Companies across the chemical industry have some of the same drivers – a focus on value, process safety, product quality, customer excellence, and ultimately profitability. Yet, some companies and industries do it better than others. The difference? Operational excellence.
Operational excellence is in a simple form, systematic problem-solving, and improvements. It allows people in business and its leadership to improve in decision-making, profitability, partner services, customer service, marketing, and many other important areas in keeping the business up and running in the market.
Listen in as Victoria Meyer talks about the Importance of Operational Excellence with John Yagel, VP of continuous improvement, capital implementation, and innovation excellence for Huber Engineered Materials. In this episode of The Chemical Show, John explains the important details of operational excellence, how important it is in this industry, and the difference between the operational excellence of today versus many years back.
John also provides some concrete examples of how companies are using operational excellence in normal day-to-day operations to improve customer experience, digitization, and process control. He also talks about the role of sustainability in business and the response of people in this industry when the pandemic hit and when the challenges of freezes and hurricanes across the country happen. This is surely an exciting conversation as John is bringing his expertise, knowledge, and experience to our today’s podcast. Tune in!
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The Importance of Operational Excellence With John Yagel
This week, I am speaking with John Yagel, who is the VP of continuous improvement, capital implementation, and innovation excellence for Huber Engineered Materials. John has over 30 years of experience in the chemical and materials industries at leading companies, including Dow and Grace. Also, he is an expert in manufacturing and operational excellence. So John is bringing that expertise and experience to our conversation today on the podcast.
John, welcome to The Chemical Show.
Thank you very much. It’s great to be here.
Glad to have you here. So what’s your origin story? What got you into the world of chemicals? What brought you to where you are today in your career?
It started because I love a challenge. And I was close to some of my teachers in school and learned a lot about chemistry. I wanted to take on a challenge. So one thing led to another and pretty soon I was at Penn State in chemical engineering. That led me into the industry. I’ve had a lot of great employers over the years for various positions. A good portion of my career was with Dow chemical. Now, I still look back at Dow. It’s a great company from a manufacturing operations perspective. It’s a great place to grow up and learn how to do it right.
Awesome! That’s really cool. Today, you’re at Huber Engineered Materials. I think some people may not be fully familiar with them. Can you give a brief background of the company?
Huber is under the corporation of J.M. Huber. We have several different business segments. I’m in the business segment called Huber Engineer Materials. We make several different businesses and several different product lines that provide products for all different areas. To name a couple of them, we have an area called fire retardant additives. That is a non-halogenated material that is used in industry to prevent fires, smoldering, and things like that. You would find it in the insulation of wires, especially in your car, as well as some building materials, carpeting, and things like that. It’s a great material for preventing fire, heat management, and trying to dissipate heat very well.
Then, another area in one of our businesses is called specialty minerals. In specialty minerals, we have a whole series of products, which is ground calcium carbonate. It goes into many products out there in the market. Those are largely building materials for your home, for flooring and walls, and in different areas like that. But we also have some very high-quality and very high-purity areas that go into nutritional needs like nutritional supplements and vitamins.Operational excellence is a way to bring together several different functions, like problem-solving, reliability, quality, safety, and all these different areas. Click To Tweet
Recently, we purchased a company called Natural Soda and it’s in the specialty minerals business. Natural Soda is a company that mines sodium bicarbonate, which is baking soda. Almost all of the baking soda that we use is synthetically made . We purchased a company that has a mine in Colorado. They use solution mining to dissolve it and bring it back up to the surface and then reprecipitate it into a product. It goes in all kinds of markets like animal feed, nutrition, and various other forms of naturally occurring baking.
That’s interesting. So why would you mine the baking soda carbonate versus synthetically produce it? What are the pros and cons of this?
It doesn’t exist very often in a natural state. It’s probably the biggest reason. Since it is in a natural state, it’s a very good material for feed and things like that.
That’s interesting. I wouldn’t have thought that. It’s one of those common products that probably, many of us don’t know about.
Then, the third area is Agro Solutions. This is actually a more recent and new business area for us. We’ve made a couple of purchases in the last several years. This is where we’re making chemical fertilizers and various additives for the growers and farmers to put in their spray systems for plants. We target a lot of different products of farm items that are in the fruits, nuts, and vegetables areas.Most chemical companies actually are operationally excellent. It doesn't mean that they're perfect, obviously. But I think there's this inherent tendency, and maybe it's the engineers and all of us who drive toward operational excellence. Click To Tweet
Awesome! That’s interesting. It prompts a follow-up question that I’m going to ask. John, do you guys operate globally, or is it primarily in North American business?
