Jungheinrich – The Interview

Jungheinrich UK has just finished what its MD calls “a very encouraging year” in terms of profits, truck volume sales and increasing demand for its integrated material handling solutions. The first German industrial truck manufacturer to develop a European network, Jungheinrich’s UK presence goes back to 1966 and 42 years later it is one of Britain’s foremost materials handling providers, offering everything from counterbalance and warehouse trucks on sale or contract hire to ‘smart’ materials handling solutions for large warehouses and distribution centres.

Jungheinrich continues to innovate with new trucks addressing specific needs, introducing its latest advanced models at the recent CeMAT 2008 show in Hanover. Warehouse & Logistics News went to Milton Keynes to find out more.

You can’t help noticing the positive atmosphere in Jungheinrich’s UK head office. Underlining it is the cheerful, bright corporate branding running throughout the building from the reception onwards, the same instantly recognisable yellow and dark grey colours found on Jungheinrich’s equipment. It adds up to an upbeat, optimistic team-based culture, led by Hans-Herbert Schultz, MD of Jungheinrich UK Ltd, supported by Marketing Manager Craig Johnson.

“The most exciting thing about my job is working with the great team we have here,” says Hans-Herbert Schultz. “We all want success,
and we make sure it happens. My role is setting the strategy and following it through, bringing the different parts of the business together and motivating people to do well.”

Hans has been MD of Jungheinrich UK since May 2006. He joined the group in Germany from Eon’s logistics operation in 1999, coming in as Head of Management Accounting for the group sales organisation, and then became Finance Director and After-Sales Director for the German operation.

Success follows significant changes
Jungheinrich UK’s turnover increased 18% in 2007 to over £130 million, including 25% growth in sales to small and medium users. Volume sales of forklift trucks increased in line with turnover. This renewed success follows significant changes in the company in the last few years, as Hans recalls: “We integrated the BOSS organisation into the UK business in 2002/3, prompting us to reshape the organisation and try different operating styles.”

When Hans took over as UK MD, instilling renewed confidence was his first priority: “Shuffling things around had created a degree of insecurity, so we set about re-stabilising the organisation and building on our expertise.”

Jungheinrich UK has held fast to its commitment and invested significantly in improving its processes through training over the last two years. Hans elaborates: “We’re currently going through Investors in People (IiP) accreditation. That’s transformed our personnel development to the point where in our annual reviews we agree an individual’s training programme alongside their working objectives and bonus, which gives the organisation a strong sense of purpose. Success is down to empowering people, not simply spending money on the organisation.”

Jungheinrich UK’s HQ is based in Milton Keynes, home also to its regional sales office and service call centre for the Southern UK. Jungheinrich UK currently employs 800 staff, 600 in after-sales and service, including around 500 engineers. On the IT side Jungheinrich has invested in despatch software to ensure smarter use of its engineers, by optimising journeys and shortening travel time and making its vehicle use greener.

Jungheinrich serves its mainland UK customers from depots in Bristol, Birmingham, Milton Keynes, Warrington, Risley in Manchester, Sheffield and Cumbernauld, with an exclusive dealer covering Northern Ireland.

“Our structure ensures our customers enjoy continuity throughout the business, with the same high standard worldwide in products and service. It means we’re close to the customer and can respond quickly to their needs,” says Craig Johnson, who sits on several technical committees at Jungheinrich’s Hamburg HQ and passes on the UK feedback.

Jungheinrich’s all round offering
Jungheinrich offers a well-rounded range of best selling lift trucks and materials handling equipment. “Traditionally we have been strong in the warehouse sector with an electric range including very narrow aisle trucks,” says Hans, “but now we’re also very successful in counter-balance, with both electric and IC models, which we’re actively promoting. We’ve had ‘CB’ trucks in our range for decades, but now we’re recognised for doing so and offering superb quality and value.

“In terms of technical advances we have had regenerative braking and mast lowering for years. The green discussion has been going on in Germany since the 1980s, and as one of the leading German truck manufacturers, we have led in being eco-friendly. Our new electric ‘CB’ range has fourth generation AC technology, giving excellent energy efficiency: our competitors are up to twenty percent less efficient.

“Our emission levels are proportionally lower than anyone else’s. Our hydrostatic engine trucks, which are some of the biggest sellers, are low revving, using 20 to 25% less fuel than normal trucks with torque converters.”

Racking is another area where Jungheinrich UK is enjoying great success. Craig Johnson: “We’re the only mainstream truck manufacturer with our own racking design and system integration division, which is growing steadily.”

Worldwide reach
Jungheinrich began in 1953 in Hamburg, still its global HQ, and now has turnover in excess of 2 billion Euros. Its trucks for the UK and other European markets are made in Germany, in Norderstedt, near Hamburg and Moosburg, near Munich. Technical development takes place in both locations. Lüneburg, also near Hamburg, is home to the smaller series trucks and customised machines. Going forward Jungheinrich has invested 40m Euros in its German factories and is planning two new factories in Landsberg, near Leipzig, and in Moosburg.

Jungheinrich has a very strong market position across Europe, especially Germany. Hans says this has much to do with its policy of selling direct. The group’s fastest growing markets are China and Russia. In common with many truck manufacturers, Jungheinrich has a Chinese assembly plant, serving the burgeoning Far East market.

Serving all sectors
Jungheinrich’s UK customer base spans all industry sectors, but especially manufacturing, retail and third party logistics, says Craig Johnson: “We offer a full range of trucks, and market our solutions to everyone. We’re recognised as a supplier of total truck solutions, and our customers are some of the largest brand names in UK industry. We service many big companies, with solutions including permanent on-site engineering and maintenance and spare parts supplied to site. We deliver trucks, racking and smart access systems, based on our own proprietary software.”

