Digitalisation enables data-driven decision-making and processes that make operations faster, smarter and greener. In today’s world, data is a valuable raw material that can be leveraged not only economically, but also responsibly to create eco-friendly products, services and solutions.
Data-driven sustainability is here and now. For years, both traditional and digital companies have collected, refined and used data to improve business models and practices. But nowadays, more and more organizations are aligning data-driven solutions with sustainable development goals and company-specific initiatives to reduce waste, lower emissions and optimize supply chains. Data aggregation has unlocked the opportunity to measure impact while increasing product quality and usability.
Solving production capacity-related challenges
Kiilto recently launched a project with industrial digitalisation expert Insta to develop the data-based management of its product portfolio. These two family-owned companies have already co-operated in various sectors for about 30 years.
“Kiilto is known in its industry for its customer-driven approach. Operational agility and design adaptability have always set the company apart from the competition. Over the years, however, the portfolio of products modified according to customer needs has become almost too large, which has then posed challenges to the production capacity,” says Juha Latvala, Chief Digital Officer at Insta, about the starting points of the co-operation.
Path towards sustainable growth
Kiilto has made the environment an integral part of its corporate culture and Insta seeks to reduce the carbon footprint of its customers. Two is better than one in harnessing the power of chemistry and data for business and environmental purposes.
“Environmental impact assessment is part of all decision-making, also in this project. On the other hand, it is self-evident that production and portfolio optimisation also seek to improve profitability. What should be noted is that a project of this kind has an overall impact on sustainable growth, which is an important part of sustainability,” says Anssi Asikainen, CEO at Kiilto Group.
Asikainen points out that development projects are a massive undertaking for any organisation. In this case, modernizing Kiilto’s data-based management system will require bridging the old with the new and involve widespread reassessing and reconfiguring.
“Data-based product management is clearing the way for us to create more sustainable solutions for our customers. Letting go of something is actually the best way to keep what we are known for – our customer-driven approach,” says Asikainen.
Decision-making is easier with data
The first step in the project was to establish a framework for objectively assessing the profitability of products. Utilizing a data-based model to accurately weigh the profitability of products ensures that every decision maker is on the same page. By gathering and combining relevant data related to manufacturing, cost, sales and other criteria, such as environmental aspects and brand elements, a holistic picture of the product portfolio can be created to establish a single view of entire supply chain’s profitability. This allows an organization to operate more on insights and less on intuition or opinion.
“We needed to review the existing product portfolio and take necessary action. The data-based calculation model was helpful in determining the value of the products, and the view it gave was sufficiently comprehensive. It does not make sense to start streamlining production before you have gone through this process,” explains Latvala.
Culture of experimentation and new innovations is based on knowledge
Asikainen also mentions an important connection between data-based management and Kiilto’s corporate culture:
“Understanding increases the potential for innovation.”
“Kiilto has a strong culture of innovation and experimentation, but that does not mean that we toss ideas around randomly. We build new based on what we already know. Having access to the widest range of information available will serve as a solid foundation for pursuing new opportunities. On the other hand, doing the right things effectively on many fronts based on data will also leave more room for some of our wilder ideas,” continues Asikainen.
In addition to a shared understanding and a common framework, another key objective was to change the way of working in and around the product portfolio. According to Asikainen, an external consultant helped create a common set of rules for decision-making.
“Someone from outside the company was able to ask questions that the organisation was not aware of asking,” he admits.
Data-based management sets goals and enables renewal
Latvala confirms how easy it is to see the unbroken chain of data-based management all the way from the start of the project to a finished bathroom, for example. Information is needed on all levels to support decision-making.
“There is no value in digitalisation in itself; it is a tool for making better products or decisions, which we can achieve by creating new understanding through data,” says Latvala.
Latvala points out that the foundation of data and knowledge-based management must be supported by a company’s strategic goal and pursuit of change. If digitalisation is also needed, this should be taken into account in the organisation’s strategy and tactics.
The key factor is capacity for renewal.
“When making decisions that shape the future, it is vital to identify the right ones. Only a stable company capable of renewal can influence how the industry develops and contribute to building a sustainable future,” concludes Asikainen.
Laura Heinovaara, Communications Manager
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