FTR Unthreaded:  Würth CEO Daniel Schmidt

00:00 — Produced show ID

[00:00:00] Speaker: It’s Fully Threaded Radio Unthreaded Hi, everyone. Erik Dudas here. This unthreaded edition of the Fully Threaded Radio podcast is a conversation with Daniel Schmidt of Würth Industry USA, where he serves as CEO. Daniel made his way through the Würth Apprenticeship Program in Germany over thirty years ago, reaching his current leadership role at the helm of a billion-dollar-plus industrial organization. And during this conversation, you’ll learn how he did it and hear about some of his stops along the way. He shares his thoughts on the direction of industrial distribution, how emerging tech, including AI, is being managed at Würth, and what happened with Würth Additive. You’ll also get an idea of Daniel’s mindset and philosophy of life as he explains some of the chapters of his successful career story, and there’s a little fun in there too. We compressed quite a bit into this segment. It plays at just over an hour long. Fully Threaded Radio is made possible by our partners, our title

01:00 — Opening sponsor acknowledgement

[00:01:00] Speaker: sponsors, Linfast Solutions Group and Brighton Vest International. Fully Threaded Radio is also sponsored by Buckeye Fasteners and the Ohio Nut and Bolt Company, BTM Manufacturing, Eurolink Fastener Supply Service, Andrews International, the FCH Sourcing Network, Global Fasteners, InSQL Software, Fastener Technology International, Jlan Franco, MW Components, 3Q Inc., Cressa, Volt Industrial Plastics, and of course, Würth Industry USA. This is a fast-paced discussion that I know you’re going to enjoy. We recorded on September 28th, 2026, and Daniel spoke with me from his home base in Greenwood, Indiana. Here now is my conversation with Daniel Schmidt. Daniel, it’s a great honor to speak with you. Thanks for being here. Thank you very much for having me, Eric. You know, Stephanie sent over a few thoughts for me in preparation for this

02:00 — Feature conversation

[00:02:00] Speaker: conversation, a little bio info, and the very last thing on that rundown caught my eye a lot. You know, on this podcast we say that we’re predominantly fastener related, so we get off the subject a little. She mentioned some of your interests, and they include golf and basketball, fishing. Well, as soon as I saw fishing is the last thing I knew I had to start off with that, Daniel, because that’s a subject that we have frequently diverted onto on this podcast. Tell me about your fishing. Well, there must be a miscommunication in there because the fishing interest I’m having is only because my oldest son, he loves fishing, and I don’t know where he has gotten it from because I’m the worst fisherman- which probably lives in the US. And he also then actually brought this, his knowledge, uh, to my daughter and our middle son, who is 17. The daughter is 13. So they are big in

[00:03:00] Speaker: fishing and love it. I’m, to be honest, yeah, uh, I try to be more on a golf court or on a pickleball court. Um, fishing is… I like to watch it and have a beer when they do it, but that’s all. Okay. Nothing wrong with that. I completely understand it and Stephanie probably knows that you, being the good father that you are, support your kids doing what they love. And I have to tell you, that’s exactly what my dad did. He was a corporate executive who may or may not have really cared about fishing, but he really helped me to develop my love, and I always will appreciate him for that. I’m sure your kids do, too. Yeah, which also is a very big difference when it comes to the US and, for example, Europe or Germany in particular, where I grew up and were born. Because in Germany you cannot just go out and fish somewhere. You need to be a member of a club, an active member, otherwise you are not allowed to go fishing anywhere.

[00:04:00] Speaker: I’ve heard that. I’ve heard that there’s a really brutal, like a full written test you have to take, too. Is that true? It’s exactly true, and there are long waiting lists to become a member because they not have enough areas where they can allow the members to go fishing because everything, I would say, is very over-regulated in Germany in some regards, which, um, is very often difficult then for younger people to experience more about the nature, the wildlife, going out. Uh, it’s the same with hunting, and this is one of the things I really appreciate here in the US, that you have much more freedom when it comes to the outdoors and activities like this. It’s very, very interesting. Yeah, I don’t think many Americans fully appreciate that. And, uh, you know, I have to say one other thing about this general topic, and that is I’m kind of relieved to hear that you’re not a hardcore fisherman because

[00:05:00] Speaker: up until very recently, Daniel, I have always held that you should not trust a man who claims to golf and fish equally well. But, but I never claimed that I golf very well. I, I, I try my best and if I’m breaking the 100, I’m a happy guy. Um, but, uh, that’s as far as it goes with my golf skillsets. Fair enough. Yes. I think you’re in good company there. Well, I have so many questions for you and we have limited time. I could talk about fishing or golf the whole episode really here, as listeners know. But there have been major developments since you took the helm at Würth, Würth USA that is, and, uh, we’ll touch on some of them. And then also I’m very interested to understand how you are viewing this incredible, unimaginable era that we’re now living in. The future is emerging all around us. So it’s hard to talk about any of these things without

[00:06:00] Speaker: really it all being baked in. But let’s start by discussing how you arrived in your current role, and formally that’s senior vice president of the Würth Group and CEO of Würth Industry USA. Let me ask you this to begin. When you first started with Würth in 1995, did you have a leadership role envisioned for yourself? No, not at all. And to be honest, um, when I applied at Würth after high school in 1995, I wasn’t really sure what I wanna do with my life. Because when you are 20 years young, uh, I think most kids struggle that they don’t know what they wanna be. But I was then very fortunate to be in a company, um, which I really liked being around the people and, um, doing this apprenticeship, which is kind of a rotational program, uh, for two and a half years where you see all the different

