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Summary

In this episode, Dr. Bryce Meredig and Joerg Hellwig discuss:

  • Joerg’s career path and the responsibilities of his current role as a chief digital officer.
  • How “digital transformation” has impacted the materials industry, and how to better integrate technology tools into R&D and manufacturing industries.
  • Which human factors play a role in technology integration in the materials and chemicals industries, and how to change mindsets across an organization in a data-driven approach.
  • How algorithms and machines can free up scientists to spend their time doing creative, critical work within an organization.
  • The critical role that data-driven materials and chemical industries can play in creating a more sustainable world.

“I’m very excited about using data-driven methods to embed recyclability and sustainability into the DNA of materials. We want to use AI to produce products which are both needed by the market and our customers, and fully recyclable.”

“Right now, how fast we can develop new products is unpredictable…we do 50, 100, 150 trials…This is painful, time consuming, and unpredictable…By incorporating data-driven methods, we define a different way of doing things that can change this unpredictability and allow us to gain speed.”

— Joerg Hellwig

Speaker Bio

Joerg Hellwig began his career as a commercial trainee at Bayer AG. After spending several years in the US, he returned to LANXESS in Germany to restructure and sell its Synthetic Fibers business. Following an assignment at Reliance Industries in India, he came back as Managing Director of the Pigment business unit at LANXESS. Since 2017 Joerg has led the company’s Digital Transformation Initiative as Chief Digital Officer. The process focus areas include the digitization of production, the introduction of new tools and systems throughout the value chain, promoting the value of data as an institutional asset for the entire company, and the use of advanced analytics such as artificial intelligence to increase the speed of development. Joerg also leads the “New Work” cultural transformation program to support the skill and talent necessary for the transition to a digital organization. As a champion of new technologies at the company, Joerg is also responsible for exploring new business models. As such, he founded the start-up software company CheMondis and served as Managing Director and Supervisory Board member. CheMondis, now independent, has quickly become the leading online marketplace for the chemicals industry.

Transcript

Bryce Meredig: Welcome to DataLab, the materials informatics podcast with Bryce Meredig, the Chief Science Officer at Citrine Informatics.

Bryce Meredig: Our guest today is Joerg Hellwig, Chief Digital Officer of Lanxess AG. Joerg began his career as a commercial trainee and buyer AG. After spending several years in the U.S. he returned to LANXESS in Germany to restructure and sell the synthetic fibers business. Following an assignment at Reliance Industries in India, he came back as managing director of LANXESS’ pigments business unit.

Bryce Meredig: Since 2017, he’s led and orchestrated the Digital Transformation Initiative at LANXESS as Chief Digital Officer. His focus areas are the digitalization of production, the introduction of new tools and systems throughout the value chain, and promoting the value of data to become an institutional asset for the entire group. Additionally, he’s responsible for exploring new business models. As such, he founded CheMondis, where he serves as a supervisory board member today. This startup company is currently growing a digital marketplace for the chemicals industry.

Bryce Meredig: Joerg also oversees skill and talent development for digital LANXESS and focuses on driving change culture transformation. Joerg, welcome to the podcast.

Joerg Hellwig: Hey, I’m excited to be here.

Bryce Meredig: You’re the first guest on DataLab who is on the business side of the materials industry, and I can imagine that perspective is going to be extremely interesting to our listeners. Could you start by introducing a bit about your background and the role of a Chief Digital Officer, and how you fit into the leadership team at LANXESS?

Joerg Hellwig: Sure. I’ve been in the chemical industry for 35 years now, so I am dealing with chemists, I’m dealing with chemical engineers every single day. For me, it’s an exciting thing to talk to people who are inventing stuff, who are developing stuff, or producing stuff. For me now, in my role as CDO of LANXESS, it’s time to combine its domain knowledge, what we have with digital technology. This is why we are excited to work with Citrine Informatics.

Bryce Meredig: Now, you’ve had a long career in the materials industry. I’d be interested to hear what some of the major challenges you’ve faced have been and how the nature of those challenges have changed over time?

Joerg Hellwig: Well, to be in the chemicals industry means a lot of history.  The chemicals industry, especially in Germany, it’s 150 years old. We are operating in plants which we build at that time for sure. The equipment is new, it’s brand new. But sometimes we still work on the same procedures as when chemistry was invented. So today, it’s time to review, to look back, and make sure that we appreciate what we have been doing. We’re very successful in what we’re doing and see whether there are other ways to combine that knowledge, that experience, the way we have been operating with something new. New is here in Silicon Valley, the digital world. It’s algorithms, it’s technology, and I believe we are just at the beginning to explore how materials could be manufactured differently, could be developed differently, and its very, very exciting to work in that field now, exactly now because, as I said, I believe we are at the beginning of something which is in my opinion changing industry.

