What will it take to ensure that this works well now – and even better in the future? To explore this issue, ON TRACK asked to hold a discussion with multiple managers, which ultimately turned into a lively debate. 

In early June, four managers gathered in good spirits in a conference room at VTG’s headquarters in Hamburg: Klaus Wessing, who recently took over as Head of Customer Sales & Solutions; Torben Jaeger, Head of the Bulk Asset Segment, who now also represents the Liquids and Intermodal Asset Segments; and Hannes Kotratschek and Thomas Jussen, who jointly head the Production division. Newly created as part of the TOM initiative, the Production division ensures that everything VTG offers on the market is available on time and at the desired level of quality, including in terms of technology and safety. The Asset Segments are in charge of the existing fleet. Customer Sales & Solutions looks after our customers – and acquires new ones. 

A question to Customer Sales & Solutions as well as Asset Segments: What do each of you expect from Production? What does the market – and what do you – need to work successfully? 

Klaus Wessing: Our employees in Operations are the link to the customer. And, for us, it’s clearly all about customer satisfaction. In addition, we need to be able to tell our customers clearly and reliably what they can expect from us – and then we need to live up to those expectations, too. But you also need transparency. We need to discuss internally which services we can specifically promise. 

Torben Jaeger: I had also made a note of the word “reliably” – and we can definitely underline that. For me, it’s mainly about asset availability – that is, having the wagons and superstructures on hand. This includes maximum availability of the existing fleet, such as by minimizing throughput times. And, as relates to North Star, this also includes acquiring new assets. 

Thomas Jussen: You say “maximum availability”. I think that’s something which really needs to be talked about again – especially since you then have to ask the question about how much it can cost. 

Klaus: I don’t think it’s so much about having the best and fastest availability. Instead, the key thing is having predictable availability and reliability. The real questions are “What exactly do we need?” and “How do we get there?” And the whole thing naturally has a price. We want to be able to give the customer predictable responses. If the wagon isn’t ready as agreed, the customer shouldn’t have to call and ask about its status. We should get in touch beforehand, explain the reasons for the delay, arrange a new time – and then stick to it, too. The goal is to deliver on our service promise. And if that ever doesn’t work out, to communicate it proactively. 

Torben: Getting in touch definitely makes sense, whether by phone or in digital form. But the crucial issue is that we need more transparency overall so that we can plan and prioritize better – including according to what a customer needs at any given time. For example, there are times of the year when some customers don’t care whether their wagons are in the workshop for two months, two weeks or three days.  

Hannes Kotratschek: I’m very grateful for the critical grip on reality, as we’ve occasionally lacked this in the past. Of course, predictability also requires that everyone involved has an understanding of each other’s situation. Communication is key to this – to both external and internal stakeholders.

Thomas: For me personally, it would be interesting to be there with the customer sometimes to learn what they expect from us – and what our competitors do differently. I’d be curious to hear that straight from the source. 

Torben: Yes, it’s exciting to compare yourself to other leasing companies. But what customers are mainly concerned about is how transportation by rail compares to transportation by road. Our point of reference needs to be: “What makes road transportation better?” 

Klaus: I would prefer to ask: “What does our customer want?” We are premium providers. We don’t want to be just as good as the competition. We want to be better. If we can do that, no one will ever ask for road-based transportation again. We need to set the standard for premium service – and then deliver to that standard. 

Hannes: Yes – as long as we back it up with reliable quality. And then there’s the issue of cost efficiency. The customer ultimately answers the question: “Is it worth it for me or not?” 

What improvements do you see with the new Production division?  

Hannes: The first fundamental improvement is that we’re talking to each other – as we’re doing now. In the past, there were a whole lot of individual efforts that were definitely worthwhile and good on their own. But we had different points of view as well as different, sometimes even opposing, goals. Now, we have an overarching awareness that we have common goals and need to work together to achieve them. At this point, the result can’t be measured yet in any detail. But this is the right approach for collaborative service and quality.

Thomas: Now we can come up with a shared understanding of the service promise that we want to make as well as of what keeping this promise can and must cost. That will be an important step. At the same time, we have launched a far-reaching efficiency program in the form of Rock-it. These are a lot of very important measures, but they’re also pushing our organization almost to its limit. Now we need to work through this step by step. 

Torben: But the crucial thing is that you two, in particular, are trying to sort out and reconcile the various goals that have also existed and continue to exist within the Production division. 

Hannes: You’re right about that, and our advantage is that each of us brings our own background to the company. Thomas brings his experiences of being in charge of the workshops, and I bring my experiences from the market as well as with customers and the assets. We are also closely interacting with Stefan Franke, who’s in charge of the Technology department. We are bringing all these issues together. This helps us gain a better understanding of each other’s areas of responsibility and to make the right decisions. We are also noticing this at the workshops attended by the entire leadership team of the Production division. The tenor there is: “It’s great that we’re talking about this together.” That’s not how it was before.

Thomas: Of course, that won’t solve all the problems by itself. But in the last workshop at the end of May, we superimposed for the first time all the different goals we have in the division and openly discussed them. Even the new organizational structure won’t resolve the conflicts that arise from this. But they have to be on the table – even when it comes to formulating our service promise.

