08 March 2017
Jungheinrich UK MD Jan Lorenz talks to HSS Editor Simon Duddy about changing trends in intralogistics solutions in the UK and how the manufacturer is gearing itself to best serve end users.
It is an interesting moment for UK business and the intralogistics market. We may look back in years to come and see this time as pivotal. The UK will, over the next few years, remove itself from the European Union, while the intralogistics market could be at the beginning of a major technological revolution with greater automation and much more pervasive use of IT on the horizon. At the same time, the seemingly inexorable rise of eCommerce continues to re-shape the pattern of logistics across the nation.
On the cusp of so much change, it was therefore fascinating to have the chance to sit down with Jan Lorenz, UK MD of Jungheinrich – one of the world’s major suppliers of forklifts and intralogistics solutions.
In the short term, the market is dominated by the uncertainty caused by Brexit.
Jan explains: “Post Brexit, the UK market for forklifts has been more robust than we initially thought, but we have to monitor trends very closely. None of our customers have stopped a project because of Brexit yet, but depending on which customer you talk to, they have different investment horizons and different takes on Brexit.
“Some companies are investing on a year-to-year basis, others, for example, the pharmaceuticals industry, have 7-10 year investment plans. The more long-term customers are reviewing where and what to invest, they want to have clarity from the Government to safeguard their investments.
“Given the robust market, we expect the market volume 2017 to be stable, despite Brexit. However, the deviation in the pound/euro exchange rate influences everyone’s buying decision because, like the majority of our competitors, we buy our equipment from Europe.”
The forklift industry is seeing consolidation of suppliers and Jan predicts this trend will continue but insists Jungheinrich wants to stay independent. As a company that is family owned, Jungheinrich always took a long term view.
“The big picture for forklifts is a high price pressure with some of the truck segments becoming more and more of a commodity. Yes, we have great USPs, especially around energy efficiency, safety and total cost of ownership, but what really sells the trucks and ensures high customer retention is the solution and service offering behind it,” Jan explains. “The core element of our strategy besides profitable growth is to add value and remain the most customer centric solutions provider, so understanding the customer’s business model, quickly reacting to market trends and individual customer demands, is key to retention and winning new deals.”
The tight market in forklifts is replicated in grocery retail, where supermarkets are fighting for market share. This is a sector where Jungheinrich enjoys the market leading position.
Jan says: “Overall, the market volume retail industry has grown by over 9% year on year since 2012 and we are in a positive position, because we can demonstrate ongoing cost savings for the operation of their vast fleets. Just to give you an example, Jungheinrich UK introduced the “2 Shift 1 Charge” guarantee at the end of 2015. This is not a loose promise; it ensures that, if our truck is not able to get through 2 full shifts / 16 hours with one battery, Jungheinrich will offer a second battery for free. Jungheinrich is the only forklift truck manufacturer to offer this and, since the introduction of the “2 Shift 1 Charge” guarantee, we have not had to send a second battery out to participating customers. This is one of the many reasons why the majority of these customers are working with us.”
So what is Jungheinrich’s response to this evolving landscape?
As you might expect it is both detailed and wide-ranging.
One element is the supplier looking to broaden its touchpoints with the market.
In April 2017, Jungheinrich will launch a UK Webshop with more than 2,500 articles, not just featuring products from Jungheinrich but from a range of carefully selected suppliers as well.
This will deliver forklifts and other intralogistics items at short lead times, and is supported by a fully-fledged logistics process.
This is based on the Jungheinrich Profishop, which started in Germany in 2008 and has since been rolled out to a number of other European markets. “We are focusing on creating a multi-channel sales and marketing approach, working on all the touch points - direct, through partners, online, telemarketing, everything.
