LOTTE Wedel: driving innovation for a sustainable business

“Supply chain is a challenging role, its complexity constantly grows to reflect business needs, products, developing technology, optimisation and efficiency,” says Sławomir Kluszczyński, Chief Operating Officer (COO) at LOTTE Wedel. For a business that has a vast amount of history and tradition, it is important to balance innovation with a legacy that has seen it win the hearts of chocolate lovers worldwide since 1851.

“Our industry is continuously changing,” notes Kluszczyński, “in particular our consumers are becoming increasingly aware of the impact of not having an environmentally sustainable business. The industry is not waiting, it is doing everything it can to support sustainability, and so is Wedel. It is a core part of our company values, a lot of our activities are focused on our impact on the environment,” he continues.

When it comes to company values, Wedel has undergone a cultural transformation this year: “We have recently redefined the mission and vision of Wedel as well as our organisational values and employee awareness within the entire organization (culture research) and for individuals. The next steps are to support employees with tools and systems that will help new organisational culture. All of this is to provide the company with an innovative view as well as quick solutions that will help achieve the goals set in the long-term strategy,” explains Sławomir Kluszczyński.

Current ways Wedel is driving sustainability throughout its business include, water and energy saving solutions, zero-waste activities and reduced plastic and paper usage. “We have a zero-waste policy at Wedel, sensors that limit the use of both water and electricity have been implemented throughout the business. In addition, we use mobile solutions and applications to reduce the need for paper printing as well as streamlining the amount of printing machines available,” says Kluszczyński. “When it comes to plastic waste, we have eliminated it from our canteens, replacing plastics with biodegradable substitutes. Where we still need to use plastic we reuse as much as possible in order to reduce our impact on the environment.” 

However, it is not only company implementations that are driving Wedel’s sustainability focus. “We work with suppliers and partners in logistics, that share our environmental goals as well as educate our employees on environmental best practices, including workshops detailing correct waste segregation,” explains Kluszczyński. Wedel is currently in the process of developing its CSR Strategy that will incorporate a long term sustainability plan. It is expected to be announced in early 2020. 

In addition, Wedel has established multiple social responsible activities, including cooperating with NGO’s, partners and institutions “We feel very close with Praga-Południe, where our factory has been based since 1930, so we are involved in many local activities including: supporting The Praga Museum of Warsaw, becoming a strategic partner for “Polish-German Gardens” to revitalise nearby parks and sponsoring ‘Wedel’s run’.” In addition to these partnerships Wedel also appreciates long-term cooperation.  “Examples of this type of partnership is Stowarzyszenie Serduszko dla Dzieci (Heart for Children Association) which we've already completed many interesting projects including the foundation's proteges take care of hives located on Wedel’s factory rooftop while learning the basics of entrepreneurship and sensitising to environmental issues. We also support the construction of a city farm in Wawer which will be a friendly educational space enabling children and adults to enjoy the benefits of nature as part of gardening and farming workshops. Our employees are involved in gardening and construction works, including those related to the construction of the playground,” comments Kluszczyński. 

When it comes to having a sustainable business for long-term growth, “innovation is needed to bring increased value to changing customer demand and industry trends,” says Kluszczyński. “At Wedel, this way of thinking is ingrained in the mindset of our people. We call this process ‘Kaizen’ - to change for the better. 

“Wedel is in the early stages of its industry 4.0 development strategy,” comments Kluszczyński. In the last couple of years the company has begun to develop and implement innovative technology to transform its operations.  

To compete with increasing quantity demands of its ‘Ptasie Mleczko’ products, Wedel has developed innovative industrial-sized technology to allow a faster decorative process. In addition, Wedel is utilising sophisticated machinery to perfect its packaging process to remove preservatives. “We have developed a tray with a unique foil that prolongs the freshness of the product inside,” says Kluszczyński. Wedel has also been utilising iTRAK, an intelligent track system by Rockwell – most innovative motion solution on the market today – the  technology to standardise its product cartoning process by implementing magnetic drives. 

When it comes to digital transformation of its systems, Wedel is working on a scheduling tool to strengthen the company’s production line. “We are currently in the last development stage to digitally transform our scheduling system used for inventory management. With this new technology - which we have begun to use some aspects of - the company will be able to optimise its processes to reduce cost and achieve a more efficient production line. To develop this system we have been utilising IBM’s sophisticated algorithms.” 

For Wedel, Artificial Intelligence (AI) and machine learning, is still conceptual, with discussions for using automation in its packaging processes underway. However, Wedel has begun gathering data to build the foundations for rolling out these innovative technologies. In addition, it is utilising 3D printing for its products, “we currently use the technology for sample products and manufacturing of spare parts for some equipment,” highlights Kluszczyński. We use advanced technologies during consumer research, to get to know our present and future clients’ needs in the best way. By analysing micro-expressions or brain activities to see what kind of emotions and reactions our products awakes.”

Other key areas the company is focused on include factory expansions and exporting products to Russia. “We are spending a lot of resources and efforts, to achieve our investments. Our factory expansions have included, new products, hybrid warehousing, IT systems and production machinery, this expansion is scheduled to be complete in 2021. In addition, we are continuing to work on exporting to Russia, today the economic climate is much better now, both in terms of currency rate, custom duties and increased acceptance of foreign products.”

When it comes to partners, Wedel’s key long-term partnership is with its owner LOTTE. For both LOTTE and Wedel the partnership is mutually beneficial in that it provides further market access and helps to develop innovative products and business operations. At the same time, cooperation between Wedel and LOTTE is based on partnership. Wedel is autonomous and is locally managed – “The reason is that LOTTE trust us and knows that we know Polish confectionery market the best and we have the biggest experience in running legendary chocolate company. The company's long-term strategy is being developed and enforced in Poland” – explains COO. 

Kluszczyński also emphasises that “Wedel is very proud to partner with big international and local networks and suppliers. We collaborate with pride, achieving sophisticated solutions and tailor-made offers for customised products. In return Wedel is present in a wide network and benefits from long-term sustainable business partners.” 

Reflecting on the company’s transformation to date, Kluszczyński believes Wedel’s biggest success is its ability to maintain its heritage products while continuing to innovate and transform in order to keep up with changing industry trends. Kluszczyński attributes the company’s overall ability to achieve this to its people, “we value our people at Wedel, our Wedel family’s dedication to ‘Kaizen’ is what drives our success.”

“Ultimately, at Wedel, we always want to have our heritage of guaranteed quality and the best taste. However, Wedel wants to continue to strive towards a more sophisticated factory that has the capacity to harness innovative technology. As a result we will have the ability to keep up with customer demand and changing trends, to further drive a sustainable business both environmentally and operationally,” concludes Klusczynski.