ESTABLISH NEW PARAMETERS
Technological and societal change, sustainable resource
management and dynamic product markets,
digitalization and new work environments – just a few
of the changes that impact us and our business.
We view these trends as opportunities.
Our core business hasn’t changed much since the beginning: We produce copper cathodes whose high purity stands for excellent quality. Our raw materials include copper concentrates and recycling materials and our products include continuous cast wire rod, specialty wire, shapes, rolled products, strip and profiles made of copper and copper alloys. Furthermore, tramp elements and additional products, such as fine gold, pure silver, sulfuric acid, selenium and iron silicate are produced in our processes. In total, we produce over 1.1 million t of quality copper per year and are thus one of the leading companies in our industry.
The world is changing. The intensifying globalization of the economy, higher volatility, the interconnectedness of the markets, urbanization, mobility, sustainability and climate protection – these are all developments that directly affect our business. We are therefore called on to look ahead and adapt Aurubis to the shifting conditions. In year 149 of the Company’s history, it’s time for an upgrade to Version 149.0.
This upgrade includes an integrated view of the value chain and the digitally supported connection of its individual steps and processes in the Company. The structures from raw material purchasing to the production of finished copper cathodes are very complex. The composition of the concentrates and recycling materials varies strongly. There are also technical and economic requirements that even work in the opposite direction, such as retaining inventory. We are addressing this multi-layered framework with a new approach. The formation of an internal Supply Chain Management division within the Group organization is the concrete implementation of this way of thinking.
And a lot is going on in other areas as well. Copper recycling has always been important for us – but is increasingly gaining a new significance. With “closing-the-loop” solutions, we are taking one big step forward.
In addition to securing the raw material supply, recycling is becoming a service that involves our customers as suppliers of valuable materials. The production of by-metals and other tramp elements will be a stronger focus in the future. In the spirit of resource efficiency and in the name of our Sustainability Strategy. A comprehensive project to improve results, like those that have been successfully executed in other areas of the Group, is currently setting the course for the future of the Hamburg and Lünen sites as well.
The upgrade 149.0 will change Aurubis across the board – from an overall perspective and in the small details. Because of this, we include every employee and take them along with us on this journey.
OUR UPGRADE SETS THE
COURSE FOR THE FUTURE
We act with foresight: The “Aurubis system” received an
extensive upgrade one year before its 150-year anniversary.
And this upgrade sets the course for the years to come.
Everyone is talking about Industry 4.0, the complete digitalization and integration of the industrial value chain. The implementation of the objectives of Industry 4.0 is not only laid out in the German coalition agreement; our customers’ industrial associations are also intensively focusing on this topic.
Accordingly, the following question was discussed during this year’s “Aurubis Executive Dialogue”, the conference for our Group’s top management: What is the significance of Industry 4.0 for the copper industry in general and for Aurubis in particular? An undoubtedly large significance – this quickly became clear during the discussion. As a result, a committee will address the issue in the future: the Industry 4.0 Think Tank. Its purpose is to find answers to the following important question: What does Industry 4.0 mean for our Group in practice? How do we want to handle it? How will our production processes look in the future? What will change throughout the industry? This year’s management meeting didn’t only reveal new areas of action; it also demonstrated that many things are already underway when it comes to the digitalization and integration of our value chain. The expanded possibilities of digitalization in raw material procurement and production, as well as product sales and the new concept planned for our IT systems, are notable first steps.
Good to know:
Our main customer industries have started the initiative “Industry 4.0 Platform” to develop technologies, standards, business and organizational models and encourage their practical implementation in a cross-sector exchange. For now, it is important to view Industry 4.0 as an intellectual approach that brings together real production and information technology. In the process, the separate solutions that have been used up to now will be embedded in a single network. However, Industry 4.0 can’t be implemented with radical changes but with steady development.
Advanced analytics and big data are terms that are regularly mentioned in the media. They describe the fact that modern computer systems and mathematical methods enable support for relevant business decisions from a large volume of data. With the help of advanced analytics, it’s possible to solve very large, complex problems with computers instead of manually.
The name SCOPE stands for “Supply Chain Optimization and Excellence.” SCOPE is a model-based tool that depicts the entire primary copper supply chain from concentrate to cathode, taking commercial and technical aspects into account. The model utilizes mathematical optimization, an advanced analytics method, for calculation purposes. SCOPE is currently used in the Supply Chain Management division to support value-based production planning and procurement decisions.
