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Company in transformation

27.07.2020 I Katharina Nordmeyer

What is changing at thyssenkrupp Materials Services - and for what reason? Chief Transformation Officer Ilse Henne discusses the opportunities presented by change in an interview.

As Chief Transformation Officer of Materials Services, Ilse Henne sets the pace and direction of the strategic change. In this interview she talks about change and growth at the largest materials trader and service provider in the western world.

thyssenkrupp Materials Services is currently reorganizing itself. How do you explain what’s going on?

We have our origins in the classic trading business with materials. This has always included a service component and we are now expanding it and linking it closely with our core business. We call this future model Materials as a Service or MaaS for short. We are not just concerned with the supply of materials, but with all the other services that customers may need: the logistical management of inventories and the supply chain or a specific processing of products.

The change is taking place on three levels: The first is the transformation of our organization. We need to co-operate differently in order to become faster and more flexible. The second level concerns raw materials. We must always keep an eye on the service component in materials trading. Thirdly, digitization is an engine of change. Without IT, there is actually no business anymore. It offers us many opportunities to design our solutions differently and thus also to reach more customers.

Why is this change necessary?

Traditional trading in materials still makes up our core business. Our great strength is our broad presence and long relationships with many of our customers. We do not want to move away from this. Nevertheless, we have to change, because the environment in which we operate is also changing.

For example, our customers in the manufacturing industry used to decide for themselves which products they would bring to market. Today, however, the trade often tells them which products they want. This change from push to pull means that manufacturers – and consequently we as well – can no longer plan in the long term when which materials will be needed.

These customers approach us and ask: How can we manage this together? In the end, we not only supply the material, but also the service and IT solutions. We find out how and when we can best provide the material to our customers.

We also want to help shape the sustainable use of resources. For example, we can ensure that we transport the right material in the right quantity via the shortest route. Digital solutions for the supply chain then help to prevent unnecessary CO2 emissions.

Company in transformation

What will Materials Services look like at the end of the transformation?

I don’t think we should focus too much on a final goal. There is probably no such thing. Customers’ needs will always change and we will always adapt to them. That’s what we have been doing for the past 100 years. ‘Materials as a Service’ refers to the process rather than the goal. We want to listen to our customers and react flexibly. And we will be able to do that because we are now developing tools and solutions for the challenges ahead.

Most customers currently have the same questions: How can I improve my quality? How do I deal with the change in predictability? Where can I develop smart partnerships in the supply chain? Where should I digitize? Our task is to find good and ever better answers to these questions. But it is also clear that we still have a long way to go.

How do employees react to the change?

There are people who are eager to do different things or do things differently. We can count on a great many of these pioneers. Then there are those who take a look at it first. Or those who signal that they do not feel like making certain changes. I respect these reactions and consider them all important.

Well-founded resistance is also a sign of intelligence, because to do this you first have to understand the full implications of change. So, in order to convince, I have to explain conclusively how change will secure our business model in the long term.

Most of the time, however, I meet people who are very open to transformation. And I really mean this across the organization, across all age groups. Many of these employees work closely with customers and know that a lot has changed there. Then it is easier to accept the change in their own tasks.

What are the next steps?

We will continue to integrate the materials trading and services business and take a close look at how we perform. If our profitability rises in certain service areas, it is proof that we have succeeded in the transformation here.

It remains important to listen to our customers. One thing that must not happen to us is that we start building new solutions or IT tools and forget for whom we are actually building them. In this context, we would like to create more room for agile working in the organization.