[00:07:00] Speaker: departments and, um, that gave me a lot of perspective what happens in a larger company. And you could find out during this time, are you more the sales guy, more the operations guy, more a warehouse guy, a, a finance guy? And, uh, that was helping me a lot at the beginning. Can you put your finger on what was it about Würth at that time that you really enjoyed? The people and the leadership 100%, and the culture which was driven by the Würth family, uh, at that time and today. So, uh, I know it sounds for a lot of people like, um, maybe a little cliché that it’s kind of feels like a family, but I actually always had the feeling that it’s kind of a family, an extended family. And, um, also my boss, when I ended the apprenticeship in 1998, uh, he basically… It’s the same boss I’m having

[00:08:00] Speaker: today after 31 years Um, which is kind to see to have kind of a mentor in the business who is supporting you, who is helping you, who is challenging you, and at the end of the day also who brought me, well, and the family all around the world now in selling screws, nuts, and bolts. Oh, I love this story. You know, over the years in speaking with so many people in the fastener industry, my favorites have always been guys who are just out there slugging away, and they just rise up. You know, you don’t have to come out of the University of Mannheim and go right into a six-figure job. You’re just busting it out, you know? Yeah. Exactly. So walk us through then, uh, y- obviously you found yourself in a sales role and that was what you were good at and what you enjoyed at that point, but you went a long way with that. I mean, how did you parlay that experience into going to Asia and then Australia and all that? Put it together for us. Well, I started in inside sales,

[00:09:00] Speaker: then I actually wanted to become a key account manager and, um… but the requirement was to have a bachelor or master degree, which I was obviously not having after high school. So a week later, um, I quit my job at Würth and started going to the university, um, and at the same time worked part-time still at Würth, and then after three and a half years university, was coming back and started as a key account manager. Took me a little bit longer, uh, but also was a good lesson. And then, um, well, being in different sales roles in Germany and in sales management roles and at some point I had a dinner with one of our largest global customers, and there the responsible person said, uh, he was a VP at that time, he said, “Well, uh, we are always talking about

[00:10:00] Speaker: global and local and what we need to do, but very often we have problems in Asia, um, in our relationship.” And after coming home I was like, well, we can always say and complain about the colleagues in other countries or, uh, we can do something to get better and to support each other. And, um, well, I talked with my boss on the next day and a week later my wife and I were on a look-and-see trip to Shanghai, China, and four weeks later I was sitting on the plane and staying, um, for the next four years in China. My wife and the kids arrived a little bit later, um, but, um, was going then to China to actually support the colleagues and do a change management process, a restructuring in China, and, uh, that was an unbelievable great experience during this time. Yeah, I can imagine. That must have been a huge learning curve for you Yeah, and

[00:11:00] Speaker: also a cultural experience, I would say. Let me ask you this. During that time, you must have been very effective in your sales role to get that bump up. How did you manage your time during that period? In other words, time management is a huge discipline to succeed, really in any area of life, but especially in sales and management. How did you approach that? Well, for me, 30 years ago and also today, I have the philosophy, right or wrong, that whatever is on your calendar, if a customer is calling and wants to see you and spend time with you, the customer always comes first, no matter what other meetings are there on the calendar. And that actually helped me to always have the right focus because, well, we all know we only have a company, we only have a job, we only get paid because we have customers which need us, which wanna work with us, which

[00:12:00] Speaker: partner with us, and that’s where I see my responsibility. It doesn’t matter if you are a sales manager, a salesperson, or the CEO, that, um, the customer and our employees always come first. And that also was helping me in time management because at the same time when you are living with this principle, you avoid a lot of internal meetings which very often it’s good that you are not attending them. Well, it gives you a good excuse to step out. Yeah, I get it. Yeah, and also sometimes it’s much better if the colleagues are handling the meetings, and that you don’t have too many people in a meeting, because we all know if you have too many people, it’s too many oppor- uh, opinions, and there is no result. And that’s why, what I always loved being more out at customers, talking with

[00:13:00] Speaker: them to, to listen and understand where do they have the problems, and to bring this back to the company, to the headquarter, and finding solutions exactly for these problems, and how to change these problems into a value proposition from our side that they have more time in, well, thinking about their products instead of thinking, “How can I get a bolt, uh, into my factory?” Yeah, makes a lot of sense. Okay, so you’re customer-focused. You’re also keeping an ear open for problems that customers are having, so you can bring them back into the organization, and you’re focusing on the things that are gonna make you the most effective, not necessarily all of the conversation surrounding that. So those are principles. In terms, again, though, of time management, uh, obviously at that time, the digital tools that are available to us now, the calendaring and stuff,

[00:14:00] Speaker: it was not there, so you were doing things on paper, but all these tools have come out, and now of course, half of your schedule could be controlled agentically. Were you the kind of person who was really sticking with tools that you were using that seemed to work, and you’d stick with it until you had to change? Or were you more the kind of person who was bringing the new tools in as soon as they were out? Well, I think early in the career, in the European times, I probably was more the person that was sticking to what was working because when I remember being in new business development… Well, today we have so many great tools. If it is a HubSpot or Salesforce or whatever is the brand name of the product people are using, you have so many opportunities to make your life easy. At the time, well, I had my notepad and I wrote down the, the customers, uh, I was having.

[00:15:00] Speaker: Um, when then the first tools were coming out, I probably was the last person who switched over because I was so used to what I was doing. And the big shift for me was probably coming when I went, uh, or when I moved over to China because there I realized the first time that basically what we were having in Europe when it comes to technology in private but also in business life was probably five to 10 years behind. And, uh, we moved there in 2015 and I was… I don’t know if shocked is the right word, but it was amazing to see that even 11 years ago nobody was having a purse or a wallet with them with money. Everything was on the phone. Everything was connected. All your taxi applications, your money, everything was in one app, which was such a difference to Europe before.