Bryce Meredig: Now, a lot of people I think have heard about the term digital transformation. What, in your view, does that mean, and how does it apply to the materials industry? Perhaps, how might it apply differently in materials as compared to other industries?

Joerg Hellwig: Well, let me take you a little bit on my journey with digital transformation. I was running a business for LANXESS, a large business, Pigments, which can be used for various applications, paints and coatings, construction, plastics, paper, and some technical applications. Over this period of time, my team and myself were changing procedures. So we were looking at certain ways and means of doing business, starting with developing products to manufacturing them, looking at the supply chain, and we became aware that we have to become more customer-centered, because the chemical industry is by definition very asset driven. We have huge assets and have perhaps looked not enough on what the customer needs tomorrow and whether there will be any changes.

Joerg Hellwig: So, when the CEO of our company, Matthias Zachert, asked me to lead this digital transformation, I was excited from day one onwards because I saw the chances and opportunities, and some people only see the threats. So this is something that we learned very fast, yes there’s a threat if you don’t do this, then something can happen, but the chances are much higher. What I’ve been doing, over the last one and a half, two years in my new role, is looking at technology, scanning the markets, talking to people worldwide, then bringing partners in with technology, and running use cases. We test whether this new technology can be applied to our company and to any field, to production, to administration, to any marketing and sales activity.

Joerg Hellwig: So we are on a long journey. We had setbacks, which is also something we had to learn that, in the digital world, you have to test something without knowing and you have to invest money without knowing whether the money is really coming back. We are successful in doing that. As I said at the beginning of this podcast, I think we are just at the beginning and we will continue, and one of the things we’re now approaching is the development of materials. For that, we chose Citrine Informatics and we’re very, very excited about that.

Bryce Meredig: You mentioned something interesting about the materials industry that makes it relatively unique, which is how asset intensive it is. Could you go into a little more detail on what exactly that means and how digital technologies fit in if this that’s the nature of the industry?

Joerg Hellwig: In 2017, the numbers at LANXESS were like 10 billion sales, roughly 20 thousand people. We have assets where the replacement value is way over 20 billion dollars. So we talk about very large units in even larger chemical plants, and you have to utilize these plants. Most of this equipment is running 24/7, which requires to have processes in place which are safe. In chemical industries, the first, second, and third goal is to work safely. Chemistry usually never means you put one raw material into a reactor, push the button, let it cook, and then something comes out. Something’s happening all the time, so you have a product which comes out and you have a second product coming out, which you also have to then process.

Joerg Hellwig: Up to now, we have been very good at doing this over many decades. What we were struggling with is, if there is an issue, something where the problem happens to be all the time, like an error in the system,  not so good quality and so on, we’re always trying the same and it’s very painful. Now, we see, for example with industrial IOT with big data analytics, with algorithms, to combine this knowledge with the knowledge of the last years. We have so much data in our system that we are now understanding that we have to do more with that data than just steering production and doing a little bit of quality control. Using the data, seeing trends, simulating stuff, there’s a whole world opening up for us right now, and that is exciting to us. It’s exciting to our chemists, our engineers, our entire company, and I believe it’s exciting also to the digital world because, when I started talking to what I call the digital world, people asked me to explain the digital industry. I just explained what I said in the last two or three minutes. I saw shiny eyes because, when you guys get data, massive data, you’re happy to work with the data, and now we have two excited groups coming together. In my opinion, it’s one plus one. It’s not two. It’s five or it’s ten.

Bryce Meredig: I think you’re absolutely right that the challenges of chemistry and the chemical industry are extremely interesting to people who have these math and algorithm, and computer science backgrounds. Certainly, for those of us who sit at the intersection of machine learning and AI, and materials science and chemistry, you mentioned a few times this idea of taking the domain knowledge we already have, this long history of expertise at a place like LANXESS, and combining it with these digital technologies. I think that’s so important because, often people try to, I think, create a distinction between doing things the old way or using knowledge that we had before and using these digital capabilities. What, in your view, does the intersection or successful intersection of these two perspectives look like?

Joerg Hellwig: To bring in technology, to bring in the software company, does not mean anything if you cannot convince the people inside the company to work with this. I have also not found, and I believe I will not find, a software company where I just give them the data and they go home, and a week later they come up with a solution. So it’s this combination of identifying a pain point, a hypothesis, collect data, and then let’s work together.