“The idea is to reduce any remaining gaps in our UK market coverage and to have an excellent door opener, we want to give 24/7 access to the buying and searching parameters of our customers. If decision makers want to search for our products at 9pm, they can check the webpage and order right away with just 3 clicks. If they need additional information they can call our in-house telesales team or we can send out one of our Area Sales Managers the next day. We want to make it as easy as possible to interact and to do business with us, how customers want to, through their channel of choice.
“Our first introduction to a customer may be to provide safety shoes or roll cages and we will seek to build that relationship.”
Jungheinrich was known in the past for direct sales, but has also been developing a partner network of dealers. It has 13 partners on board in the UK, and is recruiting others. This has helped to increase the market penetration in industry segments and regions where it has been under-represented in the past.
Investing in the future
A key part to supporting Jungheinrich’s growth plan is staff investment and being the employer of choice. With training academies for engineers, the manufacturer has 50 apprentices on board in the UK at the moment.
In addition, Jungheinrich founded a UK sales academy two years ago, with the aim of bringing new people to the market to be educated the Jungheinrich way. The first phase featured 7 individuals and it is anticipated the next phases, recruiting in April and September, will increase that to 16 in 2017.
“We are hiring ambitious graduates fresh from Universities who have never worked in the forklift industry before, and this has been very successful for us since we on-boarded the first group in late 2015. The first phase have been trained intensively in all departments of Jungheinrich UK so we can ensure that they are well adverse with the benefits of the Jungheinrich business model. All 7 are working now in regional accounts and the next intake may be used in all sectors of the business,” explains Jan.
“We have also taken on two UK postgraduates who will be co-educated with our post-graduate program in our HQ in Germany, where we have been regularly honoured as TOP-Employer, and they will go through the same great process I went through when I joined the company 14 years ago.”
Emphasising the range of Jungheinrich’s offering, Jan touched on the trend towards automation and the company’s role as provider of intralogistics solutions and general contractor for major warehousing projects.
“We are very happy to have our own, 30 people strong division for this complex process in the UK. Many competitors still work with 3rd party providers, but at Jungheinrich customers receive a true “one stop shopping” experience, where everything included comes from our production. Jungheinrich Systems and Projects offer a complete end-to-end solution, including conceptual design and planning, project management, turnkey implementation and worldwide after-sales support. We have been supplying integrated and automated systems for more than 30 years and are now one of the largest automation providers globally. Digital solutions are also a major focus of development, for example the IFOY Award 2017-nominated Jungheinrich Indoor Positioning system, which can generate both live and retrospective position-based reports and analysis of all truck movements.
“Recent successes we have had include Grifols, a Dublin-based pharmaceutical firm. We also have had an interesting ongoing success story with Ralawise. This started with a truck and some racking and we were asked to support their ambitious growth as they progressed from a local printer to leading global distributor from the 1980s onwards. They now have a fully fledged intralogistics system from Jungheinrich. There are many more examples, from pharmaceutical companies to leading providers of eCommerce solutions.”
Jungheinrich is fast developing forklifts powered by lithium ion and variations, having increased its investment into R&D. This started with walk behind models in 2011 and the portfolio now includes the range of 48 volt batteries on counterbalance trucks.
“Being a technology leader is important to Jungheinrich; we now have nearly the whole portfolio with lithium-ion options, and the demand from our customers is significant. They want to understand the benefits and cost saving potentials and appreciate the space-saving benefits, with no need for a battery room, and the productivity and safety benefits too.
“Of course, it needs a proper business case as Li-Ion batteries are still more expensive than Lead-Acid batteries. The sweet spot used to be a two or three shift application with 20 plus trucks, but we also see smaller fleet users keen on the convenience, green credentials and safety benefits from this technology.”
At the heart of Jungheinrich’s customer-centric approach is not, as you might expect, the equipment, but a determination to help customers do better in their own competitive environment –- to save money, be more productive, be more focused, be safer and so on.
Jan concludes: “To continue our growth, we need to focus on productivity while adding value. We want to be first to the deal, which we aim to achieve with our innovative, high quality portfolio and our push into multi-channel marketing.”