[00:16:00] Speaker: And that what also made me realize, well, I need to adapt, I need to change. And the speed in China at the time was also… or not only in China, in Asia in general, was so much faster than what I was used to, um, which was a great way in learning and adapting, um, to this as well. Yeah. So you said you moved there in 2015 and you were there for four years. So you departed your role in China in 2019. Is that true? Yeah, that’s correct. In 2019 we left. Yeah. Okay. Because I was just reading that China released the digital yuan in 2020 and then just, was it last year, it actually is across the whole country now. And of course, that’s attached to all kinds of systems that they run over there. And, uh, you would’ve left the country right before it went full bore like that, but I bet just in those four years you saw a lot of progress. Yeah,

[00:17:00] Speaker: it was unbelievable because at the time we came over, well, everything was centered around WeChat and, uh, Alipay. And WeChat is, well, basically a tool where you can do everything today in it. It’s a chat, but it’s a banking app, it’s a transportation app, so it’s kind of the, the Uber and all the other functionalities in one tool. And that helped me to learn to adapt much more to a, to a new system, and luckily everything was also available in English, uh, which made it a little bit easier. Because in the business environment, the biggest change was, well, not speaking the local language. Um, and this actually helped me a lot going over there not speaking the language. So as a manager, sometimes we tend to think we can do everything better and faster, and this ends at

[00:18:00] Speaker: the point, well, if you don’t speak the language and you cannot really communicate, you need to learn to trust your teams to let go. And, uh, that helped me also in time management to focus on managing people and listening to people and talking to them ver- versus doing the tasks they should doing because I think I can do it better. Sure makes a lot of sense. Well, tell us a little bit more about what you were doing there in China, and then how did you make the transition to Australia, and what were the differences between those two experiences? Um, over four years in China, we did a restructuring project. Um, so we had five individual legal companies, all in different regions, all with their own warehouses. And during the time before going there, the decision was made that we gonna consolidate the business, um, into one

[00:19:00] Speaker: company. So over the first two years, we consolidated the companies, uh, reduced the warehouse footprint, opened a new, um, uh, central distribution center, which is an hour south of Shanghai in Haiyan, and, um, centralized everything much more and consolidated, um, to be more efficient, to be more productive for our customers and especially, um, to have less errors, less mistakes in all our processes. And this took us, in total, three years, uh, the consolidation and reorganization project. And, um, then after it was fully implemented and everything was running and set up for future growth, then my wife and I, um, well, we actually thought about going back to Germany, but then my boss came around and asked me-

[00:20:00] Speaker: if I would have a little bit time and do a little detour, um, in going, uh, for a couple years to Australia. I’ve heard that story before with other folks at Würth. That does happen, doesn’t it? It does happen. And, uh, to be quite honest, uh, I was looking forward to going back to Europe, uh, but when my wife heard, um, uh, that we should go to Australia, uh, this was a done deal within milliseconds, uh, because she, she likes to see the world and experiences new cultures. And the kids were also happy because they learned, when they came to Shanghai, they learned the first time ever English. Um, and when they heard, uh, we are going to Australia, they were like, “Oh, yeah, they speak English, so that’s an easy transition.” Oh, I love it. Okay. So the things that you did in China obviously prepared you very well for what you’re doing now here in the US. But tell us

[00:21:00] Speaker: what was going on then during your time in Australia. Uh, COVID was going on, uh, like everywhere in the world, uh, which was a little, um, yeah, a frustrating situation because I arrived in, I think it was in July, August, and then half a year later, uh, COVID hit And, um, Australia was following the, um, zero COVID strategy because it’s a island, um, so they were really trying to have it minimized, which at the end also didn’t work out as they wanted. But it was a, I would say, a very tough period because it was with so many different restrictions. Also, the company, uh, with industry in Australia was more a smaller company where we needed, uh, to make some changes and restructuring, and that’s why also the timeframe was not as

[00:22:00] Speaker: long as like in China or now in the US. But it’s a beautiful country and, uh, really nice, relaxed people in Australia. But relaxed people sometimes also bring the challenge if you need to manage them, uh, they might see in a work-life balance, the life more important than the work So you definitely noticed the cultural differences there. Well, you’ve seen a lot of different, uh, s- different places, and you must have had that experience across the board. I mean, every place has its own certain idiosyncrasies, doesn’t it? What exactly did you see in Australia that makes you say that? Well, I have one example which was, um, very interesting to me. At the time it happened it was very shocking, um, because I went to a colleague at 4:12 PM and I asked him if he could do this and this for me. It was just printing out some

[00:23:00] Speaker: papers and stapling them and giving it back to me, and he said, “No, uh, because at 4:18 my day is over where I have my eight hours.” And I was like, “Okay.” And he was like, “So it’s only six minutes. In the six minutes I need to, um, close my laptop and clean everything, so I can do this tomorrow for you.” Which was, um, very enlightening for me, uh, that some people at least seeing work and life, well, on different levels. Yeah, they see it that way. Interesting, isn’t it? Yeah, they’re doing it that one day, and the next day they’re sending you off to a, uh, special camp just for people who might have COVID. You never know, huh? Maybe that explains it, Daniel. Maybe that, maybe that’s it right there. Who knows? Yeah, and who knows what’s the better answer. I’m not the one saying this or this is better because, um, I also

[00:24:00] Speaker: really saw how Australians are much, much more relaxed in the environment and in life. So, um, I’m not saying which one is better. No, good point. I mean, s- Australians, the ones that I’ve met, are some of the sweetest people on the planet, and yet they have this very, very strange episode in their recent history, and I can’t explain it either. But anyway, so you lived there through it, and we were all somewhere during that time, and we all have our own experiences. Well, just asking a more general question about both China and Australia. Were both of these Worth business units composed organically, or were they done through acquisition like they have been in the US, which is actually a mix of acquisition and organic? I mean, how did it actually come in China? Was it companies that you bought up, or did you build them all? No, in China it was organic, so it was, uh,

