A golden opportunity: Umicore PMR's drive for operational excellence

Mar 15, 2023
  • operations
  • virtual reality

Umicore Precious Metals Refining (PMR) in Hoboken is the oldest, largest, and most profitable of Umicore’s business units. In the current macroeconomic context, however, that could change quickly. To build a resilient organization that is ready for the inevitable challenges ahead, digital transformation manager Martijn Samaey and R&I program manager Elien Haccuria have partnered up with delaware’s Supply Chain Transformation team.

Catalysts for change

In 2021-22, Umicore PMR posted a record revenues and earnings, partly due to the high market prices of Platinum Group Metals (PGM). As a result, the company has remained largely unaffected by the economic crisis. 

In the coming years, however, several major challenges are expected:

  • Vehicle electrification will drive down the price of PGMs used in the catalytic convertors of internal combustion engines. 
  • Rising energy prices, labor costs, and inflation will eventually catch up and have a major impact on the company’s global competitiveness. 
  • Due to the increasing labor shortage, job openings for physically demanding and repetitive tasks will become harder to fill.

“Part of our job at Umicore has always been to find ways to improve workplace safety and reduce our environmental footprint through innovation, automation and digitalization,” says Elien. “Because of the challenges ahead, OpEx optimization and reduction has been added as another focus area. The best time to tackle this is now, while things are still going well.” 

Partnering up with delaware

Initially, Elien and Martijn started talking to colleagues from other departments themselves to create a list of improvement ideas. Making those ideas actionable, however, proved to be more challenging. “Access to resources and to usable data was limited,” says Martijn. “Moreover, we wanted to move fast and make sure we had everyone on the same page. We quickly realized that bringing in outside expertise would greatly improve our chances of success.”

From the start, the team had a pretty clear idea of the kind of partner they wanted. Elien: “Obviously, they had to have all the necessary experience with and expertise in production automation and a hands-on mentality. But what was really key for us was that our partner could handle the project end-to-end, from strategizing and planning to implementing and managing. What we didn’t want, were PowerPoint consultants.”

What was key for us was that our partner could handle the project end-to-end, from strategizing and planning to implementing and managing.
Elien Haccuria, R&I program manager at Umicore PMR

After a careful selection procedure, delaware’s proposal was finally withheld based on a number of key points, including: 

  • a clear roadmap, including a detailed study of OpEx opportunities;
  • the ability to tackle projects end-to-end;  
  • strong upfront knowledge of Umicore PMR’s company culture;
  • a solid change management methodology to ensure company-wide adoption.

That last point is key for Elien and Martijn: “This project will impact many people, and a lot of them will have to change how they’ve been working for years. That’s why you need to get them involved as early as possible. By talking this through, explaining the value, and solving potential problems together, you’re laying the foundations for meaningful and lasting change, and securing the value of the project.”

Four steps towards excellence

After several exploratory talks had taken place and the inevitable paperwork was completed, the project formally kicked off in October 2022. 

Phase 1: Scanning

The first step was to expand on Martijn and Elien’s efforts and detect opportunities for optimization throughout Umicore PMR. The original plan was to include every department, but to save time and resources, the scope was limited to 8 departments with the highest potential OpEx reduction, i.e. Operations, Maintenance, Sampling, etc.  

Michael Bulthé, leading the Supply Chain Transformation team at delaware, explains the team’s approach. “We perform a holistic scan of how the business is organized. This includes people, processes, and technologies, for example: how are shifts organized, where’s the waste in a specific process, are IT and OT technologies deployed in the right way, etc. The end-goal is finding ways to become as cost efficiently as possible without having to compromise something else. There are infinite ways to optimize OpEx, but the right ways for your situation are limited. Figuring out what works is the challenging part.” 

Phase 2: Refining and prioritizing

Based on a formal briefing by the project team, designated representatives per department prepared a preliminary list of ideas. The delaware team then further enriched these ideas by talking to the workers involved, including operational managers and operators. 

To get accurate and actionable answers, delaware could rely on its deep expertise in information technology, and leverage a broad network of expert partners, like ABB. As a leader in robotics, ABB could provide up-to-date and accurate information on the application of specific industrial automation opportunities, and whether they would be a good fit for Umicore PMR. These combined strengths provide detailed insights on the feasibility and cost of certain OpEx opportunities. 

Phase 3: Roadmap

Over the course of the project’s first two phases, delaware was firmly in the driver’s seat. Elien: “Our task was to provide them with as much valuable information as possible to do their job.” To develop a clear roadmap, however, close collaboration between the delaware team and the various stakeholders at Umicore was needed. 

Michael: “We set up several recurring meetings to reach and maintain consensus and keep the project on track. These include:

  • a weekly status call based on the activities log
  • a monthly meeting with the teams and other key stakeholders, e.g., colleagues from Operations
  • a steerco meeting every few months with the key project sponsors”

For Martijn, an engineer at heart, the prospect of that many meetings seemed daunting at first. “I was worried that there would be a lot of talk and no action. But the truth is that they open up a designated space and time for discussions, meaning there’s a lot less ad hoc back and forth going on. Furthermore, they help to set clear deliverables and ensure that ownership is properly divided.”

In 2023, six projects will be tackled. “The common thread in many of these ideas is to increase the transparency and predictability of our processes, which allows us to deploy people more efficiently,” says Martijn. “2023 is a transitional year, where departments can adapt and free up the necessary resources. That’s why a lot depends on the success of this first wave. By demonstrating their value, we’ll be able to draw more resources and tackle more projects.”

Two examples of optimization projects

Automating the filling of bags of silver

Today, two people are needed to accurately fill bags of silver of 25 kg. This needs to be exactly right, and it’s a very demanding job. ABB has indicated that the technology exists to let this happen automatically. Of course, human supervision will always be needed. This means one person will be able to take up other, more valuable tasks. 

VR training

Part of our ‘digital lab projects’ include smaller pilot project outside of Umicore PMR’s comfort zone, where we try out technologies. In this case, we’re creating a VR training for a specific procedure in one of our furnaces. VR allows workers to try out the process in a safe way first, to learn the different steps without needing to come anywhere near the molten copper. 

Phase 4: Making it happen

At the time of writing, the project team is fully engaged in allocating resources and organizing kick-off meetings for all six projects. By summer 2023, all planned projects need to have been started. 

Ownership: the secret ingredient

How do Elien and Martijn feel about the way the project has been going and the collaboration with delaware so far? “Digital transformation and optimization projects only work when everyone in the organization takes ownership,” says Martijn. “The delaware team has brought structure and clarity and kept everyone focused on the tasks at hand. This has given this project the leverage it needs to turn into something much bigger, and much more impactful. Witnessing how something you’ve been working on for years is finally gaining traction is very powerful, and we can’t wait to see how it turns out for Umicore PMR.”

Don’t miss out on your opportunity to become a resilient, future-proof organization. Talk to our Supply Chain & Operations experts to uncover your opportunities for cost optimization.

related content