Pool4tool inside international 01

POOL4TOOL

Inside international

Expediting Suppliers with a Single Portal Metso improve their purchasing processes

"All-in-One" Solutions on the Rise Market Experts Confirm the Continuing Trend of Replacing Outdated Supplier Portals

"Thinking Outside the Box" Exclusive interview with Gartner’s top SCM analyst in Europe

March 2015

www.pool4tool.com

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Inside

Thomas Dieringer CEO POOL4TOOL AG

POOL4TOOL Inside goes

international

Vienna, March 2015

Dear POOL4TOOL Community, I am proud to present the first English language edition of POOL4TOOL Inside. After ten successful issues in German, and in light of the increasing demand for an international format, the time has come to take the next step.

What can you expect to find in the international issue?

Look forward to opinions from renowned experts and a preview of trends in SRM. As long-time market participants, we recognize that many isolated IT solutions are unable to handle the more complex processes for sourcing optimization. Today, we replace many individual applications or consolidate isolated solutions in order to achieve a higher level of transparency and to guarantee continuous processes, moving away from the “Best-in-Breed” approach and towards a “All-in-One Supply Collaboration Platform.”

Read about exciting purchasing projects in leading companies from the automotive industry, mechanical and plant engineering, serial manufacturing, and biomedical engineering sectors. World market leader MANN+HUMMEL now has new opportunities to implement more structured key processes thanks to the supply base management platform and category management. Dürr ‑ another world market leader among our clients - knows that a well-managed master database is the best prerequisite for uniform processes in Purchasing, and for the implementation of strategic concepts. You will find additional stories about successful projects from HELLA, Metso and Modine.

In addition to successful optimization projects, we also asked sourcing experts for their opinions. We interviewed Gartner’s leading SCM analyst in Europe, Christian Titze, who gave us a look at the big picture, and spoke about expected developments and the strategic priorities of companies in the future. Heiko Schwarz from riskmethods, the technological market leader for evaluating risk in global supply chains, explained why “solvency is no longer sufficient in supply chain risk management.” The journey ends with an expert commentary from Ulrich Weigel, Head of Global Purchasing at Leica Camera, on current challenges in global sourcing.

I would also like to take this opportunity to introduce a part of the global POOL4TOOL team from our locations in Europe, America and Asia. The US office is expanding, and is ready for continued growth.

We also give the friendly faces voices of our Customer Support team a face as they introduce themselves in this issue.

I wish you an exciting and informative read.

Sincerely Yours,

Thomas Dieringer

Editorial − 3

Imprint Publisher:

Page

POOL4TOOL AG

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Editor: Kathrin Pรถlzl Michaela Wild Art Direction:

Daniela Dornburg

Printers:

Bernsteiner Media Group

Advertisement: Kathrin Pรถlzl inside@pool4tool.com

Visiting Authors Heiko Schwarz, CEO, riskmethods Ulrich Weigel, Head of Procurement, Leica Camera AG

HELLA Full-Service I Hunters aus einer and Gatherer Hand?

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06

POOL4TOOL AG Altmannsdorfer Straร e 91/19 1120 Vienna, Austria Phone.: +43-1-80 490 80 Fax: +43-1-80 490 80-99 Email: office@pool4tool.com DVR-No.: 4010886 Commercial Register No.: FN 64149 m, Wiener Neustadt VAT Reg. No.: ATU 42754907, DE 258634590 D-U-N-S: 30-387-8052 Metso I Expediting Suppliers with a single Portal

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Inside

Content Inside Customers

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Metso I Expediting Suppliers with a Single Portal ............ 06 Bombardier Transportation I Consolidated Purchasing Overview ............................................. 09 Modine Manufacturing Co. I Main Goal "One-Stop-Shop" .... 10 HELLA I Hunters and Gatherers ................................. 12 MANN+HUMMEL I A League of Its Own ......................... 15

Dürr I Two Are Not Always Better Than One Page

36

Dürr I Two Are Not Always Better Than One .................. 19 ZEISS I Focusing on the Supply Chain .......................... 22 Grohe I Individual Solution ...................................... 24

Inside POOL4TOOL Interface Between Client and Company ...................... 26

Inside Partner Prepares for the Growth Page

Supply Chain Risk Management ................................. 30

15 Inside Experts "Thinking Outside the Box" ...................................... 33 SRM Market Changes: "All-in-One" Solutions on the Rise ... 36

Inside International Prepares for the Growth ......................................... 38

Inside Consulting Partners of Purchasing .......................................... 40

Inside Opinion The Chance to Source Globally ...............................

42

MANN+HUMMEL I A League of Its Own

Content − 5

Expediting Suppliers with a Single Portal Editorial

Purchase Order Management I Supplier Management I Advanced Shipping Notification I Quality I RFQ Today, working in the purchasing department at a global enterprise almost always means using business software, such as SAP, for regular day-to-day operations. As new software solutions are implemented within the IT infrastructure, the divisions of purchasing must also follow suit, making sure their technology

6 − Metso I Expediting Suppliers with a Single Portal

needs are met using best practice solutions with all in one stateof-the-art and flexible capabilities.