[00:25:00] Speaker: companies which we founded in the ’90s, and the company on the other side in Australia, that was an acquisition. Um, it, um, under the brand name Thomas Warburton, which today is rebranded under Würth Industry Australia. Okay. So again, more opportunities to improve your skills to prep you up for what you’re doing right now. Absolutely You know, along the way, and of course you were already telling us that you furthered your education while you were working, I think at the time it was part-time with Würth, but you were educating yourself and you must have really had, um, a, a dedication to it, a discipline, and you must be a very, very solid reader. I’m wondering, do you do much outside reading just for pleasure and general interest in addition to all your business reading? Um, to be very honest, during my business hours a- and also outside the business hours, I have to read

[00:26:00] Speaker: a lot what’s coming in on a daily base. So when I have the free time, I’m really a very different reader, where I’m more into German authors which are writing crime stories about, uh, detectives being in Portugal and in France, uh, which I started now with one. But very simple reading and writing which gives me always at the end of the day, because usually I’m doing this between 9:00 and 9:30, for my last half an hour a day to just relax my mind and finding into a good sleep. Oh, that seems like a very, very smart habit to get into. I really admire that, and I love the genre too because it really separates you from all your day-to-day issues, and I think that’s what people need. Bec- I tell you, just myself, I do

[00:27:00] Speaker: experience myself with all of the, I don’t know if I’d call it screen addiction, but I’m definitely on screens a lot, and it really impacts your ability to sit down with a good book. Absolutely. Absolutely. Uh, the only problem with that is, um, if you ask my wife, she’s not always happy about it because when I started two years ago reading the crime series about the detective who is in Portugal at the Algarve, at the end of reading his five books I knew so much about south Portugal and these little villages and what restaurants are there, so that I made the family actually going with me to Portugal- that I can show them around. And now my wife is afraid when I started reading this, uh, the detective who is in the Bretagne in France, that, uh, she will need to go to the Bretagne in the next years with me, so. But it’s, it’s a nice, uh,

[00:28:00] Speaker: way of disconnecting from the business. Well There’s worse places, you know? If, I mean, if you picked up a book maybe about, like, uh, I don’t know, some really terrible place in some godforsaken corner of the world, I’d be a little worried. But France, I don’t know, I’d, I wouldn’t mind going there. Yeah. It’s not, it’s not so bad. It’s not so bad. That’s true. How about podcasts? Do you listen to any podcasts, aside from Fully Threaded Radio, that is? Um, yes, I’m listening to podcasts. Um, so I’m listening to t- some sports podcasts on a weekly base. I’m doing some where it’s about the daily news, and then I’m also doing one which is, um, having different people which have special stories or made a fortune or had a great life story, so where it’s every week with a different,

[00:29:00] Speaker: um, famous person from around the world. Okay. So you’re getting that as a source of inspiration. I love it. Yeah. And it’s a good way because my office drive in the morning, that’s 45 minutes, um, where I’m usually driving down here at 6:00 o’clock, and it’s a nice way to start the day and, uh, listening to s- uh, listening to something interesting, so, uh, to use the time on the road in an efficient way. Yes, and on the plane too is what I’ve found, and a lot of Fully Threaded listeners listen to this podcast on planes. And I know you do a lot of that because it took us many months just to get an open slot to be able to do this recording, so, uh, I know you’re in the air, on the road a lot. That’s unfortunately true, yes. So you’re based now in Indiana. You have your Greenwood facility there, which you’ve made a substantial investment into. Another one of the big facilities that

[00:30:00] Speaker: you are really… it’s kind of the crown jewel right now, isn’t it, of your automated warehousing operation in Roanoke. Where do you wanna dive in on all that? Which one is the crown jewel? I think you will hurt a lot of feelings when you say it’s this facility or this facility, but I know where you’re going with it and I would say, well, over the last, I’m now here five years in the US, and, well, it was again a very big restructuring project or consolidation also over the last five years, uh, because when I came here, we were 13 individual companies in different areas. We had over 70 different warehouse facilities, and now we really, over the last, uh, four to five years, integrated all the business into one company, um, reduced also our warehouse, um, footprint and consolidated everything much more into larger, more automated facilities.

[00:31:00] Speaker: And we are really following the concept of having a few larger DCs fully automated, like our Roanoke facility in Virginia, which is a four hundred thousand square foot facility. Um, we have more or less the same up in Brooklyn Park in Minneapolis, um, which is our most automated facility, which we are having since two thousand sixteen. And then we’re having Greenwood, Indiana, and, um, a fourth location, uh, from the larger ones is in Bondurant, Iowa, where we are focusing much more on kitting equipment, so where we really pre-packing bags and kits for our customers so that they don’t have to do it, uh, during their operation hours Well, please go on. Tell us some more about what’s going on automation-wise. I think everybody is looking to Würth as a leader, and I’m very sure that you’re doing some

[00:32:00] Speaker: extremely interesting things in that area. Yeah. Well, we have to, I would say, because I said before, when I came here, we had 72 facilities and, uh, we are now, um, at 19 facilities, and this does not mean that we just closed facilities because we wanted to close facilities. It was more really to bring better service to our customers and to be more automated, to be more secure, um, because you can handle processes in a much more efficient, in a much more productive way when you’re putting automation equipment into your facilities to support our employees. It’s not about, um, laying off people in the, uh, logistic area. It’s more about having the capability also in growing, in making it more friendly for the people to work there. Because if you

[00:33:00] Speaker: have been to one of the facilities, lifting the whole day screws, nuts and bolts and fasteners, that’s not the most fun job if you are doing this for eight hours a day. So your back hurts, and the benefit in having this automated, having robots, having, um, sorting machines who are doing this for you is actually very beneficial for our employees. And that’s where we cannot do this in t- 72 facilities, and that’s where we are focusing there more, really condensing this to the CDCs, uh, which we need for our customer base, and to have it then they are much more automated, um, to support our customers, our people, and, um, to be able to grow much more in the future with these technologies. And you probably also saw the videos, um, well, everyone sees the videos, what’s happening in this realm, where we see robots

