digitalization. Great. Welcome everybody from the break, and welcome you, Peter. And thank you for joining us. Thanks, great to be here. Fantastic. So, we're going to be doing a format here, it's a Q&A. We're going to use a couple of times together, a couple of minutes together. And I will just start with the first question, which is a bit more high level. So, why is digitalization important to Dow? And what is the impact, specifically within supply chain? Thanks. Yeah, perhaps the best way to answer that is to tell you that back in 2017, our CEO, Jim Fittling, challenged us to become more Amazon-like, which is perhaps a strange thing for a 120-year-old manufacturing organization. But what he was really getting at was the fact that, as consumers, we've become very comfortable going online, ordering things. And if we want, we can even trace that package on its way to us and even divert it at the last minute to a different destination. And his challenge to us was, why can't you do that in our supply chain operations at Dow? Why don't we know exactly where products are? Why is it so difficult for our customers to do business? So, quite clearly, a big challenge to have everything in place to actually make that happen behind the scenes. Fantastic. And is that really about technology or is there other things involved into that? Oh, it's really a lot of things. It really comes down to having end-to-end processes that work. I mean, if you basically use technology without getting that part right, you're basically speeding up the garbage in, garbage out process, which you don't want, obviously. Yeah. And it's also clearly about the people and helping them along the way. Okay. Fantastic. Now, we established, of course, is an important topic, right? And you've been in that journey for a while now. But, you know, I think there are a lot of people out there that are thinking, where do I start or how do I prioritize the things that I started with all these pilots going around, all this technology? So, my question is, how do you decide which digitalization initiative is the right one for you? And how does the decision process look like for that? Maybe two questions. It's a great question. Because, obviously, there's a myriad of technologies out there. And, of course, all that glitters is not gold. And it's not really about the technology. You really have to be thinking about, well, what does the technology actually achieve for you? And that's really the key point here is that you have to have some sort of framework to help you prioritize. And the key starting point there is making sure that you're really connecting to the business priorities, the overall objectives. And that should be the starting point to help you decide what technology is appropriate. And really thinking the whole time, what is the technology going to achieve for you? And how does the decision process look like for that? Because, I mean, one thing is, you know, if you have a clear cost-cutting agenda, or if you have a clear, you know, and we need to be more flexible and so on, how does that play out? When did technology come into the picture on that discussion? Am I not sure if I'm being clear? I think so. I think the key point is having an overarching framework around this, making sure that both from senior leadership perspective, there's clear objectives that are set. But somehow making sure that you're still engaging with people right through the organization, because it is such a fast-moving world. And actually, you know, just listening to young people that have joined your organization and their expectations and their experience, you know, typically, they're the best people to tell me how to use my iPhone. They're also the best people to actually tell me about some of the things that are out there in the digital world. And just building a bit on that, because it's not necessarily that we find, you know, a lot of digital natives within Down or within Mask or within any other company that we mentioned out there. So did you work with any partners or did you have any kind of partnership or ecosystem of companies that you worked together with? Or was that something that was relevant for you? Yeah, sure. That's pretty key. Actually, change for a company like Dow that over, I guess, over history has maybe a tendency to do things on its own, be a little bit secretive about stuff and nervy about collaboration. But it's become quite clear that in this modern world, and particularly in the digital world, collaboration is actually key. And you really need to work with different partners and find different ways to do proof of concepts. And to try things out that probably 10 years ago would have been a real challenge for us from a kind of cultural perspective. And is that done centrally? Or is this mostly the central and the different? Because, I mean, we just saw 109 manufacturing sites and present all over the globe. How do you actually coordinate all this big machine? It's a good question. I wonder sometimes myself. I guess the key thing is that to put the right structures in place, like I mentioned, you know, we have an executive, steering team around a digitalization program. Only for that, then? Only for that. Something we call North Star. And it's actually led by our CIO and our supply chain VP. But that kind of stretches out into the regions, into the functions. So within each function, you have people leading digitalization. And within the different