Klaus: I don’t have any way to compare because I’m new to my position. But I do see that we’ve started out on a journey. We’ve begun to abandon the silo thinking and to give some thought to the entire value chain. After all, even though optimizing individual silos does lead to optimized silos, it doesn’t necessary lead to an optimized customer experience. That’s why we need to talk to each other and forge even stronger ties between us. But I think it’s great and promising that we’ve started out on this journey. 

Hannes: Having this kind of exchange with our vendors will also be important. Our big challenge is to guarantee the availability of our fleet, and that includes through the availabilities on the vendor side. 

The goal defined in the North Star is the same for everyone, but you all look at it from different angles. What does “assets at the core” mean from each of your perspectives? 

Torben: Let me start, as I represent the Asset Segments. Assets have been the origin and core of VTG’s business activities since 1951. We come from the asset management business, which used to be called “rail tank car leasing.” That is the core of VTG. We earn most of our money with that and the integrated services. Other services – such as freight forwarding, traction and digitization – help us to put our assets to optimum use and to position our products on the market in the best possible way. 

Klaus: I would add that we have formulated an aggressive growth strategy. And it’s clear to us that we will only achieve this growth if we work in a different way going forward. In Sales, we need to be more aggressive about getting our products into the market, and we need to gain a better understanding of our customers. Our Integrated and Enhanced Services expand our asset-related product portfolio, which allows us to offer an all-round package. Rather than being just a leasing company, as before, we are now a rail-oriented solutions provider. This also enables us to stand out from the competition. And that’s exactly what we need to press ahead with. 

Hannes: I couldn’t agree more. Only those who have wagons can also lease wagons – and that’s exactly how those of us in the Production division view the situation. We look after our assets from the very beginning. We develop, plan, procure and organize the construction of new wagons. We take care of maintaining our fleet and preserving its value. We ensure safety and adherence to all the rules and standards. And we do all this right through to recycling and disposal at the end of the product’s life cycle. Everywhere we try to make decisions that benefit the asset, the organization and the quality of the services we provide. The fact is that we earn our money with our assets, so we should also say “Assets at the core.” But the additional services are naturally also needed so that we can make our portfolio and sales channels as broadly diversified and secure as possible.

Klaus: I’d just like to add one thing: “Assets at the core” is where our value creation lies. But we can’t allow ourselves to forget customer centricity. Assets alone are of no use without customer proximity, without catering to market requirements. We need to know the answer to the question: “What does the market need?” And we need to think about that in a very long-term way. Our wagons are used for decades. We need to anticipate today what will be happening 40 years down the road. And to do that, we need to enter into a conversation with our customers. The big questions are: “Where is the market heading?” and “How can we ensure that we maintain our status as the market leader?” Being the market leader is a luxurious position to be in – but it’s also dangerous. The top spot is difficult to defend because everyone wants it. That’s why we need to focus on customer centricity.  

Torben:In a sense, you could say “assets at the customer.”

How do all of you interact and share your thoughts? 

Hannes: We have our regular platforms and meetings, including with employees and managers, that advance our day-to-day business. Especially now, when the environment is changing almost daily, we have enormous growth ambitions. So there are a lot of things that need to be talked about and for decisions to be made about. 

Thomas: There’s no shortage of exchange formats. But there definitely still is some room for improvement here and there in terms of the effectiveness with which we sometimes design them. 

Klaus: But the decisive factor will be shared solidarity. We have stopped thinking in hierarchical terms, treat each other as equals, and are trying to find solutions together. And I agree with what you are saying, Thomas. We have plenty of exchange formats – in fact, perhaps too many. But the important thing is that we are talking to each other in the first place, like right now.  

Hannes: And then we need to move from talking to taking action.

Torben: And we need to make sure that the example we are setting here is passed on, too – that the kind of exchange we have here on the management level is practiced on all levels.

Changing the company’s culture is obviously also an important issue …  

Hannes: That’s the most important thing by far. We need to move from coexistence to togetherness.

Klaus: The biggest challenge here is that we have been and continue to be very successful in business terms. We are market leaders, so some people might not really understand why we should change. We’re doing just fine! But it will only be possible to carry our past success into the future if we work differently. With this in mind, it will be very crucial to do some rethinking. If you don’t change, you become a dinosaur. And, as everybody knows, they eventually went extinct. 

Is there anything else you would like to share with your colleagues? 

Hannes: For us, one of the urgently pressing issues is the need to recruit new employees as quickly as possible so that we can continue along our growth path. That’s why it’s important to keep underlining that we are the good guys. When it comes to fostering environmental protection, sustainability and lower resource consumption, everything we are doing is very positive compared to what many others are doing.  

Klaus: We are a “hidden champion”. The opportunities that we have in the rail transport business to lower our carbon footprint aren’t available to the same extent to the road transport business. And this needs to become even more apparent so that we can use this fact to attract university graduates as well as apprentices.

Thomas: To me, it would also be important for everyone here to realize that they are making a contribution to the big picture – that is, to VTG’s success – no matter where they work in the company. We are also trying to convey this fact during our visits to the workshops. Everyone should feel that we are serious about our vision of expanding our fleet to 160,000 wagons. And they should know that if we initiate measures here to become faster, it’s not to upset you, but because we assume that twice as many wagons will be rolling 10 years down the road. So, we need to get ourselves in shape, and everyone needs to be on board. We are striving to create the right framework conditions for that.