Drive operational excellence

“Simplify” is the strategic priority which summarizes our ongoing improvement of global processes. We will continuously drive our operational excellenceA comprehensive program to structure and optimize all Henkel’s business processes based on customer needs, quality and efficiency.
by making our processes faster and more standardized, focusing on cost-efficiency as well as end-to-end optimization.

Extending shared services:
new hubs, more business processes

We will extend our existing shared services by increasing the number of processes handled in shared service centers. To expand the global coverage of these centers, we will open two new hubs for the Arabic-speaking region and Greater China/North East Asia in addition to our existing four centers in Bratislava (Slovakia), Manila (Philippines), Mexico City (Mexico) and Bangalore (India). The number of employees in the shared service centers is expected to grow from around 1,500 by the end of 2012 to more than 3,000 in 2016.

Integrated IT platform

In addition to shared services, a stronger focus on information technology (IT) will be critical to increasing the efficiency of our business processes. We will leverage an integrated global process platform supported by significant additional IT investments. Out of 2,200 existing processes, around 800 have been identified as global standard processes to be deployed in all regions and businesses. In 2012, the pilot implementation in Switzerland and the first wave of six Asian countries already confirmed the advantages of this transformational IT program: more transparency, more standardization and real-time global management across all business units. Thanks to end-to-end process harmonization, our shared service centers will deliver their services even more efficiently, as the data they need to handle their processes will be more standardized in the future.

Increased efficiency: driving value generation

We aim to increase our efficiency by sourcing via global hubs, expanding e-sourcing and reducing the number of suppliers globally by around 40 percent by 2016. We will improve our structural costs and optimize our global manufacturing footprint on an ongoing basis. In addition, we seek to keep our net working capitalNet balance of inventories, trade accounts receivable, and trade accounts payable.
, expressed as a proportion of sales, at the low level already achieved. All initiatives will accelerate our strong free cash flowCash flow actually available for acquisitions, dividend payments, the reduction of borrowings and contributions to pension funds.
generation, increasing our capacity for future investments.

Global customer service support

Simplified processes