Innovations are created by people

Interview with Frank Koch, Chairman of the Management Board, Georgsmarienhütte Holding GmbH

marketSTEEL: Mr. Koch, you recently said: "The future will be even more digital than it is today." What are you referring to: Materials, production processes, logistics or changes in the industry?

Frank Koch: Digital innovations affect all areas: Products, process chains, workflows, business models, customer contacts and customer requirements. Digitisation, innovation and disruption relate to our entire business model, not just to individual processes or components.

The business environment is in a constant state of flux. Just think of mobility and power generation of the future. These are factors that will turn our industry upside down . This means that our business models are put on a new footing by the issues of mobility, the political environment and user behavior. Therefore, the buzzwords digitisation, innovation and disruption cannot only refer to a singular process in our production or industry, but always to the holistic system. Everything is interconnected.

marketSTEEL: How do you deal with the challenges in your company? How do you manage the changes?

Frank Koch: It's a top-down process that has to be initiated by management. The success of a change process then lies in the organisation, in the people who see concretely in their specific work environment what can be done differently and better. That is why our organisation's DNA contains the need to promote innovation and digitisation and people who are ready for this, who carry it out and also bring it into the group. Innovation and change come from people.

marketSTEEL: What digital projects are you currently working on?

Frank Koch: When we think about digitisation, we do it predictively. We have initiated a number of digital projects in which we can act with foresight. Whether it is preventive maintenance, foresight in the markets, forward-looking investments or so-called rapid prototyping. So the question is: How do we get to the point where when a customer needs a new component, we quickly design and produce it as a single piece and then determine: This is how the component is to look, this is how we will implement it together with our steel and the way in which we produce the steel. This means that the development of new products is also based on simulation systems; digital twins are created. We are now able to also simulate our customers' processes for them, if they wish so. Completely new job profiles have been and are being created in the course of these digitisation processes. Plant employees are more and more controllers and decision-makers.

marketSTEEL: Where are the requirements for steel - generally related to the industry - going to change? Will the main challenges come from the materials sector, from politics or from customers?

Frank Koch: From all sides. From politics and also from society. One of the questions asked here is how we produce. In other words, we want to be a good citizen. Everyone wants the factory next to their home not to pollute their air. And that is indeed no longer the case with our production - neither with dust nor with  CO₂ . Our steel production is completely electric.

Of course, customers also have new requirements. In the automotive sector, for example, through e-mobility and other mobility concepts. In addition, an industrial sector or the industry as such  are also very interested in further developing its products. For example, suggestions to interested parties, customers and other stakeholders are made out of our own production facilities. All these groups have an interest in us changing in such way. Seen in this light, digitisation offers enormous opportunities and creates a future.

marketSTEEL: Georgsmarienhütte considers itself a medium-sized company. In your experience, what are the differences between corporations and medium-sized companies?

Frank Koch: As always, there are advantages and disadvantages. A group, in particular a listed group of companies, naturally has potential in terms of the source of its funds, i.e. the question: How do I finance my company? In my opinion, possibilities and the positive processes behind them are pretty much limited to that. After all, there are many advantages to small and medium-sized businesses related to people, processes and organisations. Small and medium-sized businesses are much more direct in their management and much more concrete in their actions, but above all more and faster noticeable in their impacts. If we make a wrong decision, it doesn't take a fiscal year for people to notice. Rather, every decision immediately effects people. Everyone immediately notices whether and what we have achieved. We have this so-called medium-sized gene. We want the latest technology, but at reasonable cost. You may be familiar with this in a similar way with start-ups, this fast and creative thinking: Everything is much more tangible much faster. In a way, it is our ambition to try to think like a start-up ourselves.

marketSTEEL: You spoke of steel scrap. Is your main raw material scrap?

Frank Koch: 100 percent. We only have electric steel mills in our group and our starting material is steel scrap, which is multi recyclable. This means that the scrap is produced at some point and we then use it again and again. We are in a closed-loop economy and generate 6 times less CO₂ in our production compared to traditional integrated smelters based on today's electricity mix in Germany, which is still strongly dominated by conventional power sources. Our goal at Georgsmarienhütte is to be a proactive, sustainable, environmentally compatible solution provider.

The interview was conducted by marketSTEEL with

Frank Koch, Georgsmarienhütte Holding GmbH  

Photos: marketSTEEL

referring to

holistic kann nur als Adjektiv verwendet werden.