Kärcher - Driving Efficiency

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BUSINESS INTERVIEW

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The supply chain strategy of Kärcher North America is at a crossroads, as it transforms its culture to one of crossfunctional global collaboration.

TIGER BILETNIKOFF, Director – Sourcing & Procurement, Kärcher North America, tells us more.

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Transformation is the word on Tiger Biletnikoff’s lips, as he discusses Kärcher North America’s plan for a global supply chain strategy.

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ith headquarters in Winnenden, Germany, the company is now working towards bringing its regions more closely together. As Director – Sourcing & Procurement, Kärcher North America, Tiger explains, “There are multiple locations throughout the world for Kärcher.

From a transformational standpoint, we are really focusing on more of a global approach with a greater level of collaboration across the different regions. In turn, we can leverage best practises, the existing supply chain, and also focus on consolidation, rationalisation and standardisation of the supply base.”

As is the case for many organisations operating by way of a worldwide supply chain, technology is playing a key role in fulfilling Kärcher North America’s strategy.

AI-powered intelligence provider, Scoutbee, has been assisting the company in obtaining competitive data and business intelligence from the worldwide web in order 5

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to identify potential sources, cost-down opportunities and benchmarking. Tiger says, “Scoutbee has a great AI platform, and we are working with them on having them analyse our supply chain, essentially cross-referencing that against the worldwide web, so you can find competitive data. If you look at import/export, there are a lot of records that are publicly available to review. We are able to get a good idea of the various cost structures that our competitors or others in similar industries are leveraging, so the research that we have to do individually is a lot less.”

The biggest program that Kärcher North America is currently working on is the upgrade of its SAP system to include functionality for supplier collaboration add-on, SNC. Tiger explains, “What that does is it automates and digitises the communication between Kärcher and our supply base. You can avoid emails, Excel spreadsheets and all of the tedious, manual items by creating a web-based portal for our suppliers to interact with us on a digital platform.

Whether it’s deliveries or quantities, whether there are delays or risks, it is all captured 8

Together, we make a difference

“Danau supports the company’s aftermarket business customers, and is a key partner in broadening Kärcher’s product line and offerings” 9

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in real time by the system, so we are able to prepare for any fluctuations or changes in the supply chain. The other advantage is that it allows us to collaborate with our logistics partners on scheduling information, managing transportation, as well as with our Quality organisation, so it is all done digitally, which is driving a greater level of efficiency.”

The reports received from Scoutbee play a vital role in driving efficiency for Kärcher, as Tiger explains, “We can receive reports on a very specific commodity we are monitoring, be it engines or motors. With that information, we can review our current supply base to look at opportunities that would allow us to utilise a different supplier or develop a second source.

Around 10 years ago, if the capabilities were not there or they were not keeping up with technology, we moved on to a new supplier. Those suppliers realised that they were losing business, so they made upgrades. We are now coming back to suppliers we have used in the past, who have invested in their technology, and now match our needs.”

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“Battery technology and energy storage are demanded by our customers, so a lot of our equipment is migrating towards this” TIGER BILETNIKOFF, Director – Sourcing & Procurement, Kärcher North America

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Tiger believes that what this teaches us is that change is necessary, and it is occurring very rapidly. He adds, “Nowadays, you are looking potentially daily or weekly for updates, instead of quarterly or annually. In business, this

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helps us. If we had to source a hard-to-find component through the internet manually, it would take time. When you have these large data management AI tools that can search in milliseconds, they generate more analysis in

one day than we could do in six months. This gives us the information quicker, it allows us to make decisions quicker, and we can then translate that into action quicker than we normally could. Our focus is on building a robust infrastructure

that is both scalable and sustainable through business cycles, market changes, and addresses customer preferences.�

Aside from Scoutbee, Kärcher North America has a number

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TIGER BILETNIKOFF on Delta-Q Technologies

“Having a partner that can keep us on top of the latest trends and technology is essential”

of other key partners who have assisted the sourcing and procurement function in various ways. Delta-Q Technologies, for example, produces innovative battery charging equipment. Tiger says, “Battery charging technology is changing. It is at the forefront of all of our institutional equipment.