It must be kept in mind for all of the measures that Aurubis’ raw material, process and sales structures are exceedingly complex. This begins with the raw materials, whose type, consistency and quality can vary a great deal. Different delivery routes and timeframes have to be taken into account due to the broadly, in some cases globally, distributed suppliers. The conflicting goals of delivering the raw material supply on schedule, managing the inventory necessary for operations and keeping the capital commitment low also have to be negotiated. In addition, the flows of goods within our international Group are diverse and characterized by dependencies. On top of that, the processing options vary and the customer is offered a broad variety of products at the end of the value chain.
To make these complex group-wide processes with their accompanying dependencies and interactions transparent and ultimately to manage them in an optimal fashion, the Supply Chain Management division – SCM for short – was created. This effective new organizational entity reports directly to the Executive Board Chairman. SCM connects and manages concentrate purchasing, recycling material procurement and production planning and is involved up to the sale of by-products.
The new division optimizes the input mix for the production facilities at the different Group sites. The purpose of SCM is to create a new and comprehensive level of transparency. All of the information and data related to the value chain are combined, processed and become the basis of planning.
This isn’t possible any more with traditional manual planning tools. Instead, we will utilize advanced analytics and a program called “SCOPE”. The latter is a universal, value-based planning model that depicts the entire supply chain from concentrate to cathode in Hamburg and Pirdop, taking technical restrictions and commercial conditions into consideration. With the help of this model, we can achieve the best combination of raw materials and thus the optimal value added under the market circumstances. The plan is to integrate other sites into the model as well. In the long term, we want to develop the program from a prototype to standardized software for the entire Aurubis Group.
At the end – depending on the raw material quality and availability as well as the contribution to earnings – the result is an optimal raw material mix that is precisely tailored to the plants’ possibilities. This means that the capabilities of the individual facilities will be utilized even better in the future.
To orient the current IT systems to this comprehensive, fundamental approach, we have started a new project called AIR. This is the abbreviation for the “Aurubis IT Roadmap”. Growing data and system quality is becoming increasingly significant for Aurubis’ level of success. The further development of the IT landscape should therefore make the material and value streams more transparent and better integrate the individual systems necessary for this purpose.
New products –
higher added value
WE CREATE A VARIETY OF
INTERFACES TO OUR
CUSTOMERS AND SUPPLIERS
From the raw material to the product. And not
just for copper. As part of our Supply Chain Management,
we have placed a stronger focus on tramp
elements and want to increase added value on the product side.
We also close the material cycle when it comes to recycling:
from the product back to the raw material.
During the production of our exchange-tradable copper cathodes, various tramp elements accumulate which can be used to produce marketable products. We want to pursue new approaches in the future to market these specialty products better. A great deal is being investigated and developed in various projects. However, it is still too early for concrete results.
Iron silicate is a good example for how we want to achieve higher added value and better marketing for tramp elements. We have started a project to bring out the valuable metals contained in the iron silicate slags that accumulate in our smelting processes optimally. At the same time, the goal is also to increase the purity of the final product, iron silicate. In this way, we want to secure our existing markets and explore new applications.
Closing the loop – the recycling route of the future
A multi-step cleaning process for copper scrap and metal-bearing production residues produces marketable cathode copper of the highest quality, which is used to fabricate various copper products.
From cathode to intermediate to finished product. Copper is used in countless applications, especially when it comes to conducting electricity and heat. Excellent alloying ability and corrosion resistance also set copper apart.
During processing and at the end of the product life cycle, metals accumulate that flow back to the material cycle due to their excellent recyclability and existing process technology. Aurubis provides tailored solutions for this purpose.
We are also taking completely new approaches to recycling. We want to focus even more strongly on sustainability aspects when it comes to processing recycling raw materials. Now, raw material security and product business have given way to a closed material cycle – resulting in improved raw material management and usage. The key phrase is “closing the loop”. With this approach, we hope to attract more customers as raw material suppliers in the future. We take back production waste and residues with a varying copper content and process them into copper again. This form of cooperation strengthens customer loyalty and benefits all participants. Both the customer and Aurubis fulfill their responsibility of producing as efficiently and sustainably as possible.