Joerg Hellwig: As always, because we’re all humans, there are little blockades of resistance because, if I come in with a new company, people act a little scared about what’s happening. So there’s communication needed in terms of, look, you have been doing a great job here in this plant. You told us there’s an issue, let us help you, let us work together. It’s fascinating to see when this blockade goes away, when the roadblock is moved, how fast our chemists and engineers pick up what’s coming and how fascinated the software people are when they see a plant, because usually, we take our partners first into the plants. We say, “Look, this kiln is 100 meters long, or this is a five hundred cubic meter reactor.”

Joerg Hellwig: So I want them to feel, to see, to breathe, to smell what they’re working on. More fascinating to see is then, after working together for a couple of days, couple of weeks, when the first results are being applied, because usually, the first shot is not a success, but we see a trend. Then both ends feel they are working on something, which is great. We never have failed. We’re either successful or we learned, and then we move on. This is something where I see momentum right now in our company, perhaps not in the industry, but exactly in our company. That makes me very proud to be part of that and to be even more excited to move on, and the next weeks, months and years will be extremely exciting.

Bryce Meredig: It sounds like you’ve been successful in helping, for example, chemists and chemical engineers see the benefits that they can reap from working with, for example, people with software and data science background. I know many organizations face challenges in getting these communities to work together successfully. It’s been a theme on this podcast before, these sort of cultural issues, these cultural barriers. Are there specific things that your team has done, that Lanxess has done, that has helped these two groups come together and work together effectively as teams?

Joerg Hellwig: Yes. The biggest factor is just bringing people together. Let them not send emails or exchange paper. Put them together in one room and let’s talk about what we would like to achieve. What’s the goal here and what’s the meaning of what we’re doing. Because, if there’s a face to a name, if there’s a face to a voice, if there’s a face to a title, then it’s much easier to talk to each other. That usually brings down the barriers because you are talking to a human being, even if this human being is a software engineer. You’re talking to a human being, even if the person’s a chemist.

Joerg Hellwig: So two humans are starting to talk to each other, and then we try to use machines to help us, to help us humans to get better. There’s stuff that machines can do much, much better than we do, and that’s what we started to learn, but there is also stuff where I need the creativity of my chemists and engineers to work on. We talk about efficiency. I mentioned before that we have data. We’re highly automated. We have process control rooms so, when you walk through our plants, you hardly see people because everything’s automated.

Joerg Hellwig: What we do is we collect a lot of data, we process the data, but we never use the data in terms of looking at the last years. How did this plant behave? Whenever something happens, equipment breaks and we fix it, and we start again, we don’t look back. Was this the best decision? What we’re now looking at is we’re taking this data. In one plant, for example, we loaded up 50 thousand excel sheets, and we’re seeing a trend over the last five years. When I showed this to my engineers, they almost started crying because they said, this is so cool because it was never a chance for them to see that.

Joerg Hellwig: You can watch every minute, you can watch every shift, you can watch every month, but you cannot look at that much data in such a structured way. Then the knowledge kicks in that they have. Then we test something. Then we run more things. Many times, we go back to the basement and bring up the binders, because there’s more data. So then we feed this data into the system, so you’re creating a database, you’re creating a history. With this history, you are much better able to predict the future, and you get a recommendation what to do if the next thing happens, which might have happened three years ago, but we don’t know anymore what we did at this time and whether this was the best decision. So we’re learning from every decision, we capture this knowledge, and then we move on. This is, in my opinion, the future of the chemicals industry, and the future of materials.

Bryce Meredig: You mentioned something which is very important that, in the process of innovation, taking new products to market, manufacturing them at scale, there are essential tasks that are, I think, fundamentally best suited for computation, for algorithms, sifting through massive amounts of data, and maybe identifying the important places for people to look. Then there are aspects of the process where human capability and intelligence is essential. You said you need the creativity of my chemists. So this idea that we can bring together the best of what human intelligence is good at, the best of what machine intelligence is good at, I think is clearly going to play a critical role in the future of the chemicals industry. It sounds like Lanxess is already seeing some success in doing this.

Joerg Hellwig: Definitely. Let’s assume a chemist is 10 hours a day and a normal week in the job, or in a lab in the production plant it’s on. Right now, he might need 50% of his time to collect data, to structure data, to run his daily excel sheet. So this time, this 50% of the working day, he can now use to be even more creative. He can look at data which is already structured, he can look at proposed recommendations from a software, and then he can apply his creativity double than he has been doing this before. Plus, I believe he has much more data, much better data to do that.