[00:34:00] Speaker: dancing, robots, uh, being in warehouse building, taking over the first, uh, tasks, and that’s obviously also something what we are looking very carefully into, um, especially since our sister company also in Shanghai in China is investing in the technologies, but also in Würth Industry Baden-Württemberg in Germany, which is the logistic hub for all of Europe. And they, at the moment, if I’m not mistaken, they have a ratio that 70% of everything in the warehouse is already fully automated. Wow. Yeah, I hadn’t heard that statistic. That’s very impressive, and that’s only gonna go up, isn’t it? Exactly, yeah. And there it took also a while in explaining this to the employees why we are doing this and why we are investing, uh, in these kind of technologies. But I think we all experienced it, especially during the COVID times or after

[00:35:00] Speaker: the COVID times, that it’s getting much more difficult to find people that want to work, um, in the warehouse, um, to do the picking and all the tasks, especially when you have heavy goods, where they saw, hmm, it’s maybe much easier working as an Uber driver or going here or there. And that’s why we need to think about the future in how we can automate this in a better way, and also to support our warehouse employees so that they can more do the tasks to oversee the processes and the automation versus do the heavy lifting. Yes, and we’re now exactly at the point that I knew we would get to, where it’s hard to talk about the future without also talking about what’s coming at the same time. I mean, this is the world we live in, isn’t it? Because we are faced with it. It’s changing so rapidly, and we all have this sense that if we’re

[00:36:00] Speaker: not really making the right decisions now, that we’re gonna miss something, and that’s got to be, I can only imagine in your position, weighing heavily on your mind. Yes. Um- I’m happy that you didn’t ask me the question, what keeps you up at night? Um, because there, luckily, I have a very good sleep, and I’m, uh, I’m usually also not getting stressed out very quickly, um, which is a good thing. But still there’s a lot which is on your mind where you think about the future and what do we really need to do. But when it comes to our industry, probab- like the fastener industry in general, I still think it will remain essential, but I also think that the strongest suppliers will … They will differentiate through supply assurance, through quality,

[00:37:00] Speaker: traceability of products, and then also the technical expertise, because that might also be a problem on our customer side that they are not getting this in the future, or less and less at least. And at the end, it’s about lower total cost, which is not only the unit price, it’s more really to bringing the whole package to our customers because, well, that’s an old saying, but a fastener is a very small part, but it has a big consequence when it’s unavailable or it’s the wrong quality, and that what makes it then really an expensive part, and I think this will not go away. So our focus is much more on the supply resilience and the, the supply networks, which we all experienced now multiple times. If it is, uh, a global supply chain, uh, crisis with COVID, or the freight is not going through the Suez

[00:38:00] Speaker: Canal or somewhere, um, where we needed to adapt very quick, um, and in an efficient way. And I think this is what our customers also need, what they demand. And the same then, uh, when it comes to quality compliance topics. Uh, I, I can’t remember when it’s the last time that there is not a new compliance or reporting topic, if it is, uh, CBAM or all the different tasks we are having to comply today with different data sets Yes, there is a tidal wave of those types of regs that are, seems like they’re coming and they’re always coming Yeah, and they are not going, and they are not going away. And, uh, uh, it’s then getting even more complicated if the European Union is coming up with something where we can say, “Okay, well, doesn’t matter to us that much.” Well, at the end it matters because also our customers here in North

[00:39:00] Speaker: America are manufacturing and exporting to, to European Union, so we always have to comply with all the different regulations globally, um, because we wanna support our customers not only here, but around the world, because that’s also one of our big value propositions which we have for our global customers, that we can supply and bring them the same service all around the world, which I think is one of the big benefits Yes. And by the way, while we mentioned it, Danielle Riggs does a fantastic job on all the CBAM stuff And surprisingly, she also really likes it. She’s one of these people who, um… And I’m totally happy that she’s on our team and is doing this, because that you like these kind of regulations, um, well, you don’t find, uh, that often people like that. So it’s amazing to have her on our team. Yeah. It’s obvious that she’s a very good fit for that role. Well, you make another great

[00:40:00] Speaker: point, which is that so often we get distracted by the technologies themselves rather than, as you were saying, this package of things we need to be doing to keep competitive in the market, the technical expertise and the various services that go on to just distribution and keeping the supply chain humming for customers. And the fact is though, that a lot of these technologies will be going into these areas in a thousand almost imperceptible ways, but we’ll be improving them all along the way using different AIs and so forth. So put that aside. Who do you see as the big competitor to Würth in North America right now based on, as we’re saying, building out that complete package for customers? Ugh. I, I knew somehow that this question might come up. But on the other side, let me answer it in a, a little different way because I’m not the greatest

[00:41:00] Speaker: in talking about competition. I wanna focus more on what are we doing and to listen and talk with our customers what they need. Um- Draw outside the lines. Yeah. And that’s, that’s very often much better than only looking what the competition is doing because, um, we are not in the business in copying something, we are more in the business in bringing values to our customers, um, also in the future. And I think there with AI and a lot of the tools, well, we all know we can improve the forecasting accuracy of inventory, exception management, and everything, but at the end of the day you still need a lot good people, smart people, and especially people that That see also the culture in a company like I see it, that it is kind of something like a family. And I think this is what I’m

[00:42:00] Speaker: much more into developing, creating here at Würth Industry USA, to create more this family atmosphere, to give people the career development, um, chances, uh, so they can also progress a career of 30-plus years in the organization. Because with motivated employees, I think you can reach much more than always looking left and right what the competition is doing. Okay, well played on that. Let me tell you a little anecdote that I just picked up. I have a lifelong friend who sells ERP into the Global 200. He’s really a high flyer in that area. I mean, they don’t even look at a deal unless it’s minimum five million. And they have been, for many years, going into these discussions knowing who the competitors are and pretty much knowing how to deal, and they get a certain number of those deals. And