We do operate globally. We have a good size footprint in North America, as well as Germany, Austria, and now with some of our new acquisitions in Italy, Hungary, and various other countries.
You’ve had a long career in manufacturing and operational excellence. I know that’s operational excellence, passion, and a focus area for you. Can you tell us more about what that is? How did you get there?
Operational excellence is in a simple form, systematic problem-solving, and improvements. All manufacturing wants to constantly get better and remove defects and have their operations be trouble-free. Also, operational excellence is a way to bring together several different functions, like problem-solving, reliability, quality, safety, and all these different areas.
It probably goes back a lot to some of the disciplines that we’ve all learned and heard about, like six sigma, lean manufacturing, and things like that. So that’s a huge piece of operational excellence. But there are other areas in there too, like various technologies for reliability, even transportation systems and logistics, and everything like that.
Operational Excellence: Operational excellence is in a simple form, systematic problem-solving, and improvements. All manufacturing wants to constantly get better and remove defects and have their operations be trouble-free.
Operational excellence would be the umbrella that covers some of the six sigma, lean manufacturing, progress management, etc. That’s cool. Earlier in my career, I’ve gone through that space a couple of different times. In fact, I ran Operational Excellence at Shell Chemicals, but it’s much more for the supply chain and the customer centers. It’s the business operations side of operational excellence.
I can see the value. At the end of the day, I think most chemical companies actually are operationally excellent. It doesn’t mean that they’re perfect, obviously. But I think there’s this inherent tendency, and maybe it’s the engineers and all of us who drive toward operational excellence. But it’s also really about safety, efficiency, cost-effectiveness, and just business process effectiveness.
That’s exactly right. There are also close ties to a world called process safety management. It’s making sure that all of our chemical factories and production plants, refineries, and everything are operating in a way that they’re not going to catch on fire and have injuries of very large magnitude.
It’s interesting. So you’ve been doing this a long time, how has it changed? If you think about operational excellence earlier in your career versus where we are today, what’s the difference?
There are a couple of areas that are quite different. The base activity is the same. It’s basically problem-solving and driving perfection and excellence into everything you do. That part is obviously the same. But I would also say that at the beginning of my career, it was then a nice way to have a competitive advantage. It was a way that you can get out in front of your competitors, reduce your costs, and provide more products at a better value.
Today, it’s closer to a table stake. It exists in a lot of different areas and has made tremendous benefits and driven value throughout the industry. I would say that’s one change that has become more of a regularly occurring scenario for companies to have. It doesn’t mean everyone has it. There are still companies in production plants that still need to get on the activities of operational excellence.
Another area that has made huge differences and has grown over the years is digitization. Even 20 to 30 years ago, having all this data and information was difficult. It’s very difficult to pull all the information and data. That’s the nature of problem-solving. It’s to have the right data so that you can understand what exactly is happening. So you can analyze it very well. Over time, through all different ways, the world of process control, data collection, AI, and being able to take massive amounts of data and analyze it and put it through various algorithms to come up with an answer has really changed quite a bit. We’re using some of that right now with digitization and trying to understand anything from reliability to various other areas.
Operational Excellence: Another area that has made huge differences and has grown over the years is digitization.
When you think about that whole digitization in that data and operational excellence, do you also bring process control into that? Or, do you think about it as being outside the reactor as opposed to inside the reactor?
No, it’s absolutely inside, without any doubt. There are a couple of different terms for what you just mentioned about process control or industrial control systems. Whatever it is, it’s basically the computer that runs your process. Of course, the computer can watch it at a rate that is much greater than a human can and what we can. It can pick up different abnormalities and things like that very well. So advanced process control, and using that to optimize your process are absolutely under the umbrella of operational excellence.
Personally, I would not have put it under that same umbrella. So it’s good to understand what you do.
The products have become phenomenal. Back in the early days when I worked for Dow, we actually produced our own process control computers because there wasn’t anything on the market that satisfied our needs. Now, that’s probably not true in today’s world, whether it’s from ADB, Siemens, or Rockwell. They’re all offering just fabulous products that can run your chemical process.
One of the things you shared with me is that operational excellence has gone from process industries, like the chemical industry, that you’ve also seen throughout your career. Can you give examples of that?
It’s grown within the business. You mentioned earlier customer service and areas like that. So it has expanded from the manufacturing space into other spaces, like supply chain, customer care, and everything around that. So it’s there, but it’s also moved into other industries. As consumers, we would know and understand on a daily basis that the hotel industry uses operational excellence. How would they possibly use it?