Joerg Hellwig: So I believe we are opening up a new field where people can concentrate on what they do best by letting machines do what they can do best. So this combination of machines and humans, this excites us. As I said, as you just mentioned, we are successful doing that. We have only had a couple of use cases. If I look at our business, at our 60 plants, sites worldwide, 10 business units, tens of thousands of articles, there’s a lot of stuff to do in the future. We need help, we need support, we need digital technology to get better every single day.

Bryce Meredig: You mentioned yesterday, when we were chatting, that you’re excited about the potential for technologies like machine learning and AI to remove the constraints that we impose on people, the barriers to their creativity or to maybe fully expressing their abilities. What did you mean by that and how would that apply to the chemical industry specifically?

Joerg Hellwig: One aspect is, as I said, we are very structured in what we’re doing. We’re structured in business units. We’re structured in plants. So we usually have dedicated people doing what they do, perhaps for 10 years in a row because they need the experience, they need to get trained. We usually say that the chemist needs two years and the engineer needs three to four years to really perform in a very large unit because it’s so complex.

Joerg Hellwig: So we believe that this period of getting trained could be massively decreased because we could put all the experience, all the knowledge first into a database. That person who comes new in their job could look at that and could apply his creativity, new ideas. So usually there’s no time, not too much time to do that. Second thing is, all over the world we have an aging problem. We have many people who are going to retire at whatever age. In Germany, we have defined retirement ages. That means that we fully understand, by statistics, who is going to retire in the next two, four, six years.

Bryce Meredig: I think a lot of people aren’t aware of how great of a challenge that is in the chemicals and materials industry in particular. It’s a massive demographic change.

Joerg Hellwig: Definitely. Definitely. There will be a very high percentage of our chemists and engineers going to retire in the next years to come. We have struggled to work against this demographic problem. Now, with this new technology coming in, with databases, algorithms, and so on, I believe we have, for the first time, a tool which really works. What does it mean? We’re right now very keen to bring all the knowledge we have into a system. The system which is then easy to access and which is then also handled by the new chemists, the new engineers coming in. You don’t have to be a software expert to run the system. This is the beauty of what we have seen, that as the acceptance of such a system gets higher, the easier it is to handle.

Joerg Hellwig: You don’t have to study informatics for four years. You don’t have to be a PhD in mathematics. So you apply your chemicals, your engineering, and your business knowledge, and the software, the machine helps you to get better, to get faster, and you have way more time to be creative.

Bryce Meredig: You mentioned that we’re, as an industry, just at the beginning of a transformation. As you look ahead over the next five or ten years, what are some of the aspects of this change that you’re most excited about?

Joerg Hellwig: I cannot name one because I’m excited about everything. I’m so excited about the stuff I don’t even know what’s coming. It’s so broad what’s happening. Right now, we are talking about using AI, using algorithms, using data to get better in the plants. What does it mean? Development of products, development of materials. Right now, we have this trial and error approach. We have an idea. We do 50, 100, 150 trials. Then, at a certain time, we are successful. But it’s very painful, it’s very time consuming, it’s unpredictable how fast you can develop such a new product.

Joerg Hellwig: Now, we believe, especially working with Citrine, we learned that there is a different way of doing it. This different way of doing that will, in my opinion, also change other procedures we are doing. So you could also apply the same idea to production. So you could optimize entire value chains. You can collaborate much better with customers because usually we restrict ourselves by putting boundaries around us. I need this new product, and we try to develop it. We send it back. It’s not 100% what a customer needs, so there are compromises.

Joerg Hellwig: I think we can apply speed. I’m very excited about things like putting recyclability into the DNA of materials, which we all want to have. We’re all in business, we all want to make money, but an equal goal is to protect the environment. There, we’ve done a very good job, but it seems to be not enough. That is what we also would like to conquer, to use AI to produce products which are needed by customers, by the markets, but at the same time make sure they are fully recyclable.

Bryce Meredig: Yeah, I think that’s an area where clearly the European Union, in particular, is leading in terms of this circular materials economy and sustainability. It certainly is one of the areas where the chemicals industry can play a role in helping to make the entire world more sustainable, and this idea of designing for sustainability, applying that as a constraint or a requirement earlier in the development process I think would change how we think about chemicals and materials in the future, because the reality is even today, or certainly decades ago, we weren’t thinking about the end of life when we designed a new material.

