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SUMMARY KEYWORDS

SPARETECH, inventory management, AI integration, ERP system, CMMS integration, spare parts optimization, strategic procurement, ROI, data accuracy, automation, supply chain, cost savings, supplier database, asset management, industrial innovation.

00:00

00:35

Welcome to the Industrial Talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's go all right

00:53

06:12

Thanks Scott for having me. Well

06:15

after a couple of technical difficulties, on my end, I'm quite embarrassed talking to a technical wizard like you, Chris, your next level. I'm, well, I'm still sort of Commodore 64 you know, computer level.

06:30

You got the good setup there, though,

06:35

when I, when I went down this road to said, Hey, I'm gonna, I'm gonna podcast, and that was for another company, for my other company, and I said, I need to open doors. I need to be able to have conversations with prospects, and then also make my customers feel good about themselves and have a conversation and elevate their what they do. And remember this vividly. So you go down the road and you're saying, all right, what mixer do I need? And you're just all just on Google, and you're trying to find and at this site, it was about eight years ago, so about there wasn't that much on there, as much as it is today, right? So I'm scouring the internet and come up with a mixer and a mic, and the reasons why, and then I had to connect it. And I remember that when I bought this mixer. And of course, the mixer itself, they've changed. The mixer itself had piles and knobs and things that. And I remember when it came in and I opened it up, I thought it was going to throw up. But nowadays it's easy peasy. It's, it's, it's user friendly, man, and so you don't have to worry about getting go right Mike. They already have the mic and get the right mixer there. Oh, good. It's easy. Plug and Play,

07:50

shake it easy for the people, right? I mean, that's what it's all about.

07:54

That's what SPARETECH does. We make it easy. How you say, Did you see how I segue that that was good, very nice. Well, yeah, all right, before we do get into your company, and the professionals in your company, give us a little background on who Martin is, and then we'll dive right in.

08:13

Yeah, happy to yeah, as you said, based off G carmenol, but as you can hear from my accent, originally from Germany, so actually, born and raised in Germany, have my, my first job, actually, at Porsche, the car maker, where

08:28

you doggone it, you should have prepared me for that one. We should have had that conversation offline. So I wasn't so dazzled, dazzled.

08:38

So, so my first role, actually. So my first role was to build up the new factory for one of the Porsche SUVs. And so this is where I got, you know, to learn a lot about the this beautiful spare part industry and emerald industry. And yeah, this is what got me excited about it. And then, you know, pursued my my passion, therefore building an old business, and moved to Chicago about a couple years ago, and we're building out the US operations for

09:09

that's a heck of a story, which is really interesting. Quite frankly, it's like, you're, you're with a premier company, Porsche. That's, how do you say it? Is it Porsche?

09:20

Porsche. It's so in in Germany, you would say, I work at Porsche, okay, but I know for you know, I know in America, you know, for our American listeners, you know, Porsche

09:36

needs an f1 car.

09:39

Yeah, think I'm not sure if they are trying.

09:43

They're not invested out.

09:49

He said, Come on. I know that's up. That is so incredible. So let me ask this question about you just starting. You venturing out on tell us a little bit about SPARETECH. What, what problem challenge did you see in the market that said, Hey, I could fill that role, right?

10:08

So I think one of the and I just out of own experience, so when I was working manufacturing, you know, at Porsche, we had like, a huge, you know, huge factory, huge amount of assets, and it's really like high automation there. And as you know, right, all these machines come in, and you can ask yourself, Okay, how do we make sure that, no, they don't break down? And how many spare parts do we actually need for those? And it's just a very complex task to understand what parts do I really need. How many should I be having on stock here, and how many should I buying when I actually meet them? And I, you know, just got really excited about this opportunity, because it's very data driven, and a lot of times, like the people actually deciding they don't have the right tools, you know, to evaluate that. And that got me really excited. And, you know, it's just a very, very complex problem to solve. And you look into the industry today, you can see like, how many spare parts are just sitting there with no usage, being thrown away to landfill, and, you know, just a lot of opportunity.