After a global company-wide rollout of SAP from 2008 to 2011, Metso Mining and Construction, a leading process performance provider within the mining and construction industry, decided they were ready to start implementing the next set of improvements to their purchasing processes and solve some urgent problems they were facing.

Inside Kunden

About Metso: Metso is a leading process performance provider, with customers in the mining, oil and gas, and aggregates industries. Metso's cutting-edge services and solutions improve availability and reliability in minerals processing and flow control, providing sustainable process and profit improvements. Metso is listed on the NASDAQ OMX Helsinki, Finland. In 2013, Metso's net sales totaled EUR 3.8 billion. Metso employs approximately 16,000 industry experts in 50 countries. www.metso.com

When evaluating potential optimization areas, Metso first looked to see how they fared against their competition. It was quickly realized that everyone was using SAP, so the purchasing department at the mining and construction giant decided they wanted to take their business software to the next level. The first process reviewed was operational purchasing. This was an area Metso felt confident in, approving of their processes for requisitions and material planning. Next on the review list was analyzing their processes for direct procurement.

Outdated Supplier Expediting After closely evaluating their direct procurement processes, Metso determined that their procedures for expediting were hindering the purchasing department. The main issue was the extensive use of slow, obsolete manual processes by the buyers.

For example, purchasers were often communicating with suppliers via phone and email. This was problematic because in many cases the information communicated was never officially recorded or documented - employees were never going back into SAP and updating the information. Not recording purchasing information not only affected planning data and forecasts, but it also was inefficient for buyers to spend that much time on the phone.

Downstream processes were also impacted, as emplyees did not have all the knowledge they required.

Metso also discovered that their existing legacy solutions for Contract Lifecycle Management and Supplier Self Service, which were both important areas, no longer would fit into the new landscape and needed to be replaced. The company realized it needed to take action and the purchasing department leaders

decided they wanted to build a system where suppliers could truly expedite themselves.

The Solution The first step in the search for the optimal direct procurement system for Metso was to look at SAP as a solution provider. Not long after reviewing this option, the team at Metso realized that this option was heavily lacking in engineered-to-order functionalities, where sharing drawings with suppliers is very important.

Engineered-to-order functionality was a make-or-break factor and ultimately the company decided to continue exploring their options.

Metso needed a single comprehensive SAP-integrated portal including a quality module to communicate with their suppliers. After evaluating four separate systems the purchasing team returned to their CIO empty handed, unsatisfied with the capabilities of each of these systems. The next move was to consult industry expert research firms, which eventually led Metso to discover POOL4TOOL’s All-in-One Supply Collaboration Platform.

A One-to-One Match After the initial review of POOL4TOOL, the team at Metso knew they had found what they were looking for. “When we were shown POOL4TOOL, whatever requirements we had were met and everything matched one-to-one. We were extremely excited and knew that this was the solution for us,” boasts Srikant Singh, Global Process Development Manager - Procurement, Metso Minerals. To be certain the solution was indeed their best option Metso then evaluated POOL4TOOL from a volume and performance

Metso I Expediting Suppliers with a Single Portal − 7

perspective and reviewed the solution’s global capabilities. All expectations were met and the next steps were blueprinting and implementation.

From a software perspective, next steps for Metso will be seeking future opportunities in sourcing and transportation with the vision of integrating the transportation system with POOL4TOOL.

Smooth Global Roll-Out The first POOL4TOOL blueprinting with Metso began in October 2013, followed by pilot implementations in April 2014. The system then went live in May 2014. The implementation immediately affected two parties: the Metso employees using POOL4TOOL and Metso suppliers. From a supplier perspective the responses to the solution were very positive. POOL4TOOL was easy for suppliers to use, requiring minimal training. One supplier even remarked using the system as being “as simple to use as Amazon.” The purchasers at Metso are very satisfied with the supplier acceptance of the eSolution. The system’s automatic reminders have reduced the workload of the Metso buyers and helped improve supply base maintenance. POOL4TOOL is SAP integrated, allowing the company to also use the platform indirectly as a mechanism to make certain SAP has all of the complete data.

Since the go-live, Metso has already increased their internal users count and will increase on-boarded suppliers to over 1,000 suppliers by 2015. Currently, Metso is using POOL4TOOL’s All-inOne solution globally in their facilities in Australia, Brazil, China, Finland, France, India, South Africa, Sweden, and the United States. Future plans include expanding POOL4TOOL into their facilities in Canada, Chile, Germany, Mexico and Peru.

8 − Mesto I Expediting Suppliers with a Single Portal

» When we were shown

POOL4TOOL, whatever requirements we had were met and everything matched one-to-one.

