Retrofit and Component Business: An Approach with Growth Potential

Markus Schroeder, Head of Service at Reifenhäuser Cast Sheet Coating GmbH, provided fascinating insights into the company's retrofit and components business. Reifenhäuser, a family-run pioneer in machine manufacturing for plastics processing, is increasingly focusing on this business area as a sustainable approach with significant growth potential. Their aftermarket service provides professional inspection, maintenance, repair, and modernization to prevent machine failures and extend equipment life. They offer modernization packages for various line areas, including line control, winders, haul-offs, extruders, dies, and complete retrofits. . 

Content:

• Retrofit and Components: Growth Engine in the Aftermarket
• Three Pillars of Customer Benefits
• Customized Structure: The Power of Specialization  
• Digital Tools: CRM, CPQ and ERP in Use
• Spare Parts Strategy: Four Pillars of Success  
• Focus On Growth Strategies: Reifenhäuser as an Innovative Service Partner 
  

Retrofit and Components: Growth Engine in the Aftermarket 

With around 1,700 employees worldwide, Reifenhäuser has established itself as a specialist in extrusion systems to produce plastic products. The company's product portfolio ranges from packaging machines to highly specialized systems for producing items such as plastic films for banknotes. 

One of Reifenhäuser's unique selling points is the world's largest extrusion line technology center. Here, customers can test and optimize the production of their products on Reifenhäuser machines. This technology center also plays a key role in the retrofit and component business, offering the opportunity to develop customized components. 

According to Schroeder, the company is taking a proactive approach to the retrofit and components business. Reifenhäuser develops retrofit products for certain machine parts in advance in order not only to guarantee their performance in the long term, but also to increase it. Markus Schroeder: "Customers often don't know where on the machine a change or expansion would make sense. We therefore approach the customer with preconfigured components." This approach enables Reifenhäuser to anticipate customer needs at an early stage and thus increase service quality. 

In this context, Schroeder emphasized the immense importance of the retrofit and components business for his company. It accounts for about half of the total service turnover and has even higher growth rates than the spare parts business, according to the manager. The individuality of each machine requires tailor-made services, which makes this business area particularly challenging, but also lucrative. 

Three Pillars of Customer Benefits: Efficiency Boost, Better Machine Availability and Higher Return on Investment 

That is why there are plans to expand it further – after all, the retrofit and components business offers several advantages: 

Increased Efficiency and Return on Investment (ROI)

Customers often strive for more efficient production to increase their profitability. Reifenhäuser is responding to this by offering to implement new components in existing systems. This "upgrade" makes the machines more powerful. The benefits for the customer: less energy consumption and material wear and a higher overall performance of the system. So, they increase productivity while reducing operating costs, resulting in an improved return on investment.

Increased System Availability  

Another important aspect is the improvement of Overall Equipment Effectiveness (OEE), especially in the field of electrical engineering and electronics. Electronic components and software often wear out faster than the mechanical parts of a machine. Users therefore often need new electrical components to be able to continue using their machines. Through targeted retrofits, Reifenhäuser enables customers to make their systems fit for the coming years. The main advantage is safe plant production with minimal downtime, which significantly increases the overall efficiency of production. 

Adaptation to new market demands 

The third benefit relates to the development of new markets, especially in the field of sustainable production. Schroeder highlighted the trend towards recyclable products in plastics production to reduce environmental pollution caused by plastic in the oceans (keyword PET = polyethylene terephthalate). Reifenhäuser proactively develops component solutions that enable customers to produce such environmentally friendly products. This often involves a new system configuration or the installation of new parts. The advantage is obvious: customers get the opportunity to produce new, sustainable products with improved quality and thus remain competitive in emerging markets.  

