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Digitalization

The use of digital tools has become essential for every trading company the world over. This naturally also applies to steel distribution. Customers want things to work the same way in business as they do elsewhere. Klöckner envisions an open industry platform for the steel and metal industry in which information asymmetries have been eliminated by digitally connecting all market participants in order to enable significant efficiency increases for all.

As well as aligning our business for the long-term future and making life simpler for customers, digitalization also marks a key step forward in sustainability. Lower transaction costs, for instance, or just-in-time stockholding make it possible to further optimize resource consumption. Our incubator in the start-up scene, kloeckner.i, and the activities of our venture firm, kloeckner.v, also bring us into contact with the latest solutions the market has to offer.

As part of the “Klöckner & Co 2022” strategy, we have set ourselves the target of generating 60% of sales via digital channels by 2022. Digitalization is an ongoing process for us. This is why kloeckner.i is not only about developing promising product ideas, but also about constantly refining them. Reviewing the performance of each digital tool plays a key role. As a case in point, we use information available to us, such as page views, logins or customer stay duration to further enhance the online shops for users. Among other things, weekly meetings help us share and discuss the findings. This is critical to our ability to implement new ideas without delays.

In addition, target group analysis helps us precisely pinpoint customers who would benefit most from ordering online in the future but do not yet make use of the option to do so. For 2018, we plan to further improve user-friendliness and gradually enlarge the product range. This is to be implemented by means of targeted customer personalization and by adding complementary products from other suppliers (marketplace functionality). As a result, we aim to provide customers with the optimum procurement experience.

In many cases, today’s tasks have increased in complexity. This makes it no longer efficient to apply outdated solutions. It would not be the first time that a carefully crafted solution failed because it lacked user relevance and acceptance. This happens when the problem being worked on is not accurately focused on the target group. For complex challenges, increasing use is therefore made of the design thinking approach. Unlike before when specialists would go after the ideal solution on their own, colleagues from ostensibly unrelated disciplines are also brought into the process. Design thinking enables us to pool creative potential for generating ideas. At the same time, the process is always geared toward the targeted customers, who should be involved and their feedback incorporated from the earliest possible stage. Involving customers in the innovation process is fundamental to verifying initial assumptions through to the point of certainty. Design thinking thus aims to produce innovations that are user-oriented and specifically meet and satisfy user needs and wishes.

To ensure that everyone in the Company embraces and sees themselves as part of these changes, we make use of formats such as our self-developed DigiDays event series. The goal here is for employees to voluntarily familiarize themselves with start-up methods in order to devise solutions to problems in a creative environment. We launched the first of these events in November 2016. Participants had the opportunity to generate digital and innovative ideas for everyday office tasks. From the many ideas that resulted, we implemented the top three across our Company. In light of the very high participation rates and positive feedback, we held DigiDays 2.0 in July 2017. The objective this time was to find solutions for the holding company in Duisburg to better support our country organizations’ operating business without neglecting its management function. In both series of events, we likewise applied the design thinking approach. Scheduled to take place in the first half of 2018, the next DigiDays will focus on a healthy failure culture and agile working methods.

On the subject of failure culture, we additionally launched a series of failure sessions in 2017 of the kind that are typically used in the start-up scene. In a failure session, failed start-up entrepreneurs report on their experiences, what they did wrong and what they learned. Although still fairly rare, such events are also beginning to be held within large corporate groups. Here, too, the focus is on people openly talking about their mistakes and the lessons learned and then going on to discuss them in the round. For Klöckner, the goal is to establish a start-up-style learning and failure culture in our Group in order to become faster and more agile as well as less perfectionist in our work.

To further boost our digital share of sales, we invited 80 operational (management) employees from all over the Klöckner & Co Group in September 2017 to a Digital Sales Accelerator (DSA) seminar at our start-up subsidiary kloeckner.i in Berlin. Working together with the Klöckner & Co Management Board, participating employees focused intensively on the development and acceleration of processes to promote digital sales.

Christina Kolbeck
Christina Kolbeck

Head of Investor Relations & Sustainability

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