11:09

How do you even begin to take something like Porsche and the level of automation and the and the logic behind determining what spare parts and what needs to be available. But how do you, how do you even begin to dive deep? How do you, I don't know how you do it. There, good.

11:32

I don't know how you do it.

11:34

I mean, the interesting thing was, back in the day, the my manager asked me, tasked me to do it right? So I, I I was, so, you know, I was hiring like 10 contractors or so, and they would work through, you know, all these Excel files, all these documentations, kind of not really trying to figure it out themselves. And it was basically, it never ended, right? It was never good enough, because it was all manual, right? So, but this is really where I researched on the market. I was looking for a couple of years, actually, for solutions out there, but that, you know, it doesn't, didn't exist, and this, this was meeting

12:15

the level of the level of sophistication. So with that you're looking at a situation, you're looking at a company, you're looking at their need to be able to achieve that optimum, optimal level, whatever that is, right, more or less that this is where we need to be take us through, just generally speaking, on, on the process of how you would help a customer or client, manufacturer or whatever, to begin that journey without, without having their ears start bleeding and their head fall off.

12:52

So I think the first kind of, you know, the first kind of scoping that we do, and just to set it straight, like we usually look at, like, no large corporations, which have, like, maybe multiple factories, you know, they have a lot, like, a larger footprint within the states or internationally. And a lot of times, what we would do is really, at first that, you know, they do have an inventory management system in place, right? So they will have, like, an SAP, an ERP Oracle, whatever it is of some kind. So the first thing we would really do is pull that data from them and just basically telling them, what are the parts you have there? Because that's really where it starts, right? People don't know what is that part. They might have the same parts located in the same facilities without knowing it. They might have the same parts across facilities without knowing it. So that's the first thing we help

13:43

so you audit. You have to audit exactly.

13:46

You have to understand what where you actually at, know what you have is how we call that right, really, understanding what do I have? Because you cannot plan for how much you need without knowing what you have and what kind of the consumption patterns of those parts are over time.

14:01

So you go down the road and you're saying, Okay, let's see what we got. Let's, let's do an audit. Let's figure this out. And you have Part A over here, and hey, look at that. Part A was over here too. But right, do we really need Part A, or do we need to get bullshit of Part B and so on and so forth? That doesn't happen overnight. How long? And of course, it doesn't happen overnight. And depending on the size of the company, it could be a lengthy process. Do you as a company, as a as an inventory Sherpa, you can use that, by the way, just it's be able to keep these individuals engaged, and I'll tell you why. Every time when I ever did a system implementation, there was always that conversation around cleaning historical data, right? How long that happens? It takes about a week and a half before everybody just says, and I can't do it. How do you keep people engaged and saying, We got to get this right, and it has to be right.

15:11

Yeah, I think one of the core principles where we started. So first of all, it's a software right? So what I did manually with 10 people, we're really trying to automate a lot of that, which is important basis. But what I always tell people is you first got to stop kind of the mess that you're creating on a day to day basis. So the first thing we basically do is just make sure that every new part that they buy on a daily basis gets audited before they buy it, right? So you actually make sure that everything that's happening from here is is basically audited, is clean, and you don't create additional kind of cost and waste, right? And then, and then you kind of burn down the old stuff. And you know how we usually would do that? We would categorize it into, like, what are the most critical parts? What are the most highest value parts, what are the parts that are not moving? So we kind of break down the big, the big elephant, into pieces, and then, you know, kind of working through those top categories. And then at some point you you kind of have the, you know, you had a point where you have worked through 80% of your parts, and that's good enough then, right? So that's how we approach it. So we really try to kind of stop the stop the same thing from happening, stop the bleeding, and then, you know, clean up the old stuff,

16:30

yeah, but I live in the real world, and then I guarantee you, that's a change management approach. You're saying, hey, hey cowboy, stop ordering stuff just because you can, because you have the button in the power of the button, stop ordering and let us make sure that it's it's a justifiable expenditure. Yeah, you know as well. How do you do and I just, I, because I've been down this road with with a situation where I have my own sort of warehouse that I keep all my special little spare parts that nobody knows about over here, they cut them away. You know that exists, right?

