From Switzerland to Hong Kong

From the mountains of Switzerland to the South China Sea: At our Hong Kong location, an international, cross-functional team came together to improve the production processes there. Climbing metal leasing rates and increasing competition have the precious metals market in Asia, especially, on the move. Those who want to succeed in this environment must continually evaluate their processes and methods. It’s great to be able to benefit from a new Group member’s many years of experience.

It is often said that Hong Kong was founded for trade. As one of the most important economic centers in Asia, the Special Administrative Region on China’s southern coast is a significant location for Heraeus’s precious metals business. Heraeus supports clients throughout the continent from Hong Kong—and has done so for 45 years. But tradition does not protect against innovation. “We want to get better all the time,” says Bertha Cheung, Head of Operations at the Heraeus Precious Metals factory in Fanling, east of Hong Kong. “We do this by focusing on lean production, environmental protection, and occupational health and safety, as well as cost efficiency.”

Some time ago, Heraeus created the Supply Chain Excellence team to support its production sites worldwide. About 15 employees work to improve processes, stimulate the transfer of knowledge and technology, and thereby advance the growth of Heraeus. “We network expertise within the Group,” says Alexander Kaufmann, Head of Excellence Controlling, who has led modules in many regions globally and across different business areas in the past two years.

In spring 2018, he flew to Hong Kong as leader of a Supply Chain Excellence module. The purpose of the 12-week visit was to analyze the existing situation, develop an implementation plan, and launch initial pilot projects. The main goal for the module was to boost production output and reduce costs.

The Fanling site has some special challenges: Space is extremely expensive there, so the production lines are distributed among several floors. "Therefore, some simple relocations of equipment resulted directly in optimized flows of material,” Kaufmann explains. Also, wherever possible the team introduced IT systems to replace paper-based processes. For example, this simplified and speeded up delivery for customers.

But even the process of precious metal production itself offered room for optimization. For technical expertise, the Supply Chain Excellence team under Alexander Kaufmann summoned support from faraway Ticino to Hong Kong. After all, gold processing is also the core business of the Swiss company Argor-Heraeus, which has been fully owned by the Group since 2017. “Our processes are very similar,” says Simone Frigerio, production manager for Argor- Heraeus in Mendrisio. “So we found it easy to identify technological approaches that make production more efficient—such as the electrolysis method for refining gold, which we already use.” The lessons already learned by Argor-Heraeus are primarily saving time for their colleagues in Hong Kong: Rather than taking the risks often associated with the introduction of new technologies, they can rely on established solutions. For example, a new gold electrolysis unit, equivalent to the one operating in Mendrisio, was built and transported to the Fanling building. The new device will already go into operation in 2019—under technical guidance from the Argor-Heraeus colleagues.

The measures taken under this module aim to reduce costs such as the usage of chemicals and precious metals financing and increase daily throughput of refined metal. In addition to the economic benefits, however, the people involved in the project consider it a success mainly because of the teamwork involved—site-wide, across business units and internationally. “Argor-Heraeus serves as a role model and as the market standard for gold and silver processing,” says Bertha Cheung. “We benefit from the company’s comprehensive expertise.”

Simone Frigerio also views the joint project as a plus for his colleagues in Mendrisio. “They are happy to share their knowledge—and their external perspective has also helped us to reevaluate our routines,” he says. He notes that the interaction with colleagues in Hong Kong has reinforced their sense of belonging to Heraeus. “We are proud of our Swiss heritage— but we are equally proud to be part of a strong and international Group.”