Fork lift battery changing is an increasingly important part of the supply chain for Jungheinrich’s major retailer and 3PL customers, who place a growing emphasis on it, says Craig: “We also supply Jungheinrich-branded and other makes of battery systems, changers and chargers, and can even design customers’ battery rooms if required. On the racking front, we have recently fitted out a very large warehouse shed on the M1 corridor with trucks and racking. We also supplied the cleaning machines.”

Trucks continue to be the core of Jungheinrich’s business, with one of the leading UK retailers buying over 100 Jungheinrich high lifting reach trucks in 2007.

Jungheinrich has a department in Warrington dedicated to integrated projects. “Our ability to supply hardware is underpinned by our ability to design and implement solutions, for which we have seen an upsurge in demand since the beginning of the 21st century with the growth of massive distribution centres.”

This combination of German quality, energy-efficient trucks, service solutions and consistent high standards across the UK, plus Jungheinrich’s direct approach, Craig continues, “gives us a competitive advantage other companies don’t have.”

Taking the long view
Hans-Herbert Schultz is realistic about the fork truck market’s prospects: “We’re coming from a solid growth rate worldwide. The market’s been declining in the US for a couple of years but the rest of the world, especially Asia, China and Eastern Europe, still has a high growth rate. In Western Europe and the UK, there was significant growth but now we’re seeing consolidation.”

Hans agrees with the general trend for the UK truck market as observed by BITA and others: “We expect a decline this year, no growth next year and then a return to growth with increasing worldwide trade, which will call for more of our products.

“A trend to more powered pallet trucks has resulted from changes in Health & Safety regulations. This will benefit Jungheinrich and as regulations become stricter, we expect ride-on trucks to grow at pedestrian trucks’ expense, offering end users more productivity and protection. Reach trucks will also work at greater heights as land shortages drive warehouses to operate at higher pallet levels. This is an area where we have wide experience and offer solutions combining trucks, racking and guidance systems.”

New trucks for new needs
Jungheinrich is continually replacing existing products with new models. The hydrostatic IC range offers gas and diesel options with hydrostatic transmission, giving higher efficiency, greater ergonomics, productivity and lower energy consumption. The electric counterbalance range includes 1.3 and 2 tonne, 3 and 4 wheel options. “We’re in our fourth generation of AC technology, which is more efficient and gives higher productivity, with less moving parts,” says Hans.
Jungheinrich is also updating its indoor and outdoor reach trucks. Its bestselling sit- on indoor reach trucks, the ETM/V range, have lift heights in excess of 12 metres, various productivity features and are energy-efficient. Jungheinrich has around 30% share of the European sit-on reach truck market.

And Hans continues: “We’ve put counterbalance wheels on a reach truck, the first one in the market, creating one truck that can do both jobs.” Jungheinrich will be rolling out similar improvements across the range: “We’re committed to continuous development with every new model to increase efficiency and productivity. More and more customers are looking for the lowest ever lifetime costs. We still have the same emphasis on a combination of speed and performance, moving products out of the warehouse at the lowest running cost and highest working rate.”

“The response to the new range was very positive at the recent CEMAT show,” says Hans, “with a similarly high response in UK orders, including many for the new hydrostatic trucks. The new electric counterbalance trucks are now available here and advance orders are strong.”

Customer facing solutions
Jungheinrich also offers in-house financial services from Milton Keynes, such as leasing and contract hire. Each depot offers short-term rental trucks, a growing market to help with peaks especially building up to Easter and before Christmas. The depots also sell refurbished trucks, a significant part of Jungheinrich’s UK business, for which demand is strong in our currently difficult times. The central UK workshop is in Risley, Warrington, with major refurbishments in Dresden.

To minimise customers’ down time the UK after-sales call centre works from 7am-6pm Monday to Friday and service managers are available outside those times. “Since 2004 we’ve invested in laptops and software for our engineers, and have strengthened our supply chain,” says Hans. “Our spare parts department in Germany supplies parts overnight via Coventry airport into our service engineers’ vans or customers’ locations.”

Setting the standard for the industry
Jungheinrich works to FEM standards, and its staff members sit on FEM and BITA technical committees to help develop future benchmarks. “Health and Safety is paramount,” says Hans. “Our trucks are built to the highest standards. Driver protection is a given in both truck construction and electronic controls across the range. We also offer access control, with starting only possible when the seatbelt is fastened and the pressure sensor detects the driver is seated.”

Jungheinrich’s trucks can have pre-set controls to limit their speed when the forks are loaded and rise above 1.5m. Setting usually happens at the factory, but customers can also set speeds for their operation.

Given their strong position, Hans and colleagues are relatively undeterred by the prospects of the stormy world economy: “For us, supplying high quality trucks has always meant offering machines that give optimum performance all round whilst keeping whole life costs under control, rather than simply producing high-spec trucks that are over-engineered. Add our local service in each country and we’re well placed to maintain our market position. We intend to go on strengthening our competitive edge; in a tough economic climate our refurbished trucks offer a stronger performing investment than low cost, low quality imported machines, which do not have our supporting infrastructure. We’re going to keep the same business model, with direct sales and an integrated service, for the foreseeable future, and are very confident we can continue achieving further growth.”

Jungheinrich UK Ltd
Craig Johnson
Tel: 0800 357457
www.jungheinrich.co.uk