17:17

It always does. And you but you know, Scott, the thing is, what I because I've been, I've been there if you are responsible for that line going down and you don't have the part when it's needed, you know, it's not, what are you doing? Obviously, right? You will always optimize for having it. So it's like, that's what I always tell we need to, you know, we need to bring the people that make the decision on a day to day basis into the change. And how do you do that? You help them on a daily basis. And one of the things our software does tremendously well is you can enter any form or way of describing a part, and it will tell you if you have that part already or not in, where exactly it is. It's like one of the most powerful kind of search and identification features in its spare part. And that really helps them, because they don't just, they just look, hey, I have that part here. How can I quickly find it? And you know, we help them with that tremendously.

18:18

So let's, let's look at it from a structural perspective, right? I'm a company. I have an ERP. Every company has some sort of behemoth ERP. I also have a CMS where I'm managing my assets. Over here, those two theoretically talk like their interface somehow, whatever that thing is, and so it's, it should be flowing and all that good. How does SPARETECH, where do you sort of plug in? Where's, where's that API that says, yeah, right, over here, you know, yeah.

18:56

So our, like, proper and most relevant use cases actually, as exactly as you said, European exists, and the CMMS exists. And usually within the ERP you have, like, kind of an inventory management that is built into that, right where you have all the parts, you have your min and maxes, and you have all that good stuff. And that is where we integrate into, usually the CMS, then pulls this part list, and, you know, attaches it to the equipment and so on. So you have a proper kind of, you know, digital twin of equipment down to material level. And that's really how we see it. Some of our customers will work with us on the CMMS level, just if their ERP is not like the true source of truth, but they rather work in the CMMS. But I would say, like 90% of our customers, we integrate into ERP, and then they pull that data into their CMS from there.

19:47

Okay, so I'm, I'm feeling pretty happy about my relationship with you, and I have my systems, my technology stack, and now I have greater visible. Ability. That's cool. I want that. I want to be able to sort of make sure that I'm not spending money where I don't want to spend money, and make sure I have the parts where I need to have the parts and available. What are we talking Data Wise? What? What? What efficiency gains, where, bottom line value. It's not an expense. I want to know how I am benefiting from this?

20:22

Yeah, so I think what, what's very clear today, I think, more than ever, is that no one will buy software without getting an ROI on it. I think that's something that

20:34

hard, dollar, hard dollar, not just, you know, fluffy, pink elephant type of saving.

20:42

And I think that's one of the requirements when we are in a, you know, sales engagements, actually, that we get to see the full data of the customer, to able to tell them, hey, you know, what is the true dollar saving that we can generate? And and we usually bucket it into into three areas, right? So I would say the first one is really your your inventory levels and how much capital you have, you know, bound up in your balance sheet, right? So really the inventory value, and I mean, this is, you know, pretty obvious you are right sizing your inventory, right? You try to find efficiencies between the plans you know duplicated parts that you can use more efficiently you're not buying based on better data and knowing availability of parts you might be buying less than you would if you don't have that information. So that's like true, let's say inventory value. And the second thing is actually that we have a database around 40 million parts, where we also show suppliers for all those parts that are available.

21:50

You're just saying you have all of the supplier of information associated with the parts. So this bolt, here's a supplier you

21:59

Exactly, and that's, that's kind of our unique pieces, actually, that we have that catalog in the background. And, you know, we started with a million parts, then we got to five, and now it's kind of really accelerating. Now we're more than 40 million parts, and that is like having, like, the true manufacturer product, and then all the suppliers where you can buy it on the market. Yeah, that's one of our core kind of USPS that sets us apart globally. Yeah. We're very strong in Europe, in the US, those are our two, you know, key regions, I would say in Asia, not as much yet, but we're really strong in those two

22:37

regions. Yeah, yeah. That's number two, yeah.

