Max Meister, the CEO of Munich-based Ludwig Meister — a third-generation, $120 million distributor of bearings, power transmission, fluid power and tooling products — says companies should rethink what it means to become “digital.”
And that word isn’t about what immediately comes to mind for most distributors.
“Digitization is not a fancy website,” Meister said on the most recent episode of MDM Live. “It’s more important to digitalize the processes in the background.”
The one-hour episode, “Insights on 2020 Transformation,” hosted by MDM CEO Tom Gale and Indian River Consulting Group’s Mike Marks, can be seen by clicking here. In addition to a 30-minute conversation with Meister, the show includes a sneak peek at next week’s virtual event, Sales GPS 2020.
Ludwig Meister, a winner of MDM’s 2019 Digital Innovation Award, has been on a multi-year digital transformation journey, and Meister took the MDM Live audience behind the scenes for a look at how that journey has transpired over recent years.
That journey started by the company digitizing and strengthening the automation capabilities of its back-end systems purchasing, inventory management, logistics before focusing on the sales side of the business. Ludwig Meister accomplished this transformation by developing its internal technology and development expertise, allowing the company to customize and enhance ERP and other critical platforms.
In other words, before the company would consider rolling out a slick front end that salespeople could showcase and customers could shop, Ludwig Meister optimized the backend of the company’s distribution operation processes. Knocking out those behind-the-scenes tasks wasn’t always well-received by sales staff, but it was necessary to get the company running more efficiently.
“We started with purchasing and then with logistics — and then with the website,” Meister said. “We also established our own CRM because we were not finding a CRM that matched our expectations. It’s important that the processes are very smooth.”
Never a Better Time to Go Digital
That became even more important when the COVID-19 pandemic hit earlier this year. Despite all the process improvements Ludwig Meister has implemented in recent years, the company wasn’t immune to the economic hit as global business slowed to a crawl.
The company expects sales to be down 15% this year with the biggest decline in its OE segment, which makes up 70% of the company’s end markets.
“The segment is quite struggling at the moment in Germany,” Meister said. “But we try to get better every week, and we’re trying to improve our processes and all the stuff we have been doing. We hit the bottom we think, so it’s not getting worse at the moment, but at the moment, frankly speaking, these are quite challenging times.”
But digital enhancements did help Ludwig Meister weather some of the coronavirus-related storm, validating the efforts and investments the company made in a solid backend systems. When business comes back, the company will be more than ready.
“Honestly speaking, when we started with our vision of the frictionless supply chain, we weren’t so sure if we can go there or how long it will take us to come to this place,” Meister said. “But at the moment, we are very happy. We just established a new purchasing software that we started in January, so our purchasing department is working very, very lean at the moment. And the good thing is with our CRM, we have all our ERP data, our website, our marketing in one database. We try to combine all the elements of our digitalized processes and try to create value for our customers.”
Join us for Sales GPS 2020 on September 1-2 to learn how to build a team-based sales function that integrates outside specialists with inside sales, marketing, analytics and a customer-centric multichannel model — all to help your company cope with the new distribution landscape.