Joerg Hellwig: Yes, and don’t get me wrong. We have done a good job in doing that. But, in my opinion, up till now, we have been limited. We never do make any compromise, but it limits us because we always look at the chemistry and the engineering skills around it. Now, AI could open up a new field where we look at the parameters much better, and we can build in the parameters while we’re developing the materials. We’re very focused towards something, this is property of product, but a very important property path equal to the usual properties is recyclability.

Joerg Hellwig: To achieve this goal of what European Union calls circle economy, that products need to be recycled and put it back into the process to use the resources not only once, to not have to landfill it and so on. So we are very excited about this, and I have a lot of people in our company who are equally excited as I am. We’re starting right now with this, and I believe we will see some very promising results very soon.

Bryce Meredig: At the risk of asking you to give advice to competitors, I’d be interested to hear your perspective on what the key aspects are that are going to separate successful materials and chemicals companies from those that are not as successful as we look into the future.

Joerg Hellwig: I think it’s an easy answer. Be open to what’s going on right now. Sometimes we say what happens to B2C world will never happen to the B2B world, which is not correct. What we have been doing successfully is opening up, and walking away from this “not invented here” syndrome and “we are smart, we know everything” attitude. We know a lot of things, but we learn now every single day, and that’s the key factor, that you learn every single day, you are open, you are also courageous enough to test stuff without leaving behind any kind of your principles. So we would never do anything digitally if it makes us unsafe in a chemicals plant. So that’s a prerequisite for all the partners we’re working with. Safety is the number one goal we have and the number one principle.

Joerg Hellwig: At the same time, there are very professional companies out there, which completely understand that so you don’t have to talk about this for a long time. Then you can move on and check out what kind of technology is this. Are these people capable of explaining what they do? That’s, I believe, what we have done very well, to listen first, to scan, to be open, and then also to have the courage, and also the guts, also the financial capability to apply it. The best way is to go via use cases. Don’t go with this big bang idea, on a Monday morning you change everything and everything will be great. Test it, find pilots, and then run it. If it’s working, scale it up to all of the other sites. If it doesn’t work, then move on to the next thing. We also have the capability to stop projects, something which is pretty cool. After four weeks to say, great partner, great technology, but it just doesn’t work here, so let’s move onto the next one.

Bryce Meredig: Right, yeah. This idea of failing fast of course, and learning and moving on, is an important part of Silicon Valley lure. Actually, on that note, I’d like to wrap up by asking you perhaps an unconventional question. We’re used to having, for example, large established companies come visit Silicon Valley or establish outposts here with the desire of learning about how the Valley works, and maybe bringing some of these practices back to their headquarters. But I’d like to turn that around and ask you, from your standpoint as somebody who’s very familiar with the chemicals industry and with Silicon Valley, what does the chemicals industry have to teach Silicon Valley? What can we learn here from the chemical industry?

Joerg Hellwig: What you just mentioned. I smile always about these bus tours, and then you stop in front of Google headquarters and Facebook headquarters, and so on, and you go to the gift shop. You go back home and say “I was at the Silicon Valley. It’s so cool.” We did this in a very simple way a couple of years ago, but we’re far away from this now because we believe you don’t catch the spirit by just riding with the bus through the Valley. You have to talk to people. You have to find partners and you move on.

Joerg Hellwig: Advice to you, it’s not advice because I just complimented you for what you’ve been doing. You also come to us, you approach us and offer what you can do, especially what Citrine Informatics can do. Then this ability to listen first and explain what you can do in easy words. Not everybody is a software engineer understands what AI means. That is something where I believe we easily met in the middle very fast, and then we moved on and talked facts, and we’re very focused on getting our projects lined up, which we’ll now get started with.

Joerg Hellwig: So don’t stay here and wait until the companies come. Come to us, come to our world, come to the large plants in Europe or wherever they are, and meet the people. Then let’s just start working together. I’m so excited to feel now that this is the right time to do that, and we are prepared, and we are starting as we speak.

Bryce Meredig: At the end of the day, it’s a human to human endeavor, and it’s a handshake. I think that there’s a tremendous opportunity, of course, at the intersection of domain knowledge and the deep kind of expertise that exists in the chemicals industry, and some of the capabilities that we can provide on the digital side in terms of AI and machine learning. So we’re certainly excited to be working on these projects. Joerg, thank you so much for being a guest on DataLab.

Joerg Hellwig: Thank you so much.

Bryce Meredig: Thanks for listening to DataLab. If you have questions or an idea for an episode, contact our team at podcast@datalabmi.com.