22:41

23:12

that that's phenomenal, that I can see that. So, okay, so now, now what I have is I have, I'm dialing in my my inventory level, and I have the right part on the shelf right right there, and I'm lightening up my balance sheet. I'm doing some good stuff right there. Then I have all the vendors I have. And it just pretty much has everything and and you're able through, through your technology, give me sort of like, now you need to go to Acme vendor, because they're selling that bolt for 20% reduction, and they have a good rating, or whatever the metrics are, right?

23:59

Especially, when, when you have, like, a very kind of distributed network, right? And you see different plans are buying the parts for different prices, right? And that's really like an immediate kind of, you know, wow, moment when you see, all right, we actually have five times the same part. We're buying it in five factories for different prices.

24:21

But Martin, I, I see that bolt over there. I see the bolt, and it's, it's 20% cheaper, but I have a logistics component, because I got to get that bolt over here. Are you looking at that too? I mean, yeah, you got to park it my property, right?

24:38

And, I mean, that is when exactly you talk about, like, Strategic Procurement, right? So, like, your procurement team will need to understand, what are we buying from, like, national distributors? Where do I have my local, like, mom and pop shop that can get me that part, you know, within a day, and that's why I like to pay 30% more, right? Those are, like, the kind of decisions our customers make. Based on our data, where they either optimizing more for that hot dollar saving or the availability of parts, right? But that's something we can surface as a kind of for decision making and what our customers act upon.

25:13

I gotta tell you, there's so much inefficiency that can be gained driven out of that whole flow. I'm really bullish.

25:27

And I think one of the big things that I'm sure you've seen this in your career, Scott, is like, when you know you take a new equipment and you're actually putting it into your factory a lot of times, whoever provides you this equipment, they have a pretty high incentive to sell you those parts and on after sales package, right? Yeah, so, but a lot of times what would happen is this is basically just an Ellen Bradley part, which you know, some you know, Sheen builder sells with like, a two or 3x markup, and what, what kind of data we collect on the shop floor, is actually that this is an Ellen Bradley part where you can actually buy directly at the manufacturer, rather than, you know, spending too much at those, you know, line builders as an example. So those are like very concrete saving opportunities we usually

26:21

see Shannon and the reality is, as I look at your your form, how does AI enter into your your vision here with this solution, what are you doing?

26:35

So I think one of the one of the big things, so there's a lot of data involved, it's Yeah, right. So our customers, our customers will have like 50,000 maybe 200,000 our largest one is like 2 million spare parts globally, right? So that's like, that's a lot of data. So where you can use AI is to really generate, for example, standardized short descriptions for those parts. You know, nobody needs to sit there and have, like, a taxonomy where they need to pull, you know, some abbreviations or so you can, like, auto generate all of that, and then at the same time, you still need to make sure you give the AI the right context so it's accurate. Because the biggest problem in spare parts, what you don't want at all is inaccuracy, right? And you know, like there is, like, many ways of an engine being described, and it could seem like it's the same one, but it's very different, just because the serial numbers is different, right? So you need to be very careful with AI there, because it needs to be accurate. So we are basically using those 40 million parts for the AI to train on, which gives us much better accuracy on spare parts. And this really is, you know, has been a tremendous learning, really, for us, like how much automation we can do with that.

28:00

All right, so I've touched upon a lot of stuff here, and I need to know, don't say 18 or 16 or 18 months, because apparently every time when you have a system implementation, it's always 18 months. I don't know why, but it is how quickly can I get up and running? I've got my ERP, I've got my CMS, or, you know, asset performance management software, whatever it is I have my technology stack, then all of a sudden I need greater, greater clarity into my inventory spare parts out. How quickly can I get up and running and just, you know, experience the benefits of your solution.