A good example of cooperation with customers is the marketing of the residual material zinc-bearing oxide, which accumulates in the KRS processes in Lünen. One partner company produces zinc oxide from the zinc in the material, while a second partner converts the by-product lead sulfate into lead carbonate. This is then returned to us – closing the loop.
We want to offer additional service to our suppliers and customers with a digital platform. The purpose of the platform is to optimize the delivery and contract processing but also to make supporting service functions more accessible and to provide a contact portal for new business. Another goal in this context is to set standards, for example for compliance and sustainability, and to view administration as a competitive factor.
The “Ultrawire” project is especially future-oriented. It goes beyond normal research and development work in both its aspirations and its timeframe. The objective is to produce a new copper-carbon compound that conducts electricity much better than the current electrical conductors. The 14 universities and companies involved in the project, including Aurubis, don’t anticipate quick results that can be converted to new products immediately. However, our participation shows that we have been trying very early on to recognize and support forward-looking developments.
APPROACHES TO COOPERATION
We handle the changes in the working world
with fresh ideas. We are repositioning
ourselves together – with transparent communication,
knowledge transfer and job rotation.
The digital shift is changing society, companies and the working world for many people. The individual is increasingly taking on a new, more responsible role: from an employee who merely carries out tasks to one who plans, manages and controls. Executing this change consciously and successfully isn’t always easy – among other reasons, because the requirements on the customer side are increasing and global competition is intensifying.
We are shaping this change actively and preemptively. First and foremost, this means that we meet each employee in his or her familiar workplace and provide support. Early and transparent communication of the changing demands is at the center of our communication with our employees.
How is this approach reflected in our everyday work? For example, in the newly emerging and – above all – holistic training and continuing education concept. The term “holistic” in this case doesn’t merely refer to transferring the material but also to the broad spectrum spanning from dual vocational education as it is practiced in Germany to qualifications for employees with an academic degree. Under the project name “Aurubis Campus”, the training and qualification center in the Group is being planned in close cooperation with the Research, Development & Innovation department. Through intensive cooperation with a number of universities in Germany and abroad, we bring our employees up to speed with the latest knowledge and technology. In addition to providing further qualifications, we attract excellent young employees and participate in innovation projects as part of this international university cooperation.
Job rotation report
“We implemented important organizational changes at Aurubis Belgium in November 2014. Twelve of our plant’s 37 managers received a new function, mainly through lateral job rotation, meaning that they didn’t change levels in the hierarchy but instead their areas of responsibility. The production sectors and the HR department were included in these changes in particular. The objectives were to develop the managers personally and to adjust their management skills to the new positions.
The preparation phase for the job rotation took about six months. A number of managers from the operational areas, Corporate HR and the Aurubis Belgium Management Team participated.
In the process, I switched from HR management to production. This was a considerable challenge for me but also a significant motivator to start something new.”
The hiring process for successor planning and the replacement of retiring employees will also change. The usual procedures and criteria are losing significance, as we want to concentrate much more strongly on promoting and developing talents. In the hiring process, we rely on systematic management audits that bring together managers, HR and external experts. The participants are included extensively. These audits are used as part of annual reviews for succession planning and are a condition for additional development and career steps. In this respect, the careers of specialists and experts will be viewed in a new light, as they will be weighted just as much as the management functions in the Group.
An internationally active group like Aurubis is a global network for the people who contribute their work, their knowledge and their experience at the individual interfaces: people from different countries and cultures, younger and older people, men and women, career starters and experienced employees who form a large global team here. Together, they utilize their diverse abilities and contribute to achieving new goals again and again.
The very good cooperation beyond national borders should become even better. This is why managers are working on projects together in networks. The rotation of employees in the Group – from site to site or from job to job – helps make future cooperation even smoother and more productive. Employee mobility in this context also means employee motivation in many cases. This view is based on initial experiences with job rotation, for example at Aurubis Belgium, which have been decidedly positive. The change in duties, which was a change in perspectives at the same time, was welcomed with enthusiasm. It is also compelling that this form of knowledge transfer, knowledge retention and knowledge deepening serves all of the participants personally as well as the Group as a whole. The continuation of the program is currently being prepared. It will shake up existing structures and create spaces for new ideas.