercializing this program? Can you share how you've partnered and what that looks like? Deelen: That has actually been amazing. We work with a Dutch partner and had this dream of technology. I had hired somebody to help me, someone of the digital generation to mentor and reverse mentor. He said, "I know this fantastic software company and they're really top of the range. They make tough things that are so clever, so let's work with them." We met them and they said, " you can work with us on a very low-risk basis. We give you a team for a month, show you what we deliver in a month, then if you like it, we go for the next month." That's how the relationship started — with a mutual trust in us as a client and in them and their capabilities as our partner. It’s been a very big part of the success. Johnston: We like to wrap-up with some best practices. Are there two or three lessons you could share with the CGT audience when it comes to connected automation, for those who are thinking about getting started or still have a lot of heavy lifting to do? Deelen: The first advice is don't get ready, get started. Don't bother too much about the big plan and the global business case and so on. You have to learn, but you have to learn by doing — we had our failures too. We went a few roads that turned out to be the wrong ones — you need to go through. Don't get ready, getting started is very important. The second is to make people focused. Technology can do anything, but it's about the people that have to use it. Have the user in mind all the time. I learned this from digital — it's only successful when it's solving pain points and you're continuously looking for those pain points to be solved. The third is that it's a new leg under your skill set. For me, it's also been quite a journey to learn what to do with it. For senior management, it's important that you start to understand it — I’ve even tried some coding myself. I failed at it, but it's important that you get into this world and make the effort because you can only apply it when you understand the principles very well. It starts small, but later on you can think big. Johnston: Those are great words to leave us with. It’s definitely important to spend time in the weeds when you can. Thank you, Wiggert and Justin, for sharing this with us. I'd like to thank our speakers for giving us their time today and their subject matter expertise. I'd like to thank AWS for sponsoring today's webinar and our audience for joining, enjoy the rest of your day.

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