regions, you know, getting into the geographies, then there are people engaged in various programs. And that's really important. You know, it's not just high level. It's actually taking into account the fact that, you know, things in Europe are different from the US and so on. So in practical terms, that means that you might choose a certain technology that might be rolled out in a site somewhere in the US or in France or in Italy. Right. And that might be something completely different in another site because you thought that was what the technology could bring? Or how does that work? Typically, typically, our starting point is to try and use the same technology globally. Yeah. That makes sense. But the reality, particularly if you talk about the logistics world, things are different on the different continents and you have to adapt to that. So there are some things that can be implemented globally. And obviously, that's a great outcome. But if not, then you have to be prepared to be a little bit flexible. Now shifting a bit from that to think a little bit more on the people side of your organization, because I think it's no secret that technology might threaten a couple of people. They might think that, you know, I'm not going to have a job or something and otherwise. But there is also a really good side of it as well. How did people feel about that and the implementations that you have until now? What was your experience? Right. Yeah. And for sure, people do feel threatened by any change and particularly with digitalization. I mean, you just need to mention artificial intelligence and people immediately go to science fiction and think the robots are coming and, you know, they'll take my job. But, you know, seriously, really the key thing is to, well, first of all, to connect to what I was talking about in terms of the customer experience. That also translates to a lot of frustration today in terms of our organization. You know, imagine being a customer service rep, asked the basic question by a customer, like, when is my product going to arrive? And not being able to answer that real time, having to go away and make numerous phone calls. So actually tapping into that frustration, helping people understand that actually this is a good thing. We're going to take away a lot of the hassle out of daily life for them. That's a great thing. I guess the other part to this is just making sure that people are involved as you implement new technology. And then actually just a bit on that, on the evolving capabilities and so on. Do you have centers of excellence for certain types of technologies or do you do that, you know, outside in, hiring? How do you treat that? When do you decide, in other questions, of what should be, you know, in-house and what should be outside? Something that you should buy. Yeah. Well, actually a couple of years back, we did set up three centers of excellence for digital activities, digital marketing, digital operations and a digital order fulfillment center. And say in the fulfillment center, they're working, they're partnering with universities. They're working with different suppliers and trying out, doing proof of concept type activities, testing out technology and then trying to figure out, out, you know, out of that huge choice that's out there, what makes sense and what should we try and roll out broadly across the company. For the out-ear governance that you just mentioned before. Yes. Yes. Okay. That sounds fantastic. Now, when we all talk about now that, you know, it's great digitalization and it's not that easy to actually make it happen. So what's some of the main challenges you faced or any mistakes you made along the way? Mm-hmm. Yeah. So, well, there are numerous challenges. I mean, I could talk about the basic work processes and boring stuff like master data. You know, if you don't have those things under control. I don't think those are boring at all. Just between us and you. We're probably the only ones. Yeah. Yeah. Exactly. But really, one of the key challenges for a company like Dow, you know, in the intro, you saw how many manufacturing sites we have and we're very global, is really looking at the number of partnerships. And I think that there's a slide coming up that it's kind of misleading, actually. I think in the title of the slide, it says complex supply chains. Yeah. I look at that and I think that's the most simple supply chain ever. I mean, if you only had five raw material suppliers and six channels to market, that life would be easy. You know, we have 100 plus transport partners in Europe alone. And so really, when you talk about connecting things up, having real-time information, you just can't go down the path of doing one-to-one connections or going to your suppliers' portals. You have to find some platforms, some ways to connect in a smarter sense so you get the information you need real-time. And maybe that's a good opening because I'm quite curious to know what are the actual solutions out there, right? And I think many people at home also are thinking about that. So when we talk about digitalization, AI or, you know, A4.0, what are some good examples that you might mention to us here today around how you integrate your supply chain and operational setup? Right. Or the actual stuff. Okay. Yeah. Yeah. We could talk for hours. There's so many great- We have plenty of hours. The people at home don't need to go to the toilet and all that. So- One example, which