A talk with Harald Wegerer, Vice President Customer Service Division at ENGEL

“In our industry, downtimes are extremely critical”

It has been nearly a year since ENGEL centralized its global spare parts logistics operations at the cargo-partner iLogistics Center near Vienna’s international airport. We asked Harald Wegerer, Vice President Customer Service Division at ENGEL, to speak to us about the motivation behind the decision to outsource their global spare parts logistics operations to cargo-partner. Our conversation of course also turned to future challenges – from networking platforms and Industry 4.0 to 3D printing and plastics recycling.

“Every day we are asked to connect to our customers’ systems. This poses a substantial challenge when you’re talking about several thousand customers and probably just as many systems.”

Harald Wegerer recognizes a trend towards more inter-connectivity. In the iLogistics Center, the processes are fully automated—20 EDI connections between both companies ensure efficiency.

Interviewer: You started your career as a mechanical design engineer at ENGEL and, after occupying a number of roles at the company, have been in charge of the entire global after sales division since 2015. Can you tell us more about your interesting career path? Which roles did you find particularly exciting and what projects are you especially proud of? 

Harald Wegerer: I had only one dream at age 15 – to become a professional cyclist. There was an opportunity to apprentice as a technical draftsman at ENGEL which, I assumed at the time, would keep me well rested for training in the evening since it was desk work. And I did actually get a three-year contract on a racing team, but that didn’t put food on the table, so I ended up coming back to ENGEL as a designer. I attended evening classes at a technical college at the same time and subsequently took over the management of spare parts distribution for large machinery. Following part-time study at the University of Applied Sciences Upper Austria-Wels, I moved with my family to the US, where I was the head of the customer service division for North America from 2007 to 2011, and I have been the global manager of this division since 2015. 
Over the past several years we have redesigned practically every aspect of the organization and improved performance. An insane undertaking that we sped through at full gallop during the middle of a boom time. I am proud of the fact that we are getting positive feedback from all sides and are now harvesting the fruits of our efforts. But we haven’t reached the finish line yet. The project is planned through to 2025 – it remains exciting and challenging.

In June 2018 ENGEL centralized its global spare parts logistics operations in the newly opened cargo-partner iLogistics Center. What were the most important requirements you placed on the iLogistics Center? 

Production in the automotive and food industries depends on maximum availability and downtimes are extremely critical in our industry. That’s why the spare parts business is of great strategic importance to ENGEL. Our demands were absolutely clear from the start: the highest degree of process reliability and the latest possible cut-off times for new orders with guaranteed same-day delivery and the best connections to transport logistics. Another important requirement was the ability to handle orders 365 days a year. During the selection process, the Fischamend location won us over with an excellent overall concept.

ENGEL’s requirements and processes were incorporated in the design of the iLogistics Center. How did this joint design process work? 

That was an exciting journey for us – ENGEL is, after all, known as a machine manufacturer with the highest level of vertical integration. So making the decision to externalize was not an easy one. We took a lot of time to prepare and we extensively planned each and every step together with cargo-partner. But the time pressure was also enormous, as follow-up projects in our plants determined when the spare parts warehouse had to move out. The effort was worth it, though, as we managed to relocate several hundred semitrailers of spare parts over a period of three months without our customers ever noticing.

Collaboration between ENGEL and cargo-partner goes back much further. As early as 2014, a joint spare parts warehouse was opened in India. Then the warehouse was moved to the Free Trade Zone in Bangkok, where more than 5,000 ENGEL stock keeping units are now managed. What were the main reasons for starting this collaboration in India and moving to Thailand?

The inventory in our spare parts warehouse in India was relatively limited and therefore not very promising for the longer term. So in 2016 we decided to move the warehouse to Thailand, where it was expanded and developed into a centralized hub for Southeast Asia. This was the first time we found ourselves having to discuss new logistics concepts and it was a challenge for us as mechanical engineers. We managed it really well overall.

“When it comes to spare parts logistics, speed is everything. Which means that up until now a concept involving a large central warehouse and speedy distribution systems has proven to be the best. Expanded networking and simplified receipt and processing of orders in particular will play a role in future. ”

Wegerer ventures a look into the future of spare parts logistics.

Daily processes are automated in the iLogistics Center Fischamend and both business partners are extremely well networked—20 EDI connections between ENGEL’s ERP system and cargo-partner’s WMS were installed for this very purpose. Do you also see this trend toward ever tighter networking among your customers? How would you assess the mechanical engineering industry’s general willingness to innovate?

Every day we are asked to connect to our customers’ systems. This poses a substantial challenge when you’re talking about several thousand customers and probably just as many systems. Ultimately we have to be able to connect with our customers using standardized interfaces, not least to simplify and speed up the processing of orders. Overall, ENGEL is an Industry 4.0 pioneer. Our efforts in this direction are bundled under the product name eConnect, which encompasses everything from proactive monitoring of the condition of warehouse components to a customer platform for exchanging information, from fully developed remote maintenance solutions to MES integration in plants and intelligent systems to keep plants functioning at their optimal operations level. We have made significant investments in this area. Innovation drives our industry, both on the level of applications, where we recognize a great deal of potential for synthetics, and in the plants themselves. You simply can’t survive without making considerable investments in innovation.

In addition to ever more extensive networking and process automation, 3D printing is another visible trend in spare parts logistics. Is ENGEL already using or planning to use this technology in the near future, producing spare parts with 3D printers? In which industries is this already a realistic prospect, in your view?

We are not yet actively using 3D printing, but we are watching developments very closely. Both as a possible substitution for injection molding in certain areas and as an alternative to classically manufactured spare parts for our plants. We think more development is needed before it’s ready for production. At the moment we consider 3D printing as an option in the medium term for the smallest of small series production processes where the mechanical, optical, and dimensional requirements are limited.

Trends and challenges in spare parts logistics—what do they look like today and what will they be like tomorrow? And looking even further ahead into the future—where will spare parts logistics be in 20 years, for example?

When it comes to spare parts logistics, speed is everything. Which means that up until now a concept involving a large central warehouse and speedy distribution systems has proven to be the most expedient for our product range. Expanded networking and simplified receipt and processing of orders in particular will play a role in future. Maybe in 20 years we will think of 3D printing as completely normal—given the speed of development now, I can’t even begin to imagine where we will be by then. But I can count on experiencing all of this firsthand over the rest of my career—an exciting prospect.

Both ENGEL and cargo-partner have embraced comprehensive sustainability strategies. The timber construction iLogistics Center is visible evidence of the consistent application of sustainable innovation. In your opinion, which innovations in your industry are the most important in improving processes related to sustainability—and how can intelligent spare parts logistics add to this?

We are part of an industry that is a focus of reporting these days. ENGEL stands by its responsibility as a member of the international plastics industry and is strongly committed to a responsible use of plastics. We will not be able to manage the challenges of our time without plastics. For example, sustainable mobility – electro-mobility being a key word in this context – is not conceivable without plastics. The problem is not the material itself, but the way we humans use it. This is where we need to step in, increase our recycling capacities and open up a wider range of applications for processed plastic waste. Plastics are very efficient materials, both in regard to production and processing. This also benefits logistics, among other things, with lightweight packaging. Moreover, an intelligent system for supplying spare parts means that we make their transportation more environmentally friendly. For example, we can make transportation more efficient with sub warehouses located in closer proximity to our customers. As a father myself, I consider these issues extremely important.

Thank you for taking the time to talk to us!