Last month we welcomed Syncron’s new CEO, Dr. Friedrich “Fritz” Neumeyer, to our Stockholm office. While starting a new position in the middle of a global pandemic may not be ideal, Fritz still managed to hit the ground running. One month in, we’re asking him to share what he’s learned so far about the industry, current market opportunities, and our customers—as well as a little about himself.
Q: First off, welcome to Syncron! We’re excited to have you at our helm.
Fritz Neumeyer (FN): Let me start by saying how happy I am to be here—both as part of the Syncron team, and in beautiful Stockholm. I’ve enjoyed getting to know the city on foot these past few weeks and it’s really a top-notch place. I’m not sure how I’ll feel when the sun goes away for winter, but we’ll see.
Q: Before we dive into your thoughts on the industry, we have to ask about the orange glasses.
FN: Okay, I’ll be honest—I didn’t buy them because of Syncron. I just happen to find orange a really cool color, so I’ve been wearing them for a while.
Q: How would you describe yourself?
FN: You may be better off asking someone who’s known me for a bit because they might be really honest. One thing I can say is I am very passionate. And once I find a passion for something, I try to inject myself into it with my heart, my soul, my life, and my blood. That’s really how I am.
I have high aspirations and expectations for myself, and for everybody working here at Syncron. I will ask everyone, including me, to go to the maximum and maybe even a small step beyond on a continuous basis. Can we always sustain this? No, and I realize the need for a balance between private life and business life. I also needed to learn this myself to an extent. I cannot promise that things will be easy going, but what I can promise is that I’m committed to making this a joyful experience for as many colleagues as I can.
Q: Your background is in nuclear physics. What drew you to that field?
FN: What can I say? I just love it. It sounds a little bit pretentious, but I think the whole question about where does the universe come from goes way beyond observation. There’s a deeply philosophical and maybe even religious element embedded there. It’s fascinating to see the smallness of humanity in the epic dimensions we talk about with the universe. Now, you may say, what in the hell does the universe have to do with nuclear physics? Understanding the smallest particles in physics, really what keeps everything together at the smallest level, is key to understanding how stars are evolving, how the universe was created, where the universe will go, what keeps it all together. It’s elementary to this type of problem. And I thought this was the most fascinating thing to look at.
Q: What do you think you will bring with you from nuclear physics to Syncron?
FN: That’s a difficult question. Physicists are typically fairly analytical, and some people might call me a rather analytical person. I think you need to have both the analytics and the heart, but hopefully analytical talents are always helpful in life, particularly in business. On the philosophical side, you learn to be humble in physics because you realize how little we know and understand, and you’re confronted with this every day. And while you have to learn to be humble, it’s also always inspirational to learn more and when it comes together, it’s a fascinating science. For me personally, staying humble and remembering that you never stop learning is very important.
Q: You’ve probably spent a lot of this first month learning about the after-sales service business as an industry. Is there anything that’s surprised you?
FN: Nothing has surprised me fundamentally. The challenges I’ve heard about from customers so far are the same every industry is facing during this economic crisis. They are suffering. They’re taking a hard hit—sometimes up to 20 or 30% reduction in orders. That’s a very dramatic loss with a huge impact on the overall business.
I think after-sales service is an extremely important source of profitability and customer loyalty for almost all of our customers—as they’ve confirmed both to myself and my colleagues in the leadership team. If we look at the mid- to long-term, these customers have very different maturity levels when it comes to their thinking around how to lead their business towards the servitization model. They all understand the concept. They appreciate the idea behind it and wish to move towards this path. But their corporate environments, or at least certain functional setups within those environments, are all different. Where they’re coming from doesn’t always make it easy and many factors can prevent them from accelerating on this journey. They have to respect the distribution channels, organizational structures, and other powerful elements involved in building and designing products. And of course, sometimes they have very heterogeneous IT platforms.
With these varying maturity cycles, we’re learning that Syncron is absolutely justified in taking a seat at the table to discuss servitization with our customers. I think we can do even better and help them uncover elements on each step of their journey. They may not all want to go straight to the end state, and we can also provide advice and support for the intermediate steps.
Q: What excites you most about after-sales service?
FN: Honestly, to me it’s probably the most exciting place to be in the whole manufacturing world because it most substantially drives business transformation. Different industries are at different places on their path from a product supply and break-fix-maintenance model towards a product-as-a-service model. But some industries are already there. Take Xerox copy machines, for example. They’re not going to be supplied as machines anymore. It’s a pay-by-page model now, and has been for many years. Or aircraft turbines—we see a fly-by-hour and pay-by-hour flight model.
For the industries that have gone there, it’s had a huge impact on their business model. Massive. It’s about the entire way of working for these companies, starting with product design. The whole product lifecycle management process needs to anticipate how to portray service elements to customers, how to invoice and control, and so on, versus how you supply your parts to make sure that products are going to be operational with uptime, all the time. That’s why we’re also driving the idea of Syncron Uptime™ so hard.
Although this change to the business model may not be visible in all manufacturing industries today, I’m convinced it will impact them in the next decade or two. And with that being said, it’s the most exciting place to be because I really enjoy helping other companies on that journey. We’re not going to be the only enabler for sure, but we can play a super important part as advisor and supporter to these companies and be a partner for them on that journey.
Q: How do you think Syncron will differ from those other enablers?
FN: I think it starts with a conscious decision about where we want to compete. This may be stating the obvious, but no company can win everywhere. Syncron has had huge success around our current portfolio for specific industries and even some sub-verticals in these industries. The whole idea of aligning a portfolio by target market is pivotal for any company’s future success.
What I would like to explore with my friends and colleagues here at Syncron is how we can go even deeper and become even more relevant for the industries we already have a footprint in today. Because from our customers’ perspective, products aren’t generic—our customers in mining and construction have different terminology and different processes compared to aerospace and defense or medical supply. Across these industries we look at different parts, part numbers, part values. We look at entirely different types of KPIs to drive and determine inventory value. And we look at different levels of servitization. Helping Syncron focus more on specific markets—and this isn’t so much a geo topic because we’re a global player; it’s really more about industry verticals—that’s really important for me. This will allow us to truly build on the claim that we are already the best in certain elements and continue to be the absolute very best, the distinctive best. That, I think, is the position of strength we should aspire to for some industries. You cannot be the best everywhere, so we need to make choices.
Be sure to join us next week when we’ll be talking more with Fritz about his experience so far at Syncron—what he thinks of our culture, our organization, and what he’s most excited about.