Oberham: Innovation for customer needs

As the world's largest specialty chemical company, Degussa meets and leads the needs of customers in all aspects. A series of scientific research achievements have gone out of the laboratory and into the market. For example, nano-amino acid group and raw materials for sunscreen cosmetics have been developed. Dr. Alfred Oberhdz, Director of Degussa's Board of Directors and Chief Development Officer, believes that in order to become the preferred supplier of customers, it is not enough to lead only in scale and technology, and continuous innovation is also required. The most important driving force for innovation is the market and customers. To innovate from the idea of "providing solutions for customers". Innovative products and system solutions are built on an understanding of customer expectations, an understanding of the current market, and an understanding of the future market.

How can Degussa's products and solutions for customers be recognized by them?

Price advantage is not our primary consideration. Because chemicals can be described by molecular formulas, it may be unique to one company at first, but then other companies can make the same products according to such formulas. If a chemical can be produced in Germany, surely the same product can be produced at a cheaper price in China, where labor costs are lower. This means that if we want to increase our competitiveness in the global market, we should first understand what our customers want and then produce value-added products for them.

For example, Degussa produces an amino acid that is used to increase the nutrition of animal feed. What we do is start by asking our customers what kind of feed they typically use, whether it's soybeans, corn, barley, or wheat. Then we design new formulas based on their needs and our past experience, and consider which minerals to add to the feed for more balanced nutrition. And we sell the formula as well as the product. This product has been well received by customers, and now the annual output has reached 500,000 tons.

Through which channels does Degussa understand customer needs?

We use a multi-channel approach to reaching out. That is to say, our sales personnel and their purchasing personnel, our technical application personnel and their technical application personnel, and our R&D personnel and their R&D personnel have multi-point, multi-faceted, and even cross-contact contacts, and constantly communication. For example, when we deal with customers in the auto industry, we see that they predict that more seniors and women will drive in the future. This requires the automotive industry to produce vehicles with higher safety performance. In this way, we start to produce some new materials for them in response to the new needs of customers in the automobile manufacturing industry.

We also focus on understanding the needs of our clients' clients. Taking the tire industry as an example, we are not only in contact with customers in the tire manufacturing industry, but also in contact with their customers - customers in the automobile manufacturing industry, to understand their situation and better meet the needs of our direct customers.

How does Degussa ensure that the production, engineering, etc. personnel who are not so close to the customer really understand the customer's needs?

We have established a "linking knowledge" network within the company. It is clearly required that each department should not go its own way, but should cooperate and coordinate with each other, exchange knowledge and share experience across departments. Various departments of the company communicate with each other on a regular basis, so that every employee can keep abreast of the latest status and needs of customers. It also introduces the latest developments and innovations in their respective departments. Once a department has an invention, other departments will soon know, and this avoids duplication of innovation in different departments.

In order to encourage mutual learning and borrowing between different departments, we have established the "Not Invented Here" (Not Invented Here). Departments or individuals that make inventions and creations can win this award, departments or individuals that copy and learn inventions and creations can win this award, and departments or individuals that promote the process of mutual reference can also win this award. Last time, the company created an effective logistics system in North America's construction chemical materials department. Through accurate calculation, the optimal transportation route can be obtained, avoiding truck air transportation, and can serve a large number of customers in North America at the same time. Their approach was soon followed by a division of the company serving customers in Europe. As a result, we awarded a total of 75,000 euros to both parties.

How does Degussa promote the marketization of R&D projects as soon as possible?

We have approximately 3,100 employees dedicated to R&D, many of whom work in a project house, a Degussa-specific organization.

Each project team consists of 20 to 30 scientists, engineers and technicians from different business units of the company. They work together on a particular topic for three years. They work closely with each other, share knowledge with external partners, and communicate with universities and institutions that conduct basic research. To develop new areas of knowledge and create new business opportunities.

The work of the project team is very effective, combining R&D and industrialization well. For example, the research results of the nanotechnology project group and the catalyst project group have begun to be commercialized.

Does the company have special requirements for the project team?

Of course. From the very beginning, we carefully selected the personnel: first, they should be able to adapt to teamwork; second, the way of dealing with people should be very simple and direct; third, the average age should be young and have a strong market awareness. What we want is not those gray-haired old scientists who are immersed in research in the laboratory, but a group of young people who are extremely efficient.

After the project team was established, the company required them to complete all their work within three years, which put a lot of pressure on them on the one hand, and gave them a lot of motivation on the other hand.

Like our first project team, the chosen leader was only 35 years old at the time. He himself is energetic and extremely flexible. He selected a group of people who are also good at research and have a strong sense of making money. As a result, they completed the first experimental projects in almost six months, while in traditional R&D departments, the six-month plan may have just been made.

How does the company integrate its many internal innovations?

We formed a separate legal entity called Creavis. It is an institution that overrides the business units and has three main tasks. First, if there is a project across business units, it will lead the organization and mobilize all resources. At the same time, at the company level, we will also provide financial and material resources and other support. Second, it has a venture capital role, and if it finds that there are some good projects that are not in the company's existing plans, it can invest in developing the projects. In the case of special projects undertaken by small companies, it can also be used as a venture capital to help develop these projects, while incorporating scientific research results within Degussa. Third, it provides a platform for joint development for some projects. For some interesting projects, first set up a project, and then convene experts to set up a project team.

85% to 90% of Degussa's R&D activities are carried out within the business units, and the remaining 15% to 20% are operated under the umbrella of Creavis. In order to ensure that Creavis has good contact and communication with the business department, the company has four people responsible for management and coordination, and these four people report directly to me.

How does Degussa balance the risks of innovation?

Degussa's experience is that first of all R&D projects should have a good combination. There are both short-term projects, medium-term projects, and projects with long-term goals.

Secondly, we divide R&D into three levels: the first level is that the technology is not so new and the market is not so new; the second level is that it may be a new technology for our company, facing the New markets, but may not be new technologies and markets for the whole world; the third level is that product technologies and markets are new to the whole world.

At these three levels, the risk of innovation is constantly increasing. We dedicate 3.2% of our annual sales to R&D, 90% of which is used for the first two tiers of research and development, and the other 10% is dedicated to the third tier of high-risk projects. We boldly invest in projects that have future development, and stop decisively for some unsuccessful projects.