Having a partner that can keep us on top of the latest trends and technology is essential. Fundamentally, what it comes down to is how quick you can generate charge cycle on a battery pack for our customers, as they need to have that asset working,

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“Würth is a global partner for Kärcher, supplying the hardware used in their manufacturing facilities”

Supply Chain Solutions Fasteners | MRO |Safety

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Würth Industry North America (877) 99-WURTH www.wurthindustry.com

operable and fully charged. I have worked with Delta-Q in the past, so I am very familiar with them. They are a very strategic partner who can help steer us in the right direction, insofar as not only the applications and equipment, but also staying ahead of the curve of technology.”

Würth is a global partner for Kärcher, supplying the hardware used in their manufacturing facilities.

They have a global network that is positioned to support almost every Kärcher facility in the world, while Danau has provided pump accessories for many years. Danau supports the company’s aftermarket business customers, and is a key partner in broadening Kärcher’s product line and offerings.

In addition, Tiger mentions partners, Frieder Gamm and Logistics Plus. He says, “When you talk about strategy, what Frieder Gamm did was teach our strategic group new negotiation techniques.

Using FBI-related profiling of suppliers, we can generate more effective negotiations. It is one of the most innovative activities I have been involved in over the last 10 years. I have also worked with Logistics Plus 19

for over 13 years. They are at the forefront of leveraging business intelligence and technology for logistics and transportation. They transformed how we do logistics and transportation, and it has driven very significant cost savings, as well as opportunities for improvement that previous

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methodologies and processes did not allow. Logistics Plus therefore provided us with a great advantage in the marketplace.”

Tiger praises Kärcher’s Global VP of Sourcing & Procurement, Heiko Braitmaier, for the company’s migration from regional to a core global

commodity team, leveraging commonality across suppliers and commodities, joint contracts and rationalisation of the supply base to the ‘right size’. He explains, “Heiko is not only one of the best leaders and partners I've worked with, but is, in many cases, a catalyst for many of the strategies we are deploying

and partnering on. We have been on a journey of a year and a half, transforming Kärcher’s sourcing organisation globally. What we are doing is leveraging commonality, not managing by region for region, but taking a global approach.

If you have someone working on gasoline-powered engines, you may not have commodity

“What we are doing is leveraging commonality, not managing by region for region, but taking a global approach” TIGER BILETNIKOFF, Director – Sourcing & Procurement, Kärcher North America

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leaders in each region monitoring that. Now what we do is select one person who is an expert in that field and they collaborate with the regions on centralising contracts that encompass all regions. The advantage is that suppliers have one face. You can also aggregate all of that spend to have better leveraging power than you would if it was fragmented. What Heiko has done is set the organisation on a path to benchmarking internally who the experts are, key suppliers we want to partner with who could support us on a global basis, and implementing contracts that speak for all of Kärcher globally. This has really driven communication, collaboration and team work.”

On the subject of sustainability, battery and storage technology are two areas in which Kärcher North America is focusing its attention. Tiger adds, “Battery technology and energy storage are demanded by our customers, so a lot of our equipment is migrating towards this. From a green perspective, when recharging these assets, you are reducing your carbon footprint. It is the responsible thing for us as an organisation to do, whether

it is a smaller vacuum retail product for the home or a larger piece of equipment. In my experience, energy storage technology has come a long way in the last five years, thanks to the ability to store and recycle that energy with shorter intervals for recharge.”

As for the future, Tiger’s team at Kärcher North America will be exploring business continuity and risk management, where the supply chain is nimble and broad enough to support the company when changes occur.

He concludes, “I went back to university later in my career to get a degree and certification in risk management, so that is where I have been able to provide great benefits, with strategies in place that are able to mitigate potential disruptions, by switching your source of supply, for example.

It is an area that has not as yet had a significant amount of attention. By helping our teams to become more focused, when such incidents do occur, we can support the organisation with minimal disruption, not just for Kärcher, but also for our customers.”

For further information on Kärcher North America, visit www.kaercher.com 23

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