Digitalization

Today, digital technologies are evolving at a faster pace than ever, becoming increasingly complex and affecting more and more people. As new digital technologies dramatically reshape industries, Lenzing pursues efforts to leverage the benefits of these technologies to optimize its operations, enable transparency and traceability along the value chain, and provide additional value to its customers.

Digital solutions leading to a new way of work

After the heights of the COVID-19 pandemic, Lenzing Group has retained the option of remote working. Its infrastructure is still well-prepared for this new way of work with excellent video conferencing and virtual collaboration tools. To maximize IT security for remote working, Lenzing makes sure that all protective IT security measures are maintained at a high level, for example, by providing handling instructions for data protection and information security at home or by applying the same security patches at home that are applied in the office.

“Lenzing eSign” is another tool that Lenzing uses in continuously leveraging digital process optimization. It allows documents to be signed with qualified electronic signatures that comply with the EU’s eIDAS regulation and the UNCITRAL convention. Around 900 employees worldwide are currently authorized to either sign or approve thousands of documents with this intuitive and mobile tool. It has replaced several paper-based processes, virtually eliminating the need to print, sign, scan and redistribute documents and contracts and allows documents to be permanently archived. The updated version, which is being prepared and tested this year, contains powerful workflow features and can even include external parties in signing documents.

These measures have made large-scale remote working a highly viable option for the Lenzing Group. Human resource experts assume that many employees intend to continue working from home in the future, at least for some time. Remote working is particulary likely to appeal to a younger generation of employees because it allows a better balance between work and private life. Besides this social aspect, moving to a more digital working environment can also help to improve the environmental footprint. For example, the aforementioned replacement of several paper-based processes eliminates the need for printing, and thus conserves valuable resources. Since the start of the pandemic, significantly more meetings have also taken place online. Overall, remote working and more digital events have reduced commuting and business travel, which will likely lower CO₂ emissions.

End-to-end (e2e) digitalization program

The recently launched SAP S/4 HANA implementation program will intensify digitalization efforts along e2e processes with the aim of embedding the same standard of compliant, repeatable, consistent, and transparent processes throughout all Lenzing sites. As best practice principles will be used for the processes, the execution of this program will reduce process complexity and hence increase efficiency.

Digital Academy

The Digital Academy was established at the end of 2021 as Lenzing’s internal training facility. Lenzing is consequently fulfilling important requirements to support its strategy, namely:

• Availability of qualified personnel
• Reduction of labor market dependence
• Increase effectiveness and efficiency by improving end user IT application knowledge
• Preparation and support of the SAP S/4 HANA transformation
• Reduction of IT support effort
• Digitization of the workforce for optimal integration of applications
• Increased awareness and capabilities regarding information security and data protection

Lenzing aims to accomplish this by investing in IT applications and infrastructure; however, it is aware that their potential can only be fully captured with skilled employees.

The Digital Academy is being established as a comprehensive training program for relevant IT applications and topics. Its medium-term focus is on SAP, digital workplace applications, IT security and data protection.

Content is provided in training formats (classroom training, virtual training, videos, printed material, etc.) that reflect the needs of the target groups. A modular structure enables training up to the level of application experts (e.g. key users or IT consultants). A system landscape has been developed for this purpose that provides a clear overview of the content. In 2022, there were 75 training courses on SAP and digital workplace that reached 928 participants.

The SAP part of the Digital academy is also aimed at external participants such as students and the unemployed. Tailored programs are planned to reach these groups and thus address the difficult situation on the labor market. In 2022, the “AMS Track” program focusing on unemployed individuals was successfully launched; five new employees were recruited.

The Digital Academy program is planned to be refined and expanded in 2023, while the concepts developed are intended to be implemented over the same period.

Exploration of digital technologies

A dedicated Digital Innovation Function was launched in 2021 that explores the application of new digital technologies along e2e processes, digital services, and digital interfaces to customers. One achievement in 2022 was the start of the implementation of a digital customer portal that aims to connect Lenzing with its value chain partners and offers them digital services. The use of artificial intelligence to optimize operational processes is also in a prototype phase. This project aims to maximize the yield of input materials and reduce energy consumption.

Digital solutions for transparency and traceability across entire supply chains

Beyond ongoing digitalization processes in its own operations, Lenzing is committed to driving digital solutions throughout the supply chain. Lenzing thus aims to improve transparency and traceability in the textile and nonwovens industry. Transparency means openness towards the people who come into contact with Lenzing fibers. This is crucial as only an honest discussion with the industry can ensure traceability, verifying the origin of Lenzing fibers throughout the supply chain up to the finished garment.

Lenzing’s fiber identification system and E-Branding Service form the basis of its overall approach to transparency, while the TextileGenesis™ blockchain project uses the data for maximum traceability.

Lenzing follows a three-pillar approach to a more sustainable and transparent supply chain:

Building blocks of transparency

Fiber identification system

Lenzing has developed a technology for fiber identification. The system was successfully implemented for LENZING™ ECOVERO™ branded viscose fibers, TENCEL™ x REFIBRA™ branded lyocell fibers, and the LENZING™ FR portfolio. In addition, the VEOCEL™ product brand launched the beauty industry’s first fiber identification system for LENZING™ Lyocell Skin, LENZING™ Lyocell Fine Skin, and LENZING™ Lyocell Micro Skin fibers.

