How digital enables servitization and streamlined processes at Jotun

Profile picture for user Morten Fon By Morten Fon April 22, 2020
Summary:
Speaking at a recent IFS event, Morten Fon, CEO of global paint company Jotun, describes how two forms of digitalization are evolving its core business

Jotun factory in Yanbu Saudi Arabia
(via Jotun)

How does a paint company go digital? I'd like to share our story. We're a truly multi-national company with 39 production facilities around the globe and a market presence in over 100 countries. We develop, manufacture and distribute interior and exterior decorative paints to consumers and professionals. Our paint products protect and beautify several iconic buildings. We are also the world's leading provider of marine coatings to the newbuild and maintenance markets. In fact, almost one in four of the world's vessels have Jotun coatings applied.

Our business has created a strong global presence by focusing on quality, brand management and standardized business processes, in which our enterprise resourcing planning (ERP) software has played a major role.

Challenging the norm

We consider ourselves a true challenger brand that is prepared to take strategic risks, finding innovative ways of going against the grain from a growth perspective. We have, for many years, been the fastest-growing paint company in the world and have achieved that based on our corporate culture. We are a privately held company that likes to move into new places and to develop new solutions.

The digital advantage

It seems that everybody talks about digitalization. We see it from two perspectives. One is where we can use a digital solution to become more efficient, to be more streamlined, to bring down our costs. The second is even more important. How can we use these new tools to improve the offerings to our customers and the markets we serve? We were early to acknowledge this as the area where we had the most to gain going forward.

Here is an example of that second form of digitalization. In the old days we sold products, for example, antifouling coatings to make sure that ships were sailing smoothly through water. Now, we like to think that we are selling outcomes, in this case efficient ship hulls. As well as applying our coatings, we have put sensors on board to measure how efficient the vessel is. We use the Internet of Things to connect all the sailing vessels all over the world coated by us to deliver real time information from them. This means we can measure when they need to go to maintenance, and in turn become a better partner for our customers.

Global complexity

The first strand of streamlining also plays its part. Like most manufacturers, we must control and monitor costs carefully, especially in light of global price volatility for key raw materials used in production, such as epoxies, titanium dioxide, copper and zinc.

Yes, it is important for us to continue growing and for that growth to, in turn, to facilitate efficiencies. After all, that kind of streamlining is how businesses are able to compete in the future. Our challenge being a global company present in lots of markets, is to ensure that we balance our global processes with the needs we see locally. This is where our ERP software has played such a crucial role.

We replaced some 15 legacy systems with a unified, fully transparent ERP solution from IFS. It is deployed across 120+ sites in 38 countries supporting major aspects of the business, increasing to 46 countries when the roll-out is completed within next 12 months. Applications components are used for financials, manufacturing, logistics management, procurement, CRM and maintenance.

While still supporting regulatory and legal requirements for local countries and territories, moving to a single global system has increased standardized business processes, provides better control, greater efficiency, and enhanced global collaboration.

Process improvement

An example of process improvement can be seen within Jotun’s complex business model of cross border sales and invoicing, where our business software is used for efficiency and digitalization of workflows. For Jotun's main warehousing operations, implementing the warehousing data collection has, with the help of mobile devices and bar code technology, allowed for increased inventory efficiency and faster throughput.

But that's also where we have the biggest challenge these days. We need to standardize even more than we have done so far. We were sure therefore to partner with a software vendor that invests in its research and development, to help us continue to innovate while respecting the local requirements in all the markets we operate.

Jotun is a long-term thinking company. Everything we do aligns with our longer-term vision. By continuing to invest in additional features we are able to empower our large and global workforce with modern and intuitive tools that can drive profitability.