The revolution of polymer trading: how Meraxis drives digital innovation across their ecosystem
Working sustainably with plastics and recycling – that is the goal of the Bern-based company Meraxis. Michael Grysczyk, Head of Digital and Disruptive Business at Meraxis, explains how he tackles digital and sustainable change together. In the interview, he talks about the importance of digital technologies for the business strategy and why a digitalised polymer supply chain is an important driver for sustainability.
Meraxis is a relatively young organization, established in 2019. Your core business is polymer trading, or raw plastic in layman terms. What is the role of digital for Meraxis?
Well, there are many different aspects to consider here. First of all, I have to point out that Meraxis is a B2B firm, trading polymers and polymer-based products. In contrast to much of the consumer digitalization we see on a daily basis, B2B business is totally lagging behind when it comes to digitalization. On top of it, the polymer industry is quite a conservative one, and lots of physical paperwork is still very common. We still live in a world of physical meetings, telephone calls, and unstructured chain emails, especially in contact with small and medium enterprises. And there is not a lot of digital sales services, automated processes or even e-commerce solutions implemented in this industry yet. Many things are done manually, because few people see the urgency to change. So, when we founded Meraxis, our executive board was very well aware of this fact and consciously positioned the company as a main driver for digitalization and sustainability in this industry.
How does that look like in practice? How do you integrate digital into your business?
We decided to structure our digital ambitions around two different perspectives. On the one hand, we have the operational excellence perspective, which includes all of the activities regarding optimization, automation, and the introduction of new processes. The main target of this part is to improve efficiencies with mostly incremental innovations.
And the other hand we also pursue the radical or disruptive innovation perspective, which is the focus of my team and all the colleagues and partners involved. Here we see digitalization from the perspective of an opportunity to differentiate our company from the competition, adding value for our customers through digital services. This also includes developing and launching digital business models.
How do these two perspectives go together? What is the overall strategy behind?
In reality, these two elements are tightly aligned. For example, the disruptive part is mostly somehow connected to the current business and therefore has to be aligned with the relevant departments. Our recently launched customer portal is directly connected to our ERP system, to our logistics systems, and so on. There is a lot of effort going into planning and making sure our digital initiatives form a coherent whole.
How do you balance between radical innovations and operational excellence, is there a prioritization process?
Fortunately, we have really a strong commitment from our management to think long-term. Of course, efficiency initiatives bring faster effects, but to be competitive in the long run you need to diversify your portfolio and also nurture more radical or disruptive innovations. Strong management commitment is really key in this case. We follow the widely used industry rule, which splits 70%, 30%, and 10% when it comes to prioritization and allocation of resources. 70% are the incremental ones, means improving the core business. 20% is enhancing the core business, and 10% is being disruptive, i.e., developing new business models that are not directly connected to our current core business.
Meraxis aims to disrupt and digitally transform the whole polymer industry. Are there competitors with similar ambitions?
That is a really important point for us. So together with our management, colleagues and some external parties we held so-called ‘nightmare competitor workshops’. The idea was to come up with ideas, who could be a nightmare competitor and who could overtake our business. And yes, there are already some start-ups and platforms coming from outside of the industry.
Especially when I think of the recycling business, there is a lot of movement. Recycling platforms want to take over the role of a trading or distribution company. We don’t see it that urgent because their numbers are still very small and they are more focused on fast business, rather than on long-term relationships. And in B2B, many things work with long-term relationships. Nevertheless, we continue to keep an eye on this and constantly consider how to position Meraxis in order to be prepared.
Can you tell us about some concrete digital initiatives you are working on?
We really wanted to start with the biggest customer pain points. In our industry, other than what we are used to in consumer-facing industries, there is no easy availability of information. There are lots of documents: the delivery information, all the tracking, the market information, the contract information. It’s all scattered and not readily available when you need it. So last year, we developed a customer portal that has all information in one place. This was a good starting point, because the pain was the highest, and it allowed us to create a sort of baseline for future digital projects, now that we have all the data ready and accessible. And this year we extended the portal to an e-commerce solution. Our existing customers, first of all, can now place their orders, plan the deliveries, confirm their orders or make changes to their data in the online portal. They can also negotiate via the portal if they like.
This sounds quite ambitious. How do your customers react to your digitalization efforts?
Absolutely, sometimes we have to work hard to convince our customers to try out something new. If a purchaser of a company is used to do it a certain way, if our business has been done in the same fashion for the last 20 years, it’s not that easy to get them to try a new digital tool. So actually, it depends less on the company, but more on the people that work at the company. But at the same time, we do see a new generation coming up, purchasers that are willing to do something new. With this firms we take the opportunity and drive the change, and at the same time we keep on trying to convince the others with the benefits that our digital tools create.
What are some future digital initiatives for Meraxis?
We are already planning the next steps, meaning doing purely digital sales in new markets. Right now, the sales are still mostly done through calls, through meetings, through emails and so on, but not via a digital platform or tool. We are trying to roll this out for new markets, where we have little or no business today. So, we have nothing to lose, we can only win and learn. In a different project, we want to optimize the material recommendations for our clients, based on data analytics and recommendation systems. So yes, many exciting digital projects are going on at the moment.
Today we are facing a global challenge with climate change and increased attention for sustainability. How do you at Meraxis deal with such a challenging environment?
We are trying to address this head-on, and digital technologies play a major role in our efforts to increase sustainability of the polymer trade as a whole. One way we engage with this topic is that we are trying to be a one-stop-shop for the industry. In our industry, traditionally, there are prime plastics producers and then there are many small recycling companies, so you can either buy here or there. We want to combine these two streams so that we can offer a variety of plastics through the same channel. In terms of digital, we want to offer the right material mix based on the customer’s needs and applications. Because right now it’s often just a trial-and-error process. Polymer converters try to find the right material alternatives, they order some samples from many different companies, and then basically try them out. This has to do with the fact that recycled material is somewhat volatile in terms of quality, there is no real standard quality.
How do you use digital technologies to solve this?
With our position in the supply network, we have a good chance to control the quality of different suppliers and partners and put all this data together in a database. Based on this, we can then help the customer to select the right material mix, create a better quality in their products and also have a more stable material flow. This is good for the suppliers as well, as it translates to regular and plannable business. We expect that requirements for recycled material will soon become a part of industrial regulations, so we are working hard to be best prepared for this development. It’s all about leveraging the data across the supply chain.
Since this year, Meraxis is part of the IDTM partner network. What’s the next «big thing» we should have on our radars as educational institution?
What we can see is that the combination or interface between digitalization and sustainability is one of the most important growth topics at the moment. This also reflects the highest need of society. So how can digitalization help firms like Meraxis to become more circular and to be more sustainable? This is clearly priority number one for us. Second, I’d say the digitalization of B2B firms and industries is still very much in its early stages and needs a lot more work to be done in the near future. While B2B companies might not be so well-known among students, they may also be encouraged to make a career in these hidden champions. This is why we are happy to be part of academic-industrial collaborations like your IDTM partner network, to launch common projects, share experiences, and maybe find some future Meraxis employees among your talented students.
About the person
Michael Grysczyk is currently head of Digital and Disruptive Business at Meraxis. Originally from Germany, he studied technology and management at the Technical University of Munich and gained some first experiences in the automotive industry. Before he took up his current post, he was executive assistant to the board of Rehau, a tier one supplier to the automotive industry and Meraxis’ sister company, and Project Manager in the field of digital innovation.