Exclusive: Kiessling on Heidelberg's Dedicated ServicesOctober 1, 2010
At IPEX earlier this year, Heidelberger Druckmaschinen announced that its entire service portfolio had been combined into a dedicated division, led by Marcel Kiessling, member of the management board responsible for Heidelberg Services. These now include Technical Services, as well as its new Performance Services offerings. In an exclusive interview, Kiessling explains how Heidelberg aims to help its customers be more successful overall in the long-term.
Printing Impressions: Why did Heidelberg combine its services portfolio into a dedicated division?
Marcel Kiessling: We want to reflect changes in the marketplace that we have been observing for quite a while. That's the short answer. The long answer is that we talk to many printers, and see that our customers are facing challenges in several different areas. As examples, pricing and margin pressures due to rising raw material and personnel costs. They have to position themselves for the Internet 2.0 and Web-to-print. They have to consider sustainability and green printing. The question of differentiation in the marketplace is also on the table.
Our mission is to support our customers to be competitive and successful long-term. When we looked at those challenges and the success criteria—what defines success for a printer, we came up with some areas which are well known, but still important to keep in mind.
The first success criteria, and to us the foundation for success, is having the right technology. Having the right technology gives you a certain level of productivity, a certain reliability and quality level. Second, is the need to keep this technology up and running, 24/7, 365 days a year. The pressure on uptime and availability is increasing because machines have become more productive and printers tend to have fewer machines in operation than in the past. That means every machine has to be up and running in order to get the work out. A press like an XL 105 typically runs in a multi-shift operation. So the pressure on uptime, around the clock, is higher.
Equally important is to be lean in terms of material consumption—to bring material consumption down to the lowest possible level to optimize processes throughout the operation, not only in production but also in administration. Having the right sales and marketing strategy is clearly an important success factor, as well. So is having qualified employees. All together, these factors define success for a print shop. And we want to support printers by addressing all of those success factors in the right way.
Besides the technology, equipment and technical services...we have defined a new category of services called Performance Services, where we address all of those other criteria. Together—Technical Services and Performance Services—comprise the new Heidelberg Service division and the various offerings coming out of that.
PI: Talk a little bit about what each of those services are and how they differ.
Kiessling: Technical Services are the Systemservice offerings we have today, which basically covers four different areas. You have the technical service; somebody has an issue, and the service technician goes there and fixes the problem. We have our service contracts, our Systemservice36plus offering, all the partner programs. Number three is all of our remote services, where we believe we have a very strong and powerful backbone. Number four is the spare parts availability around the world within a given time window. Those four areas make up Technical Services, and we believe we are well-positioned there. We have more than 4,000 service technicians in the field worldwide, so we have the biggest service organization in the industry. The remote service backbone we're using is Web-based, so we feel we have a very strong platform there to base our remote services. On the parts side, we have facilities worldwide to assure spare parts availability the very next day.
Although we believe that we are already working at a very high level, we have to strive for continuous improvement. We believe that, for the success of a print shop, it won't be sufficient in the long-term to provide them with the best technology and to make sure that the technology is running. We plan to focus more and more on these Performance Services in the future. Performance Services address everything that helps to improve the overall performance of a print shop, in a very broad sense. So not only the production area or the printing area, but in a very broad sense.
Let me stress four areas in terms of what Performance Services mean. First, certainly is any service supporting productivity optimization, productivity improvement. Getting more out of the existing equipment or the current setup of the company. This may have to do with people, the machine itself or with other issues within a company. So, basically everything around overall productivity. Second—and I'd rather keep it separate, even though they overlap—everything to do with process improvement or process optimization. Lean manufacturing in the printing industry, which is not only limited to production, but also includes the administrative areas. When we talk with customers now, they say they want help focusing on lean manufacturing and process improvement. That can range from a business consulting project, where we help to identify weaknesses in the material flow or the processes around a printing press, up to and including a full Prinect integration project where we automate their processes.
The third area Performance Services addresses is marketing, sales and strategy. We offer many seminars at the Print Media Academy (PMA). And, on the consulting side, for example, we provide an audit that helps printers identify weaknesses on the marketing side. We can also help them analyze profitability of jobs and customers to target where to put the emphasis in the future.
The fourth area centers around the qualifications, training and education of people in the print shop, starting with the owner or the president. When it comes to management, up to and including the machine operator, to help a shop get the most of each machine. All of our consulting, PMA, Systemservice, Prinect, CTP, remarketed equipment and consumables offerings contribute to the Performance Services.
PI: Does moving into these new services require your consultants, analysts and salespeople to possess new skill sets? How are you developing that expertise within your own company in terms of providing those additional services?
Kiessling: That's a very good question and one of the key issues I am focusing on, which is developing the right skill sets. We want to be the best partner of our customers. To do that, we have to understand their businesses better than anybody else in the industry. In that sense, it's important that every one of us, and specifically Heidelberg employees handling customer contact—be it a service technician, an applications specialist, a salesperson, or back office people working in the service area—has to have a basic understanding of how a print shop works.
They need to have a basic understanding of P&L, and what cost positions have to be influenced in a positive way in order to support the overall profitability and success of that print shop. I want the service technician who is working on a machine in a pressroom to notice any process issues, bottlenecks or other things/weaknesses going on around him in that print shop, and to point that out to the head of operations or the owner of that company. And, together with the experts we have in the company, make a proposal on how to improve the situation. That means that all of our people require a basic understanding of how a print shop works. I realize that this is a major undertaking, so we have to commit the money and resources in order to develop those skills.
PI: How are these additional services being offered in the United States from a pricing standpoint?
Kiessling: That depends on what services we are talking about. In terms of Performance Services, there first has to be a performance analysis or performance check to target the bottlenecks and process breaks. We try to do those performance checks in a very fast and standardized way to give printers a status quo of where they stand today. Based on that, it depends on the scope and depth of the project, and who is involved. Is it a business consultant or is it a technical specialist?
That's very important. There has to be value for the printer involved. If he doesn't see the value of those services and their contribution to performance improvement in his print shop, he won't be willing to pay the appropriate price for that service. That's why it's very straight forward. There are certain costs involved with those services, but if there's a value and performance improvement, I'm confident that we will successfully compete in the marketplace with those services.
PI: As you are aware, there was the recent partnership announcement between Heidelberg and Unisource regarding consumables. How will that benefit Heidelberg customers from a service standpoint?
Kiessling: It will benefit customers by reducing the number of contacts they have to deal with. In this current economy, and going forward, printers need every advantage, which is why Heidelberg and Unisource joined forces and created Printers Advantage. Here you will be able to get all your consumables, paper and technical support delivered through one simple and convenient source. This will translate into increased productivity through greater efficiencies in the way you work and increased profitability.
PI: From what you're saying, it seems that Heidelberg is evolving from being primarily an equipment manufacturer to more of a service, distribution and business process-oriented company. Is that a fair statement?
Kiessling: Yes and no. To make it very clear, we still believe that a print shop needs the right technology in order to be successful. That was the case in the past and will be the case in the future. We will remain focused on developing innovative solutions that give our customers an edge over the competition. We will continue to allocate 5 percent of our sales on R&D in the future, in order to come up with those innovative solutions. We will not neglect that in any way; that's the basis of everything we do.
But, we also believe there is more needed and required from printers in the future to be more successful. And those are the other areas we are focusing on, with Performance Services and Technical Services. When somebody bought a printing press in the past, the strength of our Technical Services was an important criteria. That hasn't changed. But, in addition, we want to focus more in the future on Performance Services that support improvements in their overall performance. I'm not aware of any industry supplier doing that with the same consequence as we are doing that right now.