[00:43:00] Speaker: these days, he’s seeing pressure from beneath and pressure from above. The pressure from beneath is coming from what they call ankle biters, all these little AI shops who have set up and they’re nicking away little pieces of the business, and certain people are interested in that. They want to find a really inexpensive solution for a certain aspect of these, uh, ERP problems that they’re looking to solve. From the top of all places, they’re getting competition from a company nobody really expected to see entering the arena of this high-end ERP. That’s Palantir, and I don’t think I need to explain too many reasons why Palantir is getting in on these deals, but they’re coming in and they’re crushing them from above. And I wonder how this scenario is playing out in the wholesale distribution area, just generally, not necessarily for Würth. This will flush out in time, and it’ll work itself through just like all of these kinds of disruptions do when

[00:44:00] Speaker: new tech comes along. But in terms of wholesale distribution for the next couple of years, does that resonate with you at all? Um, that’s an interesting and a good question, and I really cannot give you an answer on it. The one interesting part you mentioned about the smaller companies, I would say that’s exactly the same what we are having, not only in North America, but also in Europe, in Asia, that the biggest market share is actually much more on the local small companies versus the large nationwide, uh, competitors which we are knowing in the business. So it’s more really this market share of small, medium-sized companies between $10 and $50 million, um, uh, yearly turnover. Um, and I think this is something which will continue at some level, but will also, on the other side,

[00:45:00] Speaker: um, give us the opportunity to, to bring more value to customers which they are servicing with new technologies which we can bring in. And on the top approach from really the big ones, I couldn’t give you a, a clear answer at the moment, Eric. Fair enough. It’s a large ball of wax I handed to you. We’re all dealing with some version of it, though. Yeah, that’s true. And, well, we all hear the news or, um, yeah, the news over the last weeks when it comes to AI and also what benefits AI might bring us, but also what risks it’s bringing in. I think the jury is still out what is really true and real and what is more also sometimes marketing of different people. Um, so if you ask me now, I might give you an answer, and in three hours I’m reading

[00:46:00] Speaker: something and I might give you a different answer, uh, what the outlook in all of this is for the future. I understand. I agree. I agree. Well, I want to ask you a few specific things about your thoughts for the future in a minute or two, but let’s just stick on what’s going on at Würth at the moment. I haven’t really asked you to define the structure of Würth USA as it is right now. So you actually divided the Würth business units into two big chunks, right? And one of them is Würth Industry USA. You are the CEO of that piece of the business. There’s another one, and I know another gentleman who’s also on the executive leadership track, Dee Ward, he’s on the other side now. I don’t know if he’s running it or if he’s just over there. You brought him back from Asia as well to jump back into it. How are you set up now? Yeah, that’s a good question, and, uh, you’re right. It’s basically divided into three different segments in the US. Um, that is on the

[00:47:00] Speaker: one-hand side, the Würth Industry division, uh, which is under my responsibility, and Dee Ward on the other side, he’s responsible for Würth USA and our MSM division, which is basically the company which is, um, into selling MHO, PPE products, but also is focusing much more on smaller customers, on tradesmen also in the future. So not really the big industrial customers which we are handling and servicing from the Würth Industry division on the other side. And then last but not least, we also have different Würth companies which are not even acting with a Würth name on the market, which are, uh, were coming through acquisitions or are in different fields, um, which are also on the North American market. But focusing on Würth Industry, which is the

[00:48:00] Speaker: business unit I’m responsible, um, we are doing now here the business which used to be 12 different companies and, uh, supporting all industrial customers with VMI programs, service programs, um, throughout the whole, uh, US and, uh, all of North America Earlier in the conversation, I mentioned the acquisitions that Würth has done a lot of over the years, but not for a while with Würth Industry USA. So it’s been about four years by my read. Is there, uh, a pause, or are you not in that mode anymore? What’s going on? I would say, uh, a little bit from everything. Uh, and you’re right, we were very much into acquisitions. Uh, that was how Würth Industry was growing over the years in the US market. But when I came over here five years ago, we made also the

[00:49:00] Speaker: decision with the Würth family, with our, uh, advisory board and, uh, uh, board in Germany that over the next years we are focusing more on consolidating all this business into one. So we had a lot of ERP implementations, ERP integrations, bringing people in different cultures from different entities together, um, coming up with the warehousing, the logistics strategy, which I touched before, to really make sure we have the right footprint for our customers and investing there into automation facilities So at the end, also a complete restructuring of the management. So it was all over a very time and resource-intensive process over the last years to do this. We are now one company with a clear structure, with a clear management, with clear processes, with a clear vision also

[00:50:00] Speaker: what we wanna bring to our customers to have this now as the baseline to grow organically much faster than before, but also in the future, and I’m not saying in the next two months, but in the future, looking for possible acquisitions which make sense for us. For example, if we might, um, uh, extend more into the west region or into other product segments, which might make sense for us. But we believe also that with the current structure and the setup we made over the last couple years, that we have a much stronger foundation to also now grow organically, um, in a much faster way than by purely doing acquisitions. Because with the whole team here in the US integrating all these companies, uh, and doing these ERP implementations, it also takes a lot of

[00:51:00] Speaker: time, effort from the people so that we wanna give also them a little bit time to, to breathe again, to get comfortable in this new company, to find their place, to support our customers coming up with solutions before we might make, uh, additional, um, acquisitions in the future Let me ask you about Worth Additive. You launched that business, I believe it was in ’21, and recently decided that it wasn’t gonna be a good fit. I have to say that just personally, I was very excited to watch what you were doing there. We actually had AJ on the podcast a couple times in the early days, and a lot of exciting things were coming out of that. I think you are to be commended for giving it a shot because it obviously was very exciting, seemed to make a lot of sense in some ways. What happened there? Why couldn’t it work? Well, you have a lot of good

