Prof. Rainer Lindner: “We want to pass the permanent stress test”

Prof. Dr. Rainer Lindner is Chairman of the Management Board of Heine + Beisswenger Stiftung + Co KG. He considers the flexibility and customer proximity of a family-run company to be the best basis for successfully mastering the simultaneous challenges of geopolitics and digitalization.

Prof. Lindner, what challenges does a medium-sized company like Heine+Beisswenger,
which has been successful for many decades, face 2024?

After a phase of economic boom and very strong demand into 2021, there is a whole series of changes that we have to face: From the sanctions following the Russian war of aggression and the resulting need to search for new procurement markets to the already major tasks of decarbonization and digitalization – and all this in a clearly noticeable recession, right across our
most important customer markets such as the automotive industry or mechanical engineering.
This is a permanent stress test. But we want to pass it and set the course for the future of our traditional company with new business models, more sustainable products and digital transformation. Flexibility, service orientation and customer satisfaction must also be ensured during these changes. This is a challenge for everyone here at the company.

Let’s start by talking about the procurement markets since 2022. You were forced to findcalternatives to imports from Russia, Belarus and Ukraine very quickly…

We found them in Turkey and, above all, in Asia: China, Korea, India, where we have of course been active for some time – but not to the extent that we are now. Suppliers perceive us as a well-positioned player in the German steel trade in terms of quality and service. After all, if you
as a buyer are faced with a large steelworks in China, for example, which has an important role as a regional supplier, you have to convince them with good customers. We have certainly
succeeded in this.

Keyword sustainability. You are involved in a “green steel alliance” with several partners along the value chain – what are the goals?

For us, it’s about helping to shape the future. We started this initiative back in the fall of 2021 and were able to involve both our suppliers and our customers. As a retailer, we spoke out very early and very clearly about the need for carbon footprints in the markets and also started
implementing them early on. The standardization and transparency of our CO₂ balances is the common goal of the initiative. We can see that this is now definitely gaining ground in the German steel industry, even if the current market situation is perhaps having a somewhat
delaying effect.

What role does digital expertise play in this process?

As a retail company, our business model is to always be in stock and able to deliver – precisely because of our customers' efforts to reduce their own inventories. At the same time, we must not maintain a cloud of slow-moving stock. This is where digitalization comes into play. Today,
artificial intelligence can be used to optimize purchasing with foresight: Predictive purchasing is the keyword here. We are in the middle of a process to improve the quality of our data and to
enable rational inventory management based on empirical data. This also means connecting our data to that of our suppliers and customers. In this way, the digitalization strategy opens up important potential for cost optimization. Another important part of digitalization then takes place on the shop floor, with optimized and increasingly automated warehouse logistics. Not only our
industrial customers, but also we as a retailer are in the midst of the digital transformation.

To what extent have customers already developed the openness of standards and data so that supply chains can be digitally mapped across companies?

We are surprised at how quickly this digitalization is currently taking place everywhere. Just as an example: Using the cloud-based Integrity Next platform, we can check with our suppliers to what extent a company operates in accordance with the Supply Chain Duty of Care Act, whether Russian value creation or child labor is involved and according to which industrial
standards the CO2 footprint is guaranteed. This is basically a kind of supplier assessment that can be implemented and is also in demand. Most suppliers already use such platforms and data rooms to stay in business. So when we trade, it's no longer just about steel technically, but
about its digital DNA. A piece of steel is a data carrier. Being active in this area is a real
investment task for us. It is also the basis for expanding our portfolio, without which we would
not be fit for the future.

Is it actually easier to make sustainable decisions on these major global and digital
challenges in a family-run company?

I am convinced that SMEs can react more quickly than large companies. I see the advantages of a smaller company in its flexibility and speed of decision-making. In terms of the founding concept, family businesses are designed for the long term, for preserving value across generations. You don’t think in terms of the length of managers’ contracts. They think beyond economic cycles and tackle investments even in a recessionary phase in order to secure opportunities and the future. This is not possible without openness and a willingness to listen to employees who come from outside with new experiences. This is necessary when a company needs to consolidate and expand at the same time.

Interview: Hans Gäng, summer 2024