Customized Structure: The Power of Specialization 

Reifenhäuser has therefore set up a specialized organization for the retrofit and components business, which includes various departments and functions: 

Sales and Order Management 

• Dedicated sales staff exclusively for retrofit and component sales 
• In-house order management/processing, separate from spare parts sales 
• Employees "translate" texts from the CPQ system into article structures and manages them throughout the company  

Project Planning and Construction 

• Specialized retrofit and component project planning 
• Employees with extensive knowledge of components and electrics 
• Ability to independently design complete systems 
• Expertise in standard retrofits and machine-specific retrofits 

Project Management and Software 

• In-house project management for medium-sized and large renovation projects 
• Dedicated software developers with expertise in the retrofit business 
• Configuration of corresponding processes in the software 

 Other Departments Involved

• Manufacturing  
• Assembly 
• Sales 
• Legal department 
• Marketing 
• Quality Management 
• Documentation 
• Application engineering

According to Schroeder, this comprehensive organizational structure enables the company to handle the retrofit and components business in a highly specialized and efficient manner. By involving different departments and experts for specific tasks, comprehensive customer support is guaranteed from planning to implementation. 

Digital Tools: CRM, CPQ and ERP in Use  

Reifenhäuser uses the same tools in the service business (retrofit business) as in plant sales:

CRM (Customer-Relationship-Management)

•    Opportunity management 
•    Dashboards 
•    Campaigns 
•    Machine Assets 
•    Reports 

CPQ (Configure Price Quote)

• Quotation preparation with price configurator 
• Component selection
• Calculation 
• Risk assessment 

 ERP (Enterprise Resource Planning):

•   Job handling 
•   Order management 
•   Project system 
•   Production Control 
•   Procurement 

Markus Schroeder: "Basically, you need a lot of resources and skills to be able to successfully implement the retrofit business in plant engineering." This investment in specialized departments and processes underlines the strategic importance of the retrofit and components business for Reifenhäuser. 

Spare Parts Strategy: Four Pillars of Success 

Another focus of Schroeder's presentation was the parts business. Reifenhäuser deals systematically with the topic of spare parts and focuses on four relevant areas, according to the speaker:

Identification 

The identification of spare parts in the ERP system forms the foundation for digital services. Reifenhäuser filters out those related to spare parts from hundreds of thousands of material master data entries in the SAP system. This process includes: : 

• Determination of sensible spare parts labels 
• Systematic data maintenance for new systems  
• Analysis and post-maintenance of missing license plates from movement data 

Each new part is given a material number and the information about what kind of spare part this is. 

Availability 

Reifenhäuser relies on worldwide spare parts dispatchers to ensure the availability of frequently required parts. This significantly increases customer satisfaction and earnings. The process includes:  

• Analysis of past consumption and conversion rate 
• Use of a professional scheduling tool for inventory optimization 
• Inclusion of new parts from the supply analysis 
• Regular semi-automated inventory optimization in the SAP system 

Pricing 

The company uses the technology of MARKT-PILOT for market-based pricing of spare parts in certain areas. Markus Schroeder: "We have had good experiences and have benefited from them." With this technology, according to Markus Schroeder in his presentation, it was possible to implement market-based pricing for spare parts for the first time. This is to be extended to other spare parts in the future.  

Value Selling 

In general, Reifenhäuser pursues an active approach in the parts business, as Markus Schroeder emphasized. This means: 

• Sales has access to the spare parts portfolio and proactively offers customers services such as fitness checks of systems and components, service contracts and spare parts packages. 
• These are already offered when the machine is sold. 
• Even with older machines (in use for 2 years or more), Reifenhäuser examines possibilities for additional sales in the service and parts business.

In short: According to Markus Schroeder, this four-pillar principle in the parts business is an important element within Reifenhäuser's aftermarket. 

Focus On Growth Strategies: Reifenhäuser as an Innovative Service Partner  

The presentation clearly showed how traditional machine manufacturing companies can expand their aftermarket business and tap into new growth potential. Through a systematic approach that ranges from product development to marketing and pricing, Reifenhäuser positions itself as an innovative partner for its customers in the changing plastics processing market.

This strategy not only promises sustainable growth for the company but also supports customers in meeting the challenges of the future. If you combine the whole thing with market-based spare parts pricing, as is the case with Reifenhäuser, sales and profitability in the aftermarket can be further increased.