ties into what I was saying about knowing where product is. You know, GPS devices are pretty commonplace these days. You think about Internet of Things. So one example I'd like to talk about is what we term smart containers, which are used to transport chemicals around. And obviously these days. These days, they can also monitor other things such as temperature and pressure, which is important for us. Some of our products will freeze if they get too cold or react if they get too hot. And so having real-time information on that type of material as it's transiting, say, across Europe is really critical. But having the technology, having the device, and that's connected to the device, to the transport company is one thing. The other is, well, how do you get that real-time in front of the customer service or the customer directly online? And that's where you need some sort of platform. And that's the smarter piece of this, that it's not just about the device on the trucks. It's how that connects in through. And going back to the previous topic about how many connections that we have to make. Yeah. The key challenge for us was finding a platform partner that could connect up our different transport companies with ourselves so we could connect into our system to give that real-time visibility. And that's what we're aiming to do across each of the motor transports. And that's the IoT platform. Yes, exactly. Okay. But, you know, I can't avoid keep thinking that we have an overload of information already today. Everywhere. It's on your phone. It's on your iPad. It's just here in the studio. You can see how many devices we have. How do you make sure that the people that now get that information, that they use also that information to take different decisions or to be faster to react or to give a better customer service? Because one thing is that now I can see which containers are coming right on time or a bit delayed. How do I make sure that I add some value to that, either through a different service or that the people understand that they can use that for something else? What I mean is more on the analytics also part, using that information. Right. Yes. Any thoughts? So that, well, one key thing is that as you roll out technology is getting people involved that are actually on the front line that understand today's work processes and how things work, how things don't work, and getting them involved to fine-tune the product, the technology that you've bought, so you're implementing, and make sure that it's really working and fine-tune that. So that you're not just talking about the process. So that you're not just talking about the technology, you're talking about the process. And along the way, you're perhaps doing some proof-of-concept stuff with your customers. Like, do they want to get a message every five minutes on their phone about where their product is? Probably not. How would they like to receive information from us? Okay. So you have some kind of process that you follow along that, right? So is that then the technology or the process that are the main driver in here? I think the process is the key dimension here. All too often we get kind of carried away with the cool technology and actually forget about the underlying principles, really. Yeah. And I think that just to follow on that, just a last question. You mentioned a couple of the IoT devices. There is also something around machine learning, right? Right. And how does that play out for you? Where do you use that? Well, first of all, actually, in connection with what I was talking about with the IoT device. A good example there is those devices and that platform enables us to track where product is. But an extra evolution of that is actually extracting that data and using that for a variety of purposes. For example, you can see if every day your truck gets stuck on the Copenhagen ring, then maybe you want to do something about the scheduling or whatever. But also that customers don't want to know where's the truck. They want to know when it's going to arrive. And that's the sort of thing that with machine learning, building that into such a platform, you can actually create really useful information out of data. So that's one example. I think there are many others in the basic processes where you can take away a lot of the typing that goes on every day just to enter an order and do things like that smarter. Absolutely. And I need you to come back a bit on the people side because I think that many of us, and when we're talking about the current pace where things are changing, the technologies that are coming up, how do you make sure that you're going to be able to do things like that kind of evolution? How do you make sure that the people are up to date with the new stuff that is coming up and that you're now is not, you know, lacking behind or waiting for the next thing to blow up? Yes, that is a real challenge. Of course, people are different. People like myself that have worked for a long time may be more challenged with some of the technology. And I guess this actually is where it taps in for us to our drive around diversity and inclusion and having a workforce that where you can bring together, for example, older, experienced employees with younger guys that are, you know, the key guys on the technology and mix things up a bit. Okay. And help the young guys learn about the, you know, the real world processes out there that we're running. And