[00:52:00] Speaker: questions, Eric, I have to say. You’re prepared. Um, well, first of all, uh, the additive manufacturing that was under Dewald, um, under his, um, responsibility. But, um, long story short, it was an interesting concept for us to really do these on-demand parts, um, also for rapid prototypes, tools, reduce lead times, to have less physical inventory, and going more in this digital inventory vision. And it created value, especially on low volume, complex, urgent, or hard to get, or obsolete items. But at the end of the day, the main reason why we didn’t pursue going on with it was we needed to really focus more on our core business. Because what I also learned over the years is every

[00:53:00] Speaker: day we have– we are coming up with a great idea. But if every day we are coming up with all these great ideas, we’re pushing this into the organization, at the end of the day, we are not focusing and really driving some of the great ideas we– because we are just bringing too much into an organization. And I think this was also happening there, that, that we had too many different things and not focusing on our core business and to really bring more the value in this. That makes a lot of sense, Daniel. I completely understand, and you’re obviously doing a very good job of clearing the decks and getting everyone focused. So I get that. I have to tell you though, I’m still really excited about the idea of being able to use additive manufacturing technologies to do things like, uh, who– y- you just don’t know these days. A lot of nanotech Ideas in, uh, biological side and then, um, I mean, with

[00:54:00] Speaker: organ transplants, for example. I mean, really the sky’s the limit anymore Yeah, yeah, absolutely. Absolutely. And I also believe in the technology and in these topics. It’s just as I said before, uh, sometimes my teams are also, uh, telling me, “Well, great idea, but Daniel, the day only has 24 hours.” Uh, we cannot implement all the great ideas, uh, which, uh, we all sometimes need to be reminded that it’s better to focus on three great ideas and really putting effort in instead of pushing 78 great ideas, and at the end of the day we are not doing anything. Right. Right Okay, well, here’s a concept that is definitely coming right at the supply chain at wholesale distribution in general, and that is this idea of agentic purchasing. So we’re being told that in the not too distant future, this movement, which is already well underway, is gonna take over like an

[00:55:00] Speaker: avalanche, and you’re gonna have just a ton of agent-to-agent purchasing going on. I mean, first of all, do you agree with that? And second of all, what are you doing about it if you do? Well, it depends on what timeframe we are working, because I don’t think that it will be as fast as some people really think it’s coming. But I agree on the topic that AI, and also the agentic purchasing, that AI itself will help us to improve really on the forecasting, replenishment, exception management, customer support, all these topics. And agentic purchasing will also probably likely automate the routine low, low-risk transactions first. But when it comes to industrial supply, I really think that the human expertise remains very critical, especially when looking also about all our specifications which we are having, possible

[00:56:00] Speaker: substitutes, and the topics of quality, safety, engineering, which are involved, and also having this supplier risk in all of this. That’s why, yes, I see a lot of positives coming out of it, but I think it will start really low with, with the approved repetitive low-risk items where I can see the benefit. But looking only on our specifications, and I know, Eric, you also know this very much when it comes to drawing specifications and how to read things and how much hours we try to spend there to get this automated. At the end of the day, very often human persons still need to look over it, at least at the moment, to then make the right decision, or talking with engineers from a cus- from a customer to make the best decision possible. Good points. You know, I’ve often

[00:57:00] Speaker: felt getting into the fastener space, and I’ve been involved in fasteners now since 2006. I came to this industry through technology, and I’ve thought that there’s a natural moat around the fastener category because it’s so complex, and the money is really made in specials. It always has been. And the commodity stuff, which can be easily absorbed by some of this agentic stuff, you know, it, it’s still always gonna be there. But really that special category of a very special category fasteners seems like it’s got this natural moat around it. Having said that, I also didn’t think that we would have semi-trucks driving down public highways as fast as we have, but they’re out here in Ohio now, and I know they’re in other places in the country too. So I guess we’ll just have to wait and see. I, I completely agree. And with some, uh, developments, w- we see it’s going really fast, and it’s great technology and a great help.

[00:58:00] Speaker: Um, and with other topics, we probably sometimes expect it to go much faster than what really is happening at the end of the day. So we will see over the next month and years, uh, what the reality is. Um, I think the most important for us is to be ready and to also, what we are trying, especially when it comes to AI, not only in forecasting and demand planning, but in general in the company, is to set the, the right governance framework within our organization and setting the rules and the parameters in the organization. And after that, to have the rollout to use AI, that we are not having this unstructured approach that everyone is creating agents and is going crazy. But having it more in a structured approach, and that’s why we slowed it down on our side

[00:59:00] Speaker: and have set up the right governance parameters, the right system strategy that it’s also all in a secured environment within the company. And we now did the full rollout to all the employees last week Tuesday, where everyone is now, uh, using our own WürthGPT in the organization, which is also secure and, uh, no data is going outside. Very cool. Well, I’m glad that you’re the one who has to manage that and not me, Daniel, because that’s- Yeah. And I, I’m– and Eric, I’m glad, I’m glad to have people that know this much better, uh, than myself, and that’s why it’s always great and important to have a great team around you because, well, by ourself we can maybe have a great idea, uh, but you need a team that actually is driving all these topics and fills everything with life.

