“The SLS is a strategic partner for EGGER”
In dialogue with EGGER
For 20 years the EGGER Group has been one of Siempelkamp's customers and has been cooperating intensively with the SLS. Lisa Noheimer, Dirk Brauburger, and Armin Lingen talked to Will Masterton, Purchasing Manager EGGER UK Ltd, and Christian Nothdurfter, Head of Technical and General Purchasing at FRITZ EGGER GmbH & Co. OG, St. Johann, Austria, about how this cooperation has developed and what advantages both companies have from it.
How would you describe the positioning of the EGGER Group in the wood-based materials industry?
Christian Nothdurfter: “At the EGGER Group, I am, after all, part of the technical purchasing department and thus part of the supply chain. And from this perspective, I see us in a very well position in the manufacturing industry in general, especially when it comes to process quality. I am convinced that we exploit synergies on a high level. Process automation plays a decisive role here. How can processes that were previously carried out manually be automated in such a way that on the one hand we have more resources available for strategic issues, but on the other hand process quality is ensured? We analyze this in our operating business. The first step toward achieving this goal is optimally maintained and centralized master data, coordinated with our suppliers. The second is clear processes. And then you can talk about how to automate to generate resources.”
Will Masterton: “Over the last 5 years, our team has focused on strategic decisions, such as identifying the strongest suppliers or the most important product groups. In that time, we've made significant progress in automation. This gives our team the time to do value-added work rather than time consuming administration.”
EGGER is the top key account of the SLS. The SLS is a full-service provider for spare parts, modernizations, field service and Industrial IT. How do you rate the cooperation?
Will Masterton: “Very good, best practice. We have been working together for 20 years. In that time, we have regularly reviewed the SLS's service, stocking, etc. The handling is first class. We have continuously changed and improved the way we work with Siempelkamp. The SLS has proactively supported us in this process. The basis of this is a service level agreement which defines various targets. Last year, for example, we achieved 90% delivery punctuality. This gives us the confidence to plan maintenance because we know that the parts we need will be on site on time. The SLS IT system has also evolved; it meets our requirements much better today than it did at the beginning.”
Christian Nothdurfter: “Our journey together started about 10 years ago with a clear goal that I was not sure would be achieved in the beginning. Namely, to turn Siempelkamp from an OEM parts seller into a total seller. At that time Siempelkamp was not yet in a position to fulfill this. Then the SLS was founded. We worked together in this approach in a very concentrated way and the structures of SLS also grew within this period, as did IT systems and responsibilities. And now we have reached a status with which we are very satisfied. The SLS has become a strategic partner for EGGER. This starts with the measurement of our KPIs, which the SLS makes possible. So we can measure our success. You don't often find that in the engineering industry. Instead, the focus is on aftersales business and, of course, equipment sales. But we have found that the business model with the SLS as a wholesaler is beneficial for both sides. ”
And that is also the big plus of the SLS: that it makes things possible and develops itself further.Will Masterton, EGGER UK
Will Masterton: “With the SLS, Siempelkamp separated the spare parts business from manufacturing and made it independent. The focus was placed on customer service. This did not exist in this form before. They accepted the challenge and paved the way for our cooperation. And that is also the big plus of the SLS: that it makes things possible and develops itself further.”
What distinguishes the SLS spare parts service from your point of view? What perhaps even sets it apart from the competition?
Will Masterton: “I think your approach of focusing on customer service and spare parts supply is certainly best practice. One example is response times. We have those in the service level agreement. The target is five business days. These five days are very important for the EGGER purchasing team and the planning process because, in turn, it allows our team to provide answers to internal inquiries, especially with regard to the maintenance and repair of our plants. They also recognized that investment in stocking is a key factor. Spares have to be available when they are needed. The SLS has recognized that as well.”
Christian Nothdurfter: “I don't have much to add. We tender things together, we procure things together with you. I can't think of anything that the SLS doesn't cover.”
EGGER and the SLS introduced EDI in 2020 as part of a process optimization. By linking the two ERP systems, orders are processed digitally, from ordering to invoicing. Can you say in figures what results this has brought?
Will Masterton: “To give you a figure: Siempelkamp orders account for about 2% of the orders we place. 2% doesn't sound like much. But in fact they mean thousands of order items. And we know that the SLS processes these orders accurately. That allows us to focus on other things.”
Christian Nothdurfter: “If we were to process every order the way we did 20 years ago, it would tie up a lot of capacity. In the past, we had to concentrate on every order and every position from start to finish. Today, we can concentrate the business on a few people, our purchasing specialists, and we still have to check perhaps one order out of a hundred. This in turn gives us resources to further develop our own strategic and tactical purchasing. However, it is not only EDI that has made this possible, but the entire automation process. EDI is the icing on the cake. At the end of the day, it has created a win-win situation for EGGER and the SLS, because it has replaced a system that was also more costly for the SLS to maintain. Now things are round.”
How will the purchasing and delivery process for standard spare parts develop or change in the future? With reference to the wood-based materials industry: Will there be new technologies that will be used? Where do you see further optimization potential, also at the SLS?
Christian Nothdurfter: “First of all, in the B2B sector, other companies have to catch up with the progressive companies. There is still a lot to do there in the next few years, in the industry in general. But even when automation is at the level we've reached, I don't think there will be any fundamental technical changes to processes in the near future in terms of interaction with suppliers. When I think about decision-making processes, strategic processes or compliance, AI will definitely be helpful in the future. So there is potential for further automation. But in direct B2B, we have already reached a very high level. Maybe the last 5% here will be so expensive that we don't have a direct benefit from that.”
Will Masterton: “We have managed the connection between EGGER and the SLS very well. But that is only one part of the chain. SLS also has to constantly look at the links with its own suppliers and improve them to ensure that stock is available to meet our requirements.”
I think that the companies that will be really successful in the future will be those that work together to cover the entire supply chain and end-to-end digital processes.Christian Nothdurfter, FRITZ EGGER GmbH & Co. OG
How do you see the joint future of EGGER and the SLS?
Christian Nothdurfter: “The SLS is in line with our mission statement: We want to work with competitive suppliers on cost-optimized and modern processes and ensure sustainability in the supply chain. That is covered by you. The SLS has helped us to optimize processes. It offers competitive prices. And it is willing to continuously improve itself. So you will be able to be an important partner for us in the future.”
Will Masterton: “You have already identified EGGER as an important customer, and both parties will benefit in the future. Christian mentioned the EGGER Group's mission statement. This applies equally to us and to our suppliers and represents what we expect from you in the future. The first is innovation. We expect innovative machines and technologies to drive the EGGER Group forward. And we expect innovative service, also with a view to the downstream supply chains. In addition, international presence is very important. This allows the SLS to support all our sites around the world, which are growing in number. We have integrated our sales and ordering processes and optimised our IT systems together; here, there is potential to integrate technical support further, to optimise this partnership in the future.”
Christian Nothdurfter: “I think that the companies that will be really successful in the future will be those that work together to cover the entire supply chain and end-to-end digital processes. That should be the medium- to long-term goal. In the future, we want to work with truly end-to-end automated processes, not only between EGGER and the SLS, but also between your suppliers and EGGER, i.e. along the entire supply chain. High-end processes as the supreme discipline and goal for both of us.”
Photos: Will Masterton (EGGER Hexham) with Lisa Noheimer and Dirk Brauburger (SLS Bad Kreuznach), joined by Christian Nothdurfter (EGGER St. Johann) and Armin Lingen (SLS Krefeld)