the older guys like me understand how my iPhone works. But that is great. I actually, I think, you know, in the last couple of months, there is no secret that there would be a lot of shocks around. And I guess you also were affected by that. Did any of the things that you have done here that you mentioned, did they help? Did they support you being more agile, more able to adapt to any kind of situation? Yes, there's definitely some results from this real -time visibility program that we have in terms of in the early days of when Europe shut down, for example, even within the Schengen region, there were issues at borders, which we're just not used to, and holdups and stuff. And actually just, you know, the basics of knowing where things were helped us a lot with this. But I think just in general, we actually came through that period remarkably well with the help of our service providers. providers, people like Maersk and others that actually kept goods moving. Quite amazing, actually, even back in March and April, when you and I couldn't travel across Europe, we managed to keep product moving. Really, the issue was around what our customers were doing and whether the demand was still there. Okay, that is fantastic. Thank you. Now, I think that before we wrap this up, we have a poll as well to understand how the people that are listening to us are thinking. And for that, the main question is, where do you expect to see the primary benefit of digitalization? And then there are a couple of options in terms of either improved customer service, reduction of cost, new business models and channels to market, or improved employee satisfaction. And we're going to leave them with that. And maybe you have some takeaways for us? Yes, I'd gladly share a few takeaways as we finish. Really, the first point is next week, perhaps, or as soon as possible, visit the frontline operations, go out and talk to people in customer service, go to your warehouses, go and see how Amazon-like you are, and see how well maybe the technologies you have in place are working. And use that, like talk to the people on the frontline and learn from that. And then the second point, and this is maybe more a medium term area. I was talking before about collaboration and perhaps working with your supplier base on some proof of concepts. One example at DAO, we worked together with IBM and Maersk on a proof of concept around blockchain, to use blockchain to try and streamline the numerous documents that are involved in international shipping. And we worked together with IBM and we worked together with IBM and we worked together on that. But that's just one example. And then finally, the last point I'd like to make is really going back to what I mentioned before. At DAO, we call it North Star. But whatever you do, you really need to have a framework around this and you need to make sure that executives are leading the program. And that's important because this is going to be a long journey. And of course, it requires resources. And you're going to have to prioritize and make decisions good decisions about where to invest, which technologies to go for, et cetera. So with that... Join me here. Yes, excellent. Hi. So thank you very much for that interesting conversation. And please, to all the audience members, if you have any questions for Peter, we do have some time to get some questions answered that maybe you haven't been able to get across. I have already gotten quite a few here. And I can already promise you, they're all starting with a high. Wow. It's all about how. It's all about how do we do this. But I do want to start with a question before we look at the poll results. We've talked a lot about the challenges. You know, so what didn't work? What has been challenging? But there must have also been something exciting about this. And I'm thinking for you as a leader in this space and really being deeply immersed in this digitalization journey, what has been an exciting moment for you where you look back now and you think, this was great. Right. Yeah, that's a great point. And really simple things like the first time that we've given customers access to things like our real-time visibility platform and the feedback that you get, simple things like that, simple things like some of the messaging that we got, say, during the COVID period when life was so difficult for everyone and they were just very delighted with what we were still managing to achieve despite the challenges. Great. So some challenges, hopefully a lot of excitement and hopefully a lot of benefits. Absolutely. And we've asked the audience, so, you know, what are the benefits that we can see? And we want to have a quick look at that poll. The poll says that 30% see the primary benefit as improved customer experience. 39% say it's increased productivity. 