[01:00:00] Speaker: Oh, 100%. Yeah. I mean, I’ve got smoke coming out of my ears just thinking about that job. I don’t really know many of the Würth IT guys. I know a lot of IT guys in fasteners, but I don’t think I know any of your guys. I’m sure they’re top-notch. You know, in terms of standardization in this AI tech stack, this is like the early days. It reminds me of like 1994 and trying to get on the internet, where you had to worry about, you know, how you were gonna get your Winsock all set up right and everything just to get a connection, you know, with a crappy modem dial-up, you know? Yeah. And, uh, and, and nothing ever worked right and the new versions would come, and everything would break. And I’m having similar experiences right now doing that with some of the open source agent platforms that I’ve tried, and just building workflows and things. And stuff works a little bit, and then it breaks, and then it works a little bit. However, having said all that, there are standards emerging. Obviously, MCP is a great example of an sort of an

[01:01:00] Speaker: API-like interface for AIs, and I have no doubt that a lot of work is being done in the agentic purchasing area. Yeah. Matter of fact, they’ve got a conference coming up for, uh, B2B e-commerce in November that I, I’m sure will be very informative on all that. And we also see… And that’s what I meant, uh, before with the, with our governance topics when it comes to AI and also agents and everything. And there we also see much more standardization is coming because you need to, to control it. Now, um, control is maybe the wrong wording. Um, but you need to find ways to have a, a standardized way for the people to use it because- You mentioned it before, uh, uh, when you are doing something on the open platforms, very often if you are not doing it in the right way, um, you are very disappointed in the result you are getting, or you are getting the first time the right result, but

[01:02:00] Speaker: after using it three times, uh, it’s broken down and you are not getting the result. And that’s why I think there will be much more standardization topics coming for us in a private life and even more when it comes to the business life. Yeah, 100%. Okay. So earlier you said you were glad that I wasn’t gonna ask you what keeps you up at night. I’m also not gonna ask you if you were a fastener, what fastener would you be? So but what I, I’m gonna tr- try to ask you without making a particular prediction, this whole dialogue that’s going on right now, and for the first time probably in history, people in polite society are talking about these end time scenarios, you know, where like human extinction is just thrown out as a possible scenario within the next five years. Oh, yeah, by the way, all of humanity will be wiped off the map. But given all that, now what do you think, you know? I mean, it’s very hard to

[01:03:00] Speaker: believe. It very hard to operate in an environment like this. But are you crashing into that scenario in your thinking, or maybe people on your team who are adding that to the mix and just making things really sticky to work with? Uh, unfortunately, yes. And I wouldn’t say it’s only, uh, some team members, but it’s also in private life. And I just had this, uh, I think four weeks ago when we were at a dinner, uh, where after the dinner we had an espresso and one person shared that, uh, well, it doesn’t matter because in 10 years we will be all extinguished from the world. And you hear these conversations or these comments more and more from people. And now when over the weekend I saw somewhere where it’s now the discussion about, well, uh, just having a plug to unplug AI and, uh, or kill switch and all these things where well I would like to

[01:04:00] Speaker: answer something, but I have way too less of the deep understanding how all this is really working that I can actually make a good comment there. Um, so I think there are probably rightfully concerns about what’s happening, but on the other side, I’m not a person who has this, uh, end of the world scenario in my head every day. I think w- we will have probably also some smart people who will have the right ideas and will do the right thing. So no, I, I’m not too worried about that. Well, there are some times in life where the best course is just to smile warmly and nod, and this may be one of them. I hope so. Yeah, I do too. I really do because it’s out there, and I think it’s the gestalt, you know, the kind of the common mindset these days. And- Yeah … it’s hard to

[01:05:00] Speaker: believe, but we’re having this conversation right now on a fastener podcast, you know, so it’s here, folks. Well, I appreciate you answering that and taking it seriously, and I think you’ve comforted a lot of people knowing even at your level it’s still being discussed. You know, it’s something that we all have to deal with. All right. Well, I hope that I get a chance to see you in, well, we’re calling it Vegas in Phoenix. That’s the International Fastener Expo coming up very, very shortly. Some people might be listening to this conversation on their way to that event, and Würth is a great sponsor, and just want to let you know right now that a lot of people appreciate that. Thank you very much, and we are happy to be a good sponsor and working together Uh, with you, Eric, and, um, I’m also going, uh, to the show. Think I’m leaving on Tuesday or Wednesday. Uh, but, uh, will be the whole week, um, on the show. And, well, I’m looking forward, uh, that it’s this time in Phoenix.

[01:06:00] Speaker: Uh, very excited to see how different it will feel from a Vegas show. Well, we’re all gonna find out. It’s a first. So, and I guess formally they announced that they will be there in ’27 as well, so hopefully it’ll be good. I’m sure it will. And I wanna ask you one last thing. First I’ll say, I don’t get too excited about most interviews that I do. I’ve done hundreds of them at this point, and I have to say that this time I did get a little, little nervous, a little anxious in hoping that it was gonna be okay talking with you, which it has been. You’re very easy to talk to, and I really thank you for talking. I greatly appreciate it. You didn’t have to do it, but you did. And I guess I kinda had an inkling that it would go like this simply because the couple of times that I’ve encountered you in person, you always have these really fun socks that you’re wearing. So I knew you had a fun side to you, Daniel. Yeah. Uh, sometimes my wife is

[01:07:00] Speaker: saying that, uh, well, it takes people, uh, quite a while to see my fun side, and, uh, because she’s always saying, uh, this I cannot say on the radio- … uh, that I’m looking always a little grumpy. Uh, but actually, no, I’m most of the time in a good mood. Well, you’re focused on a lot of very important things. I have to ask you this. I know Professor Wurth is a great patron of the arts, and has he ever commented on your socks before? No. He actually never commented on my socks, and to be quite honest, Eric, when I’m going to Germany to have meetings with the board and also with Professor, there I’m very traditional suit and tie, white dress shirt, blue tie, and blue socks, dark blue socks and black shoes. There I’m, there I’m not very extravagant.

01:08:00 — Interview thanks and sign-off

[01:08:00] Speaker: Okay. I guess I understand exactly why you’re doing that, so. Yeah. Sometimes it’s better, it’s better to, to be more the classic guy, uh, once in a while than to shine with things he might or other people might not like that much. Gotcha. All right. Well, you’ve got that figured out, and that’s obvious because you are the CEO of Wurth Industry USA. Daniel Schmidt, I really appreciate you talking with me today. Look forward to seeing you in Phoenix. Awesome. Thank you very much, Eric. Fully Threaded Radio is a production of Fasteners Clearing House