28:43

So the and, as everyone says, right? API, no problem that goes really easy, right? Yeah. You know, we have all been there. So I think a very kind of true and authentic answer to that is what we always tell customers is, you know, make sure you give us the data that you have in there right now and start doing that manually for the first three months to really accelerate the value creation. Right? If you, if you come in and the first thing you start to build is an API that's going to take you, like, six to eight months before you see anything, right? So we usually try to really start with manual data extraction for the first, let's say, six months of a contract, and then we have proven enough value so that the IT department and everyone on that corporate side buys into a full integration. So I would say, after those six months, we have seen the ROI of year one already, which is very common, because you can, just like, you know, really double down on those savings that we discussed earlier, and you can prove that that you have them. And with that, we then go into full implementation. We did have a pretty big global rollout of 300 factories this year, and we did 300 Factories in one year from Europe.

30:03

Yes, do the math on that, if there's 365 days in a year, then you got 300 fat

30:09

that's a lot of work. That was there was the most insane thing we pulled off so far. But it was really like quarter one, we did Europe and US. Then we did South America in quarter two, and then we did Asia in quarter three. And then, you know, whatever was left in q4 it was pretty, pretty intense.

30:28

Yeah, they rolled out. They said, Hey, can you do this? And of course, you're Martin. And you said, Yep. And then you walked away, thinking, Whoa. Now, what do I do? Hey, here's your last question that I want to pop at you. It sounds great. I see the value. Makes sense. What are the what are the roadblocks? What, what kind of human roadblock Are you dealing with here? Saying your system, I don't, I think you're full of it, that type of thing. Yeah.

31:00

So I think one of, I mean, one of the things is, people could argue that you know what you're doing right now works, right. So why would you you have an ERP, MMS, right? So what is your urgency? But what we've been seeing a lot during, like, actually, the last couple of years, that is the pressure of margins and just to find ways of saving money has become so important for, you know, thin margin industries that they're looking for every dollar that they can save. So that has really been a, you know, kind of a big uplift to that roadblock. But like, just keeping the status quo is actually the biggest thing we need to overcome, I would say. And and then secondly, I think what a lot of companies really underestimated, that this is a multi year program where you need to really get your people involved, and you need to get the factories involved. And if you think that's going to come top down without bottom up, like support, it's not going to work. So we really want to make sure that everyone that uses this on a day to day basis, loves it, and this will drive into the adoption,

32:06

you know, yeah, and that CEO, that executive, better support it. It makes sense. It does Don't. Don't doubt me on that. All right, Martin, how do people get a hold of you as we wrap this up? So, hey, I want to talk to Mark. You say I'm out on LinkedIn. If you are,

32:26

yeah, exactly I am on LinkedIn. So Martin Weber, SPARETECH is a good way to get hold, but then also you can go on our website, and that's www, dot SPARETECH.io, which is, you know, a nice website which gives you more information if you put in a demo request there, and we'll make sure to get back to you as soon as possible. Otherwise, connect with me on LinkedIn. There it is.

32:49

He's Martin. He's amazing. You can tell he's got a lot of stuff rattling around in his head. He knows a lot more than I do. That's that's for sure, which is not a big Martin. It's not a big hurdle. Knowing more than it's not much of a anyway, we're gonna have all the contact information for Martin out on industrial talks. Stay tuned. We will be right back.

33:09

You're listening to the Industrial Talk Podcast Network

33:19

about Yeah, he delivered. Yeah. You need to know more about SPARETECH. You need to connect with Martin. You will be a better person because of that. I'm a better person because of that connection. He's a good guy, and I've already interviewed some other individuals within SPARETECH, culturally, they're good people. So reach out, find out more about Team Spirit tech. You need it, especially today. I can't argue against that, all right, I was on my soapbox. Do not hold back and put together a podcast. Don't, don't delay. It's not that difficult. And, and the return is great, and, and you have time, and we can make this happen. You need to succeed. We're here to help. All right, be bold. Be brave. Dare greatly. Hang out with Martin, because you need to, and you'll be changing the world. We have another great conversation shortly, so stay tuned.