KWS December 2020

KWS

Digital Transformation in Procurement

DIGITAL REPORT 2020

IN ASSOCIATION WITH

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KWS: Digital Transformation in Procurement

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www.k ws.c o m/ c or p / en /

KWS

Peter Hagenow, Head of Strategic Procurement at KWS, discusses the digital transformation of the procurement function at his organisation

K

WS is one of the world’s most renowned plant breeding companies. Founded over 160 years ago, KWS focuses on plant

breeding and the production and sale of seed for corn, sugarbeet, cereals, rapeseed, sunflowers and vegetables.

Peter Hagenow is the Head of Strategic 04

Procurement at KWS. Having joined the organisation in November 2018, Hagenow possesses over 15 years of international experience in large and medium sized industries and has held positions in sales, procurement, manufacturing and general management. Upon joining KWS, Hagenow set a roadmap and began to transform the procurement function. “When I joined the company, I was on my own in the global procurement department and it took some weeks before anyone else joined,” he explains. “At the same time, we were starting to develop the global transaction centre which my equal, Maik Mueller, headed up as the team lead.

Both of us then began to create our teams and to set up the process landscape. My primary role was to search for category managers both internally

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www.k ws.c o m/ c or p / en /

Digital Procurement: Lean Processes, Lower Costs, Better Decisions Digitization makes purchasing more efficient across all industries. An online store like Amazon Business helps companies streamline processes, control costs and make better buying decisions. The tail spend purchases outside of negotiated procurement contracts - in particular can be managed in a more cost-effective way. Small product orders account for up to 20 percent of a company’s expenditure but make up 80 percent of suppliers.

With digital procurement, managers are contributing to their company’s success by saving costs. Optimizing search, approvals, order processing, and payments have a potential to cut non-material costs significantly in every order. In contracted categories, as e.g. IT accessories, office and MRO supplies, savings can be realized due to lower unit prices, e.g. about 20 percent in IT peripherals according to the recent Deloitte study “COP response to combat Covid-19”.

Another advantage is that employees know Amazon from their private shopping experience and intuitively find their way around Amazon Business. They are enabled to purchase goods themselves - critical product groups can be excluded, and approval processes applied. Amazon Business can be easily integrated into the existing ERP or procurement systems.

B2B online stores are a key element of digital procurement. Companies benefit from lean processes, lower process costs, competitive prices, and volume discounts. For purchasing managers, B2B online stores should therefore be a key factor with regard to designing their procurement strategy.

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and externally to create a team of true

about 65% of our workforce glob-

experts in procurement. Today, the

ally,” he explains. “The next step is to

teams are close to being completed

stabilise the core and add more stra-

and we’ve started to integrate bots

tegic processes to the digitalisation

on the operational side, while having

agenda. Ultimately, we want to make

a true expert network on the more

purchasing as simple as possible

strategic side.”

and it should be as easy as doing online

Under Hagenow’s leadership, KWS

shopping at the weekend. We want

is connecting all 70 of the countries

that same experience and to make it

it serves through its centralised pro-

as streamlined as possible.

curement function in Berlin. “We’re over

To try and make this happen, we’ve

halfway through and have connected

set up electronic catalogues in our 07

www.k ws.c o m/ c or p / en /

KWS

08 purchasing system that allows you to

desired goal in a few simple steps.

check out in six clicks only and make

With only a few clicks, the office

it easy for our internal customers.

supplies are ordered in a catalogue

That’s what we’re constantly

system, such as Amazon Business.

striving for.”

Algorithms help us to find even more

Hagenow has observed how

optimal ordering slots. Approvals are

digitalisation has transformed pur-

made on the road by mobile phone.

chasing and recognises the trend of

Contract texts can be evaluated

buying online. “We all buy something

automatically, signatures via computer

almost every day and we love to buy

have become standard. Ordering by

online. Nobody finds this process

voice or chatbot are reality. A number

difficult and we find efficiency is very

of years ago, it was my aim to have

high,” explains Hagenow. “This is

a fully paperless office and I believe

also expected of modern purchasing.

we will make this a reality very soon.”

Digitalisation allows us to reach the

“However, this means that we have

“ We must take care of the workforce of today to ensure they’re equipped with everything they need to succeed for tomorrow” — Peter Hagenow, Head of Strategic Procurement, KWS 09 to be able to control the data that

biggest benefits of a centralised

accumulates, i.e. make it available

procurement process is creating one

for evaluation and use. This is a new

unified way of doing things to make

requirement for purchasing. But we

the process more efficient. “With pur-

should not and must not be afraid of

chasing, if you have one unified way

change. I believe that with all the auto-

of doing things then it allows you

mation and optimisation, manpower

to think about automation,” says

will not be lost. It will look different

Hagenow. “During the last two years,

in the future, maybe we will automate

we’ve set up the procurement pro-

purchasing as far as possible. The

cesses in a way where the approval

concepts, the contents and the control

of a purchase is done at the very

of the systems will simply become

beginning. For example, if I want

more important and job descriptions

to buy a type of equipment above

will change accordingly.”