Their interest in having your stay at their hotel, and having it be a perfect stay without any flaws, no defects, and everything going just right is a huge piece of their operational excellence. That’s a very hard thing to do when you stay somewhere and there wasn’t anything that went wrong. Everything in your room is working perfectly. You feel comfortable and satisfied with the product that you’re receiving there. They strive to hit that type of operational excellence so that your customer experience is as perfect as it can be.There are still companies in production plants that still need to get on the activities of operational excellence. Click To Tweet
Then, another area that we see actually more so on a daily basis, of a company that I admire and have some interface with some of their people is Chick-fil-A. We see this on a daily basis at 12 noon, and the line in Chick-fil-A is wrapped around the restaurant. The way that they process orders, manage the traffic flow and make sure that people move through the line and go through at a pace that far beats all the other fast food restaurants. They just do an amazing job with order fulfillment, and how they deliver the product to the customer in a way that is fast. It’s nice quality. Everyone has a good experience there. They’re a great example of using operational excellence in a normal day-to-day operation.
When I think about it, as you give these examples, John, it’s really about systems and the processes using the data to be both predictive as well as responsive. It is one of the differences. When you think about operational excellence that has evolved from this whole predictive aspect of it, to me, it has probably what’s evolved, especially with digitization.
Absolutely! Predictive and preventative activities have always existed within the world of maintenance and reliability. Now, they’re expanding into new areas like in a chemical reaction and being able to predict the quality of your product just by watching the original reaction of the polymer or whatever it may be in the reactor. So it has evolved quite a bit. Also, originally, I think, coming largely from the world of reliability, and being able to predict vibration or any other type of movement in rotating equipment to now we’re using AI to make predictions on product quality, delivery, service, and everything around that.
That’s interesting. John, one of the things I talk a lot about on the show is customer experience. I think the key differentiator for most companies is actually their customer experience. The product is easily replicated. Services and tactics are easily replicated. But it’s the experience that you bring. Also, what gets wrapped into the experience is this expectation of quality, reliability of supply, and the ability to provide the information. Based on this conversation, I would not have necessarily tied operational excellence with customer experience. It’s a key component of a holistic company.
That’s exactly right. The customer experience is a lot of things. It’s anything from how to pay their bills to how they receive products, how they order products, how well is the supplier looking out for them and has their back and is trying to make sure that they don’t have anything to worry about when you’re buying the product from us. That ability to gain their trust or loyalty based on operational excellence and always being able to supply their product is golden.The key differentiator for most companies is actually their customer experience. The product is easily replicated. Services and tactics are easily replicated. But it's the experience that you bring matters most. Click To Tweet
Awesome! That’s really cool. So John, the events of the past three years, as we entered the decade of the 2020s, it’s been unexpected versus what anyone would have predicted, especially during the COVID-19 pandemic. We’ve had freezes and hurricanes. We’ve had other significant supply chain disruptions, global political issues, and other things. All of which have really dramatically impacted the chemical industry in one way, shape, or form. What do you see as Huber’s response, or even just as the industry’s response to these issues and situations?
Some of these issues that you mentioned, we’ve always battled as they come up things like the big freeze of one or two years ago, hurricanes, and outages. We do some of our business along the Mississippi River. So we carefully watched the level of the Mississippi River and there have been times when the water is too high and so we come up with all kinds of creative solutions to move our product or move our raw materials from point A to point B in a new way other than using the Mississippi river. So that part has always existed. Certainly, COVID threw a curveball at us all and changed life completely.
Huber handled COVID in a very responsible way with great trust and respect for all of our teammates, making sure that everyone was working well at work and had all the right equipment to use and the job that they needed to do. It’s really a fantastic response throughout that and many people got highly engaged in making sure that everyone was safe and healthy and that we were operating as best we can.
Also, at that time, many people did start working from their home office and learned how to use Zoom and other online platforms. However, at the factory and the production plants, they did not. They went to work every single day. The use of masks and separation between people, all of that still continued on a day-to-day basis. Even what we normally have in the production plant, our normal daily resource meeting to plan for the day and make sure that all of our priorities are understood. Even sessions like that, we continued all throughout the COVID time.
Even if we were doing it by Zoom from the offices and in areas like that, we continued our operations without any disruption. But I think that the piece that COVID taught us is how to use video conferencing. Prior to COVID, we were a bit timid to do this kind of activity and it was clunky. The tools were not that great. We were kind of forced into it.