The fiber identification technology relies on the physical identification of fiber origin at different stages of production such as the fabric and garment stage. This enables full fiber origin traceability and counterfeiting protection. It thus protects the brands and retailers by providing assurance that their products do not contain fibers made from wood from controversial sources. This guarantees that the fibers are produced in state-of-the-art-production facilities that meet high standards for resource efficiency and environmental and social responsibility.

E-Branding service

The Lenzing E-Branding Service is an online platform that provides customers along the value chain with access to Lenzing’s product brands.

Registered Lenzing textile partners can apply for fabric certifications, license agreements, or Lenzing labels. Lenzing nonwoven partners can also register and apply for combined certification and license agreements. In addition to the supply chain disclosure, certification also includes fabric testing by Lenzing only fabrics that really meet the defined standards are accepted.

After acquiring the license to use the requested Lenzing brand on the final product, partners may use the associated product logos in their communications to the end consumers. Ready-made Lenzing labels can also be provided to identify the product on request.

In addition to enabling end consumers to make conscious purchase decisions, the platform aims to protect the Lenzing brand portfolio (TENCEL™, LENZING™ ECOVERO™, VEOCEL™, TENCEL™ x REFIBRA™). It helps Lenzing and its partners defend the brands against counterfeiting and assures the end consumers that the product is exactly what the label promises.

Target groups for the Lenzing E-Branding Service are all partners along the value chain, starting with direct customers (e.g. those who buy Lenzing fibers) to fabric/roll-good manufacturers/converters and manufacturers of the end products all the way to retailers who ultimately position the goods at the point of sales including online stores.

Supply chain transparency through the Lenzing E‑Branding Service

Many consumers know that not all textiles offered on the market are produced in an environmentally conscious and socially sustainable way. Given the complexity of supply chains, they depend on information on the packaging or label to make informed decisions.

Ingredient branding to communicate raw material sustainability

Lenzing has adopted an ingredient branding approach in which it collaborates with brand partners in the value chain who convey the valuable properties of the fiber to the end consumers. Retailers, in turn, need supply chain partners who can positively support them in communicating a believable and consistent sustainability story. Lenzing has seized this opportunity with its branding platform.

Downstream value chain track and traceability via blockchain technology

Building on several successful pilot projects in 2019 with the innovative start-up TextileGenesis™, Lenzing introduced a digital platform for textile supply chain traceability in 2020 – a milestone for the Lenzing Group. The digital platform was launched in November 2020 for TENCEL™ and LENZING™ ECOVERO™ branded fibers.

The platform provides customers, partners, and consumers with an overview of the entire textile supply chain. Supply chain traceability has become a top priority for apparel and home textile brands. Lenzing’s new blockchain-enabled supply chain traceability platform supports the entire supply chain in meeting increasing demands for transparency and sustainability.

More than 1,500 different textile value chain companies (spinners, fabric mills, garment makers etc.) have joined the platform in 2022. Several large fashion brands such as H&M and Bestseller have started rolling out TextileGenesis for all wood-based cellulosic fibers. Lenzing has experienced an increasing demand for fibers with blockchain traceability. The number of Fibercoins™ issued every month is rising steadily.

TextileGenesis™ platform: Fibercoin™ technology to ensure traceability along the supply chain

By using innovative Fibercoin™ technology in the TextileGenesis™ platform, Lenzing and other brand partners can now issue digital tokens (blockchain assets) in direct proportion to the physical shipments of TENCEL™ and LENZING™ ECOVERO™ branded fibers. These digital tokens provide an unique “fingerprint” and authentication mechanism, preventing adulteration, providing a more secure and trustworthy, digital chain of custody across the entire textile supply chain, and, most importantly, ensuring the materials are sustainably produced.

Continuous digitalization investments in operations

Lenzing continuously invests in the improvement and expansion of its production facilities. Modern plant engineering generates a wealth of digital information that is enormous importance for further operation of the plants. In the past year, data quality has been significantly increased to ensure the seamless transfer of all information from engineering, startup, operation, and continuous improvement. For example, a 3D plant model is used in the development phase for reviews and walk-throughs to best meet the needs (health, safety, operability) of all involved persons. This data model can also be used in maintenance for efficient services. Another area involves the digitization of old inventory documentation: The documentation was scanned by artificial intelligence in order to implement additional extensions and adaptions to the then-current needs of existing plants. All measures lead to an efficient process and thus in rapid implementation of measures and improvements.

Furthermore, services such as the Controller Performance Monitoring tool (CPM) have been introduced for continuous process optimization. These tools provide a quick and easy overview of the entire process control of a plant and thus indirectly of the control quality of the process. This drew attention to weak points and opportunities for improvement. Specific measures were then developed to stabilize and improve processes. These improvements have resulted in more stable, efficient and resource-saving operations with fewer failures and alarms.

Another such services is “Alarm Management”, which reduces the number of alarms in plant control rooms, thus reducing operator stress and enabling them to take better and more targeted action if worse comes to worst.