Transparency for efficient risk identification and management

Industry: Chemical industry
Company size: 19,200 employees
Requirements: Mapping and expansion of the previous logic in a central risk management software, creation of evaluation options, implementation of risk management processes, extended simulation options
Users: Over 300 users
Project category: antares RiMIS® Software Solution for Risk & Opportunity Management

LANXESS is a leading specialty chemicals group that achieved sales of EUR 9.7 billion in 2017 and currently employs around 19,200 people in 25 countries. The company is currently present at 74 production sites worldwide. LANXESS's core business is the development, manufacture and sale of chemical intermediates, additives, specialty chemicals and plastics. With ARLANXEO, a joint venture with Saudi Aramco, LANXESS is also a leading supplier of synthetic rubber. LANXESS is a member of the leading sustainability indices Dow Jones Sustainability Index (DJSI World and Europe) and FTSE4Good.

A central risk management software was needed to support the risk management process in the LANXESS Group. The new risk management software was to replace the Excel templates for recording opportunities and risks, offer a workflow for forwarding and approving opportunities & risks, enable aggregation by means of a Monte Carlo simulation and largely automated reporting of opportunities & risks. In addition, the new risk management software should offer helpful analysis options for risk control. One of the important requirements was also the link to corporate planning. The user should be able to enter planned figures per unit and period and to evaluate the deviation from the planning before and after the risk simulation.

With the established opportunity and risk management software antares RiMIS®, LANXESS was able to build on a solution that creates full transparency about the company-wide risk situation. The detailed requirements profile was developed via workshops and the implementation phases were coordinated. The customising module known from antares RiMIS® allowed all new requirements to be transferred to the standard of the antares software application via parameter controls. Thus, even changes during the ongoing project phase could still be considered and implemented. Pragmatism through flexibility was one of the many outstanding project characteristics of both partners. The project was supervised by an external mathematician in addition to the antares consultants. Thus, all requirements could be solved competently and directly.

The introduction of antares RiMIS® has optimised and automated the internal, group-wide risk reporting and approval process at LANXESS. The previous Excel-based method was replaced. The new software created more transparency and security in the diverse processes of the business units. Another advantage that LANXESS now benefits from is the newly developed authorisation concept. The Cologne-based company attaches great importance to security and data protection. Each business unit and each user only sees the data that is relevant to them and belongs to them. Another important aspect at LANXESS is possible reputational damage, which can now be prioritised accordingly in the application and provided with adequate countermeasures.

An integrated, R-based Monte Carlo simulation is used to aggregate existing opportunities and risks. The stochastic method is used at the corporate headquarters to analyse the effects of possible combination effects of various risks by means of probability distributions and to determine the overall scope of risk.