30% say it's about new business models and channels to market. And only 1% says the primary benefit is about improved employee satisfaction. So I think we have, you know, you know, a triad, so to say, of benefits that the audience can relate to. But I'd love to hear from you. Why is improved employee satisfaction actually a great benefit of a digitalization strategy? Right. Yeah, it's kind of surprising. Right. But, well, maybe not. It really, to me, it's something that will follow, I think I made the examples before. If you talk about customer service and improving things for your customer, you're also improving a lot of things for your frontline organization. By using machine learning to take away repetitive, boring tasks and giving people more analytical tools that they can do higher value work, analyze and find opportunities to work on improvements, rather than grinding through the same boring stuff again and again. Those things, you know, taking away some of today's hassles is bound to improve employee satisfaction. I think it's something that will follow regardless of what your main thrust will be. Yes. So please also keep this in mind when you're working on digitalization strategy that it's actually going to have a ripple effect in your organization. We've gotten some great questions and I told you there are a lot about how do we do this. And I would like to start with a question from Michael. So thanks, Michael, for asking this question. How long-sighted are your views when you invest in digitalization technology and how often would you implement changes? So talking a bit about the timeline. Right. And maybe using some of the examples around this real-time logistics visibility. We always typically set a timeline that's too short. We think we're going to achieve this, say, rolling out a global program for a particular mode of transport in two years and then realizing, well, maybe you can get quite a long way to do this. We're going to go away in that time, but it takes longer. And so I think like the fundamental choice around the platforms is kind of set for a reasonable period. It wouldn't make sense to chop and change faster than that. And to some extent, because it's so much about the processes and not the technology, not which software partner you've got, that you could make that switch later on. And it's really not about that. Yeah, great. You know, you mentioned these partners. And I think there's a lot of interest around that ecosystem that you're creating, the reaching out into parts that are not within your organization. I think that's a trend. You know, we also heard Keith mentioning before. And Matthias here has the question of how do you integrate these partners in your supply chain? So how did you master that complexity that you mentioned earlier? Right. Yeah. No, that's a good one. It's a pretty bumpy road, actually. Globally, we try and standardize as much as possible and roll out the same tools. But there are some great examples, actually, of where a local organization, like, for example, our colleagues in India, work with a local entrepreneur to actually come up with a way of connecting these GPS devices and give some information that really helped them a lot with numerous things. So somehow finding the right balance of letting people move forward independently, actually, with a solution in that case that was not really leverageable to other areas, but still a great learning experience, somehow trying to find that right balance of pushing the overall corporate view, but still allowing some sort of local decision making around the specifics. Do you have any advice on how do you actually, how did you find that balance? I'm guessing it's a constant give or take and figuring it out. Do you have any personal experience? Well, the people out in the regions, they roll their eyes and say, oh, it's corporate again, not letting us do what we want to do. But somehow making sure that when you set up a project to roll out some specific technology, making sure that you do tap into the organization globally, we try to include people right from an early stage in the design so that they can give input on how it's going to be set up and kind of create what we term super users, the people that ultimately will go back to their day jobs, but will be kind of like the leading person in that local group that can actually show their colleagues how their iPhone works. Yeah, exactly. And there's also a great benefit of them actually feeling empowered. The ownership, yes. It turns from we're doing something to them to getting them involved in making some important change happen. Great. There's a question related to this that comes from Lars, actually. So Lars, thanks again for posing your question. And it has to do with the fact that digitalization and introducing technology into an organization can also lead to alienation. So you talked about involving people, creating super users. But there might also be a few people who are afraid, who are afraid to be replaced, who are afraid that, you know, the robots are taking over. Yes. That kind of fear scenario. How did you kind of proactively tackle that? Or did you perhaps not even address that issue up front? We sent the robots in to speak to them. Exactly. Really, it comes down to classic change management. You know, you know, you look at the robots. You know, if you look at any change, you're going to have the leaders and the laggards and you have to use all of the tactics that you'd use in any change environment to deal with that. And like give people every chance to change, keep relating it back to what's in it for them. Yeah. You know, getting down to, you know, this new technology should take away this boring stuff and allow you to, you know, do your job better and work through those issues in that way. Yeah. Yeah. Great. Well, Peter, this has been really insightful and I hope, you know, audience found this insightful as well. Feel free to leave comments for Peter and we can relay them to you. Thanks so much for being with us and coming here on this great occasion. You're welcome. Thanks.