Hello everyone and welcome to a new episode of we.talk. This time we’re speaking to you from the thyssenkrupp quarter, Q1 to be precise. And of course I’m not alone, I’ve been joined by a special guest: Martin Stillger, Chairman of the Board of Materials Services. And as we’ve known each other for some time, we’ve decided to stay on first-name terms. So Martin, good to have you here, I’m pleased to see you!

Hello Stefan, thank you for inviting me.

Martin, Materials Services is one of the biggest segments of thyssenkrupp alongside Steel. What does thyssenkrupp Materials Services do exactly? Does the size of the segment make you feel in some way particularly responsible for the success of the transformation process at thyssenkrupp?

Yes of course that’s true. Materials Services is a segment with 16,000 employees and sales of around ten billion euros. Our core business is actually materials distribution. We distribute carbon and stainless steel, plastics, but also raw materials such as coking coal, and we’re the leading materials distributor and service provider in the western hemisphere. We’re proud of what we are. On the other hand of course it’s also a responsibility we have to meet. The important thing, and what many colleagues don’t know, is that we are mill-independent. That means we purchase less than 10 percent of our material from thyssenkrupp Steel. We’re a good business partner, I think, to Steel, but in terms of our global business it’s less than 10 percent. So we’re mill-independent and that’s how we position ourselves in the market.

If my information is correct, Materials Services has two hundred fifty thousand customers – that sounds like a lot. Looking ahead, what do customers of a segment like Materials Services expect in the future?

We’re actually a classic materials distributor. We sell materials to our customers. Over the years we’ve also developed more and more services. Today our customers concentrate on having a reliable supply chain, all the way up to the question “Can you manage my supply chain as well? What would you do differently to make my supply position more secure?” And we have to take our business in these new directions, to serve our customers in the best possible way. The strategy behind this is called Materials as a Service. This is actually about the standard part of our business, the age-old typical business of a materials distributor. This has to be standardized, automated, digitized. And on the other hand there are also new services and new business ideas we discuss with our customers. And with this we are also in principle simply addressing a new share of the market, new market segments. And altogether the whole thing is taking our business in a new direction.


It’s on record that when you first took up post you said you’d like the transformation to really reach into every corner of the organization. As things stand today, looking back, has that been successful? Has it really taken hold everywhere or is there still need for action here and there?

Well, I hope we’ve achieved quite a bit, but of course there is always room for improvement. We are in a transformation process, which we have now established. I just talked about Materials as a Service and explained how the business is changing, how customer needs are changing, and how we have to respond to this. What’s interesting is that we didn't previously have a real innovation process, like someone who sells a product. So we introduced an innovation process, and made it decentralized: The Board provides a certain budget and the businesses and the corporate functions decide, without the Board, which innovation ideas are promoted and how. And of course that’s a motor, of decentralized responsibility and innovation projects, and it’s coming on very well. We started with agile working, that’s also an important component. Agile working sounds a bit like laissez-faire, but it’s not. It’s a very focused, structured process with a high degree of transparency and a high degree of self-determination on the part of employees. Also how they shape it, how it works. We’ve made significant progress there as well. To ensure that change reaches every corner of the company, we did the following: After we had a management conference, we went and made the content of the management conference available in specific sections, in German and in English. And people who were interested received an offer and were able to get involved directly and say ‘I’d like to listen to the following topics.’ So people are not dependent on information provided by somebody or other, they can inform themselves, and there has been a lot of discussion, which I think is a very clear change that we’ve made. But I repeat, there is still a lot to do, we are not done yet.

Speaking of “improving”: Of course, people should always start with themselves, you’ve said that quite clearly. But looking at the Group of Companies, what would you perhaps wish for or expect? Where could there still be support, assistance, so that Materials Services can really achieve its goals?

We have an incredibly strong brand and that’s an asset, it’s also an asset in our business. We operate in 40 countries around the world and I’d say in one country people have a critical attitude towards the brand, and that’s in Germany. In the 39 others, not at all, and every competitor would die to have such a strong brand. It stands for reliability, for competence, for fulfillment, and that really is a valuable asset that we have to cultivate. We also have to cultivate it by going out and making sure, everyone making sure that more money goes into our purse than goes out. And that’s a task that faces us now, that we have to prove and that we have to deliver. And that’s what will take the brand forward in Germany, too, and also take our business forward again.

What is the significance of the major topics of sustainability, innovation and digitization in this context? This is not just an MX-specific thing, but you’re now speaking for MX in this context. What do you have to say on this?

The number of inquiries about what sustainability actually is and how it works has risen incredibly in the past few months. I have been surprised by the way things have changed, by how many customers are talking to us about what contributions we should be making, what contributions we can make. It’s really remarkable, and it’s not just about green products, it’s also about supply chains and logistics. How can I improve? So “green” is a major topic. But there’s also a social aspect, namely what we do as a member of our community. So we launched a fundraising campaign across all our countries to collect donations in kind for children’s homes, which was very well received in the company. And as I said, through digitization we ultimately also deliver concrete examples of effects we achieve when, for example, we use artificial intelligence to optimize routes which allows us to reduce the number of truck routes, save fuel and in this way make the supply chain greener than before.

Digitization is not an end in itself, I get that. And of course that raises the question: can thyssenkrupp also earn money through digitization?

Yes, we most definitely can. We can definitely earn money by using digital solutions to provide additional services and additional solutions for customers – by providing a service, getting paid for it and thus earning money. Another aspect is the effects we can achieve by using digital tools. I’ll give you an example: I can supply the same amount of material to a customer, but by managing the process with a digital tool and using artificial intelligence I need far less warehouse space. So I achieve the same sales while reducing warehousing costs and thus ultimately add value and contribute to earnings. On the other hand we have completely new requirements. I was just talking about supply chains, customers who are talking to us about how we can solve their problems in a different way to before. Solving these problems and developing products on this basis and generating higher sales and earnings is the second thing we are aiming for. And we believe that as we find more solutions for our customers and tell our regular customers about the possibilities we can offer and what we are doing for others, we will transform the business as a whole. And as we see it digitization is not, let’s say, applying a new coat of paint to an old car body, with us digitization is under the hood.

So many changes are driven by external requirements, but many are also developed in-house. It’s generally the case that changes also result in new framework conditions, including for employees. How do you see that with regard to the mood at thyssenkrupp in general and at Materials Services in particular? What’s the feeling?

Changes and the pace of change are increasing, that’s just the way it is. And I don’t think we can stop it or influence it. What is really important is how we deal with change. It has to be well communicated and well explained. Change is happening on the one hand, but we also have to give people the opportunity to develop themselves further. We have made a large number of offers providing lots of training courses for our employees, including online courses that they can take part in from their own living room. And the courses are designed to support these change processes. Last year we then also started with the Pulse Check. But it’s not just about some nominal value, something achieved, in the fall we will be launching a second round and then we want to measure the changes and see what our employees have to tell us. Have things got better or worse? There’s a lot to do. How much have we achieved? Quite a lot, I hope. Definitely not everything, that’s not so easy, but let’s say the easy jobs are already being done, and anyone can do easy jobs. But we’re not just anyone, we’re thyssenkrupp.

That’s a good way to close, Martin. Thank you for taking the time to join us. Thanks also to all of you for watching. I hope we managed to capture your interest again today. We look forward to returning with new guests and fascinating topics. All the best from Essen. Bye, stay safe, see you again soon.

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