a certain threshold and my manager

Hagenow believes one of the

needs to approve it to ensure we www.k ws.c o m/ c or p / en /

KWS

“ We want to make purchasing as simple as possible and it should be as easy as doing online shopping at the weekend” — Peter Hagenow, Head of Strategic Procurement, KWS have the budget then this can be easily done. This means that when it’s all 10

approved and the item is delivered, we don’t need to look at the invoice anymore, we can automate the payment. This is

less required to approach the supplier

why it’s important to have a centralised

base with a club on their back, but

procurement process.” Over the past

rather to seek strategic approaches and

two decades, Hagenow believes that the

partnerships.”

job profile of the buyer has transformed

With over 160 years of experience

as the world continues to embrace digi-

in the industry, Hagenow acknowledges

talisation at scale. “Digitalisation is the

the added challenge of convincing every

keyword,” he explains. “ERP systems

employee to transform operations and

have been occupying us for some time

the day-to-day process. “Our company

now, the operative buyer has become

has been around for such a long time

less and less a mere typist who some-

that it makes it more challenging to

how transports the order into the ERP,

change the process,” he explains. “We

and is increasingly developing into

constantly get asked: why change

a Content & RPA Manager. At the same

something that works? So, this took

time, strategic purchasers are less and

a little time to get everyone onboard.

11 E X E C U T I V E P R O FILE :

Peter Hagenow Title: Head of Strategic Procurement Company: KWS Industry: Agriculture

Location: Einbeck

Peter Hagenow is KWS’ Head of Strategic Procurement, reporting to the CFO Eva Kienle. Since joining in late 2018, he is responsible for the Procurement Expert Hubs for Direct and Indirect Material and Investment & Technical Procurement. Prior to joining KWS, Peter worked at Akelius Residential where he also built up the central procurement function. Before Akelius, he worked in various industries, each time related to procurement but also to the production environment. Peter earned a Master of Engineering degree in Industrial Engineering from Rostock University. www.k ws.c o m/ c or p / en /

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“ With purchasing, if you have one unified way of doing things then it allows you to think about automation” — Peter Hagenow, Head of Strategic Procurement, KWS

to try and reassure people when it comes to digitalisation and help make them understand that there is no danger to new technologies.”

Having partnered with SAP for a number of years, Hagenow understands the importance of key, strategic collaborations to success.

“In the beginning, Maik and I needed

The larger the company, the more com-

to connect to the business so that

plex it gets to drive digitalisation and

we could build the procurement func-

we have to remember that we’re not

tion. Our company has used SAP for

a small company anymore. It’s vital to

decades so we were reaching out to

sell your idea and convince people that

them to search for the right tool for

it’s for the best. I believe it’s important

us,” he says. “One of the best things www.k ws.c o m/ c or p / en /

KWS

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AMAZ ON B U SI NE SS Hagenow believes that his company’s relationship with Amazon Business has been a key component to success.

“In terms of COVID-19, it has been very helpful for us that we had partnered up with Amazon Business at an earlier stage of our journey,” he says. “Our requestors were already used to kind of online shop the day to day requirements online since we introduced the Amazon portal. This is a big plus when you’re suddenly connected to your company through the internet.”

“A big advantage in the international context is that we have been able to introduce Amazon business and the possibility of restricting the access to certain product categories. Soon we will be managing the tail end spend through Amazon in 17 countries with a one-creditor approach, but we are also looking to integrate other partners with their pre-negotiated assortment of goods to the portal.”

www.k ws.c o m/ c or p / en /

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KWS

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“ I believe it’s important to try and reassure people when it comes to digitalisation and help make them understand that there is no danger to new technologies” — Peter Hagenow, Head of Strategic Procurement, KWS

about working with SAP is that when we have a certain development need, they always listen and try to build our requirements into the products over time. They’re a big reason why after our five year transformation journey, we will almost have a fully digitalised purchasing experience.”

Looking to the future, Hagenow believes that digitalisation will only become more influential and prominent in the supply chain industry.

“I think we will see even more

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digitalisation, not just at KWS but also

“We’ve started introducing bots and are

the sector itself,” he affirms. “I believe

looking at our operational purchases of

that strategic procurement will transi-

today and reviewing what their role will

tion from the pure negotiation of finding

be tomorrow,” he explains. “All of our

other added value and move towards

employees in Berlin that are working in

common development with suppliers.

our transaction centre are multilingual

There will be lots

so we’re trying to get connected to all

of new technology implemented that

of our countries. We must take care of

will allow us to manage our day in

the workforce of today to ensure they’re

a quicker and more efficient way and

equipped with everything they need to

the future is bright.” Hagenow adds

succeed for tomorrow.”

that the development of the workforce is essential to long-term success. www.k ws.c o m/ c or p / en /

KWS GRIMSEHLSTRASSE 31 EINBECK GERMANY T +0 55 61/ 31 10

www.kws.com/corp/en/

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