Luckily, the market reacted and provided products that do a great job of bringing people closer together through electronic methods. Now that we’re post-COVID, we certainly are traveling now. Most of the industry is getting out to see their customer and suppliers. But we’re using Zoom and other platforms significantly more than ever before in making sure that we can connect without necessarily traveling to the other side of the world.
Operational Excellence: Some of the issues that we've always battled as they come up are things like the big freeze one or two years ago, hurricanes, and outages.
That has been a significant impact. Virtual working has been a big part of the industry. Our frontline workers are manufacturing staff, logistics, and supply chain staff. They’ve been there to make things happen. But I think it’s also shifted this whole hurdle to get people back in the office, even just the hurdle to have customer and supplier meetings. Maybe it’s still the same number of engagements on a net basis, but the actual in-person stuff has really diminished. Operational excellence changed. Your approach to operational excellence changed, as a result of what of these disruptions of the pandemic and other things. Are you doing things differently today in 2023 versus in 2020?
We’d learned a lot during that time period. During the COVID time when we were largely in a virtual state, we tried to do various kinds of training and meetings and things like that. It was effective but not nearly as much as in-person. Now that we feel we’re on the other side of COVID, we’re back into scheduling various training that is face-to-face and doing activities like that, whether it’s group sessions, bringing teams together, or whatever it may be, but we’re fairly open with the concept of bringing people back together. I don’t think anything can replace this face-to-face interaction, and being able to have a good conversation, challenge each other, debate each other, and be able to do it in person. You can’t beat that with Zoom.
I agree. I had a really good working session with the group earlier this week in person. We’re so glad that we got together in person. It’s because the work that we were doing needed to be in-person work. We were far more resilient as an in-person team versus on a Zoom call, on a phone call, or other ways of communication.
I had this conversation last week with a few colleagues that the virtual world of Zoom and other things like that may actually cause us to move more rapidly. It’s because, in our former world, we would always try to get together. We would travel to get together, and we would have some meetings and we would say that we need to get together. A meeting would push out two weeks to five weeks because of the availability of people. Now, being able to get together on Zoom, it’s more of a conversation about doing the meeting tomorrow or getting it done this afternoon. So even if the quality is not quite the same as face-to-face, the speed at which we’re doing things has really changed.
I agree with that. I think there are two sides to the coin. What I hear from some folks who say that they’re too busy. Everybody wants to book a Zoom meeting. In the past, you might have bumped into them in the hallway, or you might have just told them that you need five minutes. Then, you will have five minutes more. But our inherent time block when we book things is like a 30-minute meeting. That’s already five minutes. Can I just get five minutes? So I think there are two sides to it. It’s making us either busier, making us faster, or maybe both. So, John, Huber is a privately held family-owned company, which is very different from some of the other companies that you’ve worked with. What do you see as the difference and how does it change your approach to people and to operational excellence?
It’s a wonderful family company and the Huber family has a deep sense of responsibility, and really being a positive force in the world. That comes through in the products that we make, and being able to make life better, basically, in many different ways to be very charitable and working very hard to provide, whether it’s habitat for humanity or all other aspects like that. I would also say that we have a huge respect and appreciation for each other at all levels of the organization throughout the organization, all functions, and a huge sense of respect and appreciation for each other.
It’s a very large company. There are over 4000 total in my area of Huber Engineer Materials with almost 2000 people. We really value each other in our own development and our collaboration. It makes diversity fit right into our strategy and activities. We enjoy learning and understanding everyone’s perspective. I really appreciate that. We also have a tool that we use called the Huber principles. You can even see it out there. You can Google it.
There’s a lot of information that we published about the Huber principles. But the Huber principles essentially are our guiding roadmap for various activities that we do. We make sure that it’s a work environment with honesty, respect, teamwork, and recognition. Also, the area where I focus a lot is to make sure that we have a strong competitive advantage and customer relationship or intimacy along with operational excellence.Operational excellence is basically problem-solving and driving perfection and excellence into everything you do. Click To Tweet
It’s such a large company. Does it feel like a family-owned company?
It feels like a family-owned company. It literally does. I’ve been with some very large companies. Dow was quite large with over 60,000 people, and it did not feel that way. Everyone was a number and it didn’t have that same feel. But I would say at Huber, it feels like a family company every day.
You touched briefly on sustainability. What role does sustainability play in your business?
