An empowering financial solution: How TrakRap became the go-to service provider in the packaging industry
I’m Neli Ivanova, Sales Manager, Industrial Equipment at Siemens Financial Services in the UK. My team developed the servitised finance model for TrakRap, a small packaging manufacturer with a leading sustainability message to tell.
Here, I explain how my team used innovation and a collaborative working style to address the manufacturer’s CapEx challenges, deliver the lowest possible cost of ownership to its customers and help position TrakRap as the go-to sustainable cold-wrap provider for the fast-moving consumer goods (FMCG) sector
For TrakRap, those KPIs were geared towards boosting cash flow through developing revolutionary cold-wrapping machines and, importantly, harnessing the relationship they shared with their customers.
At Siemens, our primary concern when working with a new SME is to facilitate financial growth, even when CapEx is tight. The way we do business and inspire innovation is not by simply selling our services as a standard ‘one to many’ financial model; we work closely with OEMs to ensure they are supported and that their efficiency targets and KPIs are being met.
So, how did we help TrakRap maintain strong relationships with customers when they would typically offer ‘one-off purchases’? With a flexible service-based financial offering.
Securing a stable source of income
Our financial model of data-driven servitisation (or in TrakRap’s case ‘pay-per-wrap’) instantly gave TrakRap’s customers a compelling reason to invest in new machinery.
The basis of our initial financial approach centred around KPIs: what did TrakRap, as an OEM, need to gain competitive advantage? And what did their customers, the end-users, expect from their machine-builders? After several conversations, we found the right financial model for TrakRap and their customers. The servitisation model (called ‘pay-per-wrap’) was different from other servitisation models utilised in other sectors; with Siemens data insights, we would combine the power of performance data analysis with the benefits of a “pay-as-you-go” approach to machinery usage and ownership.
This approach gave TrakRap the ‘always on’ service offering they were looking for. For end-users, the lease costs could then be offset by the savings they made through use of equipment on a ‘cost-per-wrap’ basis. As a result, they get the highest performing machines for the lowest possible total cost of ownership.
This financing option proved to be a substantial ’value-added service’ for the TrakRap team, improving their lead conversion through the use of the pay-per-wrap bespoke solution.
For both OEM and end-user, our servitisation model offered the chance for performance improvements in areas which would never have existed without Siemens tools providing valuable insights.
Performance data made profitable
We were lucky to work with TrakRap, as they truly are a future-focussed SME. The team are open-minded and keen to learn in order to adopt the most innovative business solutions for the good of their own development and the growth of their customers.
Having said this, the financial solution which Siemens Financial Services offered to TrakRap was not unique to them. It is a flexible model in its broadest sense, meaning any OEM can take advantage of the benefits of Siemens data analysis. It is an attractive proposition designed to suit all parties.
To discover more about the solutions provided by Siemens Financial Services, read on here.