In operational excellence, I’ve been working on sustainability since the beginning, and even all the way back to Dow, we worked very hard at energy efficiency, sustainability, and trying to reduce our footprint in many ways. The interesting part about that is that we were mostly working on that from a cost-reduction perspective. The electricity and gas were expensive. We could really gain and drive competitive advantage by reducing our overall footprint and how much it costs to use and consume all this energy. Today, that has grown and it’s still a good cost-reduction effort. There’s no doubt about that, especially with various areas of the world having sky-high natural gas and petroleum prices.
But it has now become much more of a responsibility to reduce your footprint and work on sustainability. So we are actually very active in this field of sustainability. I sponsor the operations activities in sustainability, which range anywhere from normal regular day-to-day continuous improvement to improve motors, insulation, and everything around that to some innovation-type activities to try to understand how we can change our footprint in a very large way. It makes sure that we consume less carbon, and it makes sure that we’re using electricity from the right sources and more sustainable sources. Sustainability has become a very large part of the world and very much so in the world of operational excellence.
Absolutely! I do agree with your point that the chemical industry has been very focused on sustainability. Not necessarily for the purpose of sustainability, but it started with energy efficiency and reduced footprint. and the whole circularity that’s already inherent in the industry. It could otherwise be a waste stream instead it becomes how we can turn this into something else, like another product, a heat source, a fuel source, etc. We’re in an industry that is getting better.
I work with clients on this in terms of just telling the sustainability story better. I think, in many ways, we can say that people would understand that we’re doing this. But the reality is that the general public does not understand. So if we’re not understanding it, managing our information, and telling our sustainability story, as well as continuing to work on it, it’s just an opportunity for us to continue focusing in this area. I think you’re right. This is a kind of a theme that I’ve heard from a lot of folks on the podcast and elsewhere that sustainability has always been part of our business, from an energy efficiency, resources efficiency perspective.
So John, as we turn to 2023, it’s gonna be an interesting year. So we’re seeing high inflation, a potential recession, which I think everybody keeps debating what it is. We’ll leave that debate elsewhere. But as we enter these environments, it typically drives companies to be much more focused on cost controls and many other things. Frankly, in your in terms of operational excellence, what are your priorities? When you look at 2023, what are your priorities and Huber’s priorities, as we go into the year?
There’s no doubt that, whether it’s a recession or some other economic slowdown, it’s hard to predict, and no one can predict it. Certainly, a large part of the world is anticipating some form of a bit of a storm out in front of us. So with all that in mind, it’s very common in operational excellence to start to shift your strategy or your focus areas away from maybe additional capacity and move on to pure cost reduction, and trying to understand what that could be. Of course, we’re experiencing, as everyone is, amazing levels of inflation. So cost reduction is a huge piece of the puzzle simply because our costs are changing on a daily basis.
So as we go into the future, have a stronger emphasis in that area, as any company would, especially throughout the chemical industry. That’s a very big part of it. Sustainability is also a huge piece of the puzzle, and that is connected to cost reductions because we’re finding our energy sources, which are going up in price. We want to have a smaller footprint. For all the reasons possible, we want to make sure that we’re working on that. The other piece that I think is a part of operational excellence and that is a huge priority for the future is the further use of digitization.I don't think anything can replace this face-to-face interaction, and being able to have a good conversation, challenge each other, debate each other, and be able to do it in person. You can't beat that with Zoom. Click To Tweet
We’re making sure that we’re using the right kind of tools and technologies in the best way we can. And I see that in a very strong way for our future. The digitization part is a big piece of our future without any doubt. Finally, I would say in the innovation area, what I’m learning about the most is the need for a very strong customer connection in the world of innovation and really understanding what is it that they want. Not down to the individual product that they want, but what kind of properties are they looking for. What kind of attributes are they looking for in anything from the customer experience to the product they deliver to the way that we ship it to them and how they receive it?
It’s interesting. John, thank you for joining us today. I’ve really enjoyed learning more about you, your experience, and Huber and how you guys are tackling today’s challenges.
Fantastic! It’s been great to join in. I really appreciate the time.
Thanks, everyone for listening. We will be back again next week with another episode.
About John Yagel:
John is a global executive with demonstrated success in the chemicals and materials industry. He has been implementing operational excellence for over 30 years and has a strong passion for improving performance in operations. His knowledge base includes productivity, capital investments, asset utilization, engineering, reliability, quality, and industrial control systems. Currently, John leads the continuous improvement, capital implementation, and innovation excellence for Huber Engineered Materials. John received his BS in Chemical Engineering from Penn State University.
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