Srikant Singh Global Process Development Manager, Procurement, Metso Minerals

Purchasing at Metso manages:

375,000 PI items per year

has:

Over 500 Suppliers

Located in: Australia, Brazil, China, Finland, France, India, South Africa, Sweden and the United States

Inside Customers

Consolidated

Purchasing Overview Bombardier Transportation improves data quality with POOL4TOOL Editorial

Spend Analysis I supplier performance I data consolitation multiple ERP systems Shorter development cycles, closer technology partnerships with suppliers, high supply chain quality requirements as well as ongoing monitoring of critical suppliers are all challenges faced in the transportation industry. Bombardier Transportation Thailand is no exception to this – coming to POOL4TOOL with multiple ERP systems and no way to combine information. “It is no simple task for us to use multiple ERP systems and we needed an all-in-one solution to link our ERP systems and streamline data. We opted for POOL4TOOL to consolidate and enable us full visibility on supplier performance modules in order to use this information to drive negotiations with suppliers,” remarks Phumintr Chongthurakit, Project Management Specialist Procurement, Bombardier Transportation.

Combined Analyses Presented on a Single Screen POOL4TOOL’s All-in-One Supply Collaboration Platform is specifically engineered to tackle the cumbersome problems associated with multiple ERP systems. Data from POOL4TOOL and all ERP systems are seamlessly displayed together, ensuring transparency of new connections and relationships. This process enhances data analysis by streamlining all performance measures and other data through a single source, eliminating logistics errors.

“Bombardier Transportation had numerous plants, ERP systems and material number systems. We developed a ‘learning’ mapping mechanism that allowed us to map all spend data into one system and input it into our Spend Analysis,” explains Chandra Hie, Manager of POOL4TOOL Asia Pacific, Pte. Ltd. “The system is semi-automatic and first requires the user to manually assign material numbers of System A to the respective number of System B. It ‘learns’ all of the entered information and the more data are entered the more it works automatically. All non-assigned materials are clearly marked so that the user can look them up and map them as needed.”

Spend Management Single Screen For the company it is essential to know which parts from which countries, of which suppliers are purchased and at what cost.

POOL4TOOL Spend Management for Bombardier is based on a drilldown-principle, which connects invoice receipts with data from the ordering process, material and supplier master data. This process is designed to involve material numbers, which is extremely important to Bombardier as they have a strict policy for assigning material numbers to suppliers.

Remaining Flexible by Tracking Suppliers Bombardier Transportation’s way of remaining flexible, when managing suppliers, is by tracking every move, enabling quick decision making processes in case of supplier incidents. What the transportation giant is doing in particular with POOL4TOOL is using quality related information to better manage suppliers, which can be used to track delivery and material lead-time, as well as the suppliers performance ratings. “Although our requirements for POOL4TOOL are undeniably very complex, we believe the capabilities of the product are very promising,” notes Chongthurakit. Bombardier will continue to use products from POOL4TOOL in Thailand and continue to measure the benefits to decide on possible global rollouts.

About Bombardier Transportation Bombardier Transportation is the rail equipment division of the Canadian Bombardier Inc., headquartered in Berlin, Germany. Bombardier Transportation is one of the world’s largest companies in the rail-equipment manufacturing and servicing industry. They produce a wide range of products including: passenger rail vehicles, locomotives, bogies, propulsion, and controls, in addition to offering a number of services. www.bombardier.com

Bombardier Transportation I Consolidated Purchasing Overview − 9

Main Goal:

»One-Stop-Shop« Modine Manufacturing Co. Streamlines Communication and Standardizes Processes Across Departments and Regions.

Editorial

One-stop-shop I RFQ I Collaboration I Classification Specification Electronic sourcing solutions have gained particular importance today, as they are a crucial part of the purchasing strategy for many enterprises. The goal is universally similar: efficiently conduct and document complex sourcing processes.

Industry leaders, however, are extending this goal across departmental boundaries and seeking to optimize and standardize sourcing procedures between departments within the organization.

This approach to holistically improve and standardize companywide processes is exactly the way global thermal management company, Modine Manufacturing, is headed.

“Our long term goal is to create a one-stop-shop for the management of our supplier business quotation processes. We are on the path to realizing this goal with the support of POOL4TOOL,” remarks Brian Lee, VP Global Purchasing of Modine Manufacturing Company.

10 − Modine I Main Goal: One-Stop-Shop

The global Modine Manufacturing organization, together with the eSourcing experts at POOL4TOOL, developed a unique solution to align their eSourcing solution with the intricate needs of the engineering and purchasing departments. The highly technical nature of Modine’s products requires that the engineering team provides the latest design details and technical specifications to the purchasing group. The purchasing team then needs a streamlined process for communicating these to Modine’s suppliers who are responsible for providing business proposals for the products. The volume of business opportunities and the high variety of parts create workload challenges in managing the data going to suppliers, and in analyzing the supplier business proposals if done using conventional email communications.

Modine has significantly improved this situation by working closely with POOL4TOOL to develop a global sourcing workflow tool that allows for the seamless connection of their engineering department, purchasing department and their suppliers.

Inside Customers

Increased Engineering Functionality The result was the implementation of an “Engineering RFQ” workflow, which allows the engineer to initiate the quotation process by providing the drawings and technical specifications for all parts in the bill of materials (BOM) to the purchasing group using a standardized Excel template or by directly entering the data in the eSourcing application. The concept allows engineering users to either upload an Excel spreadsheet containing the Bill of Materials (BOM) for the parts to be requested for, exported from their CAD/PLM systems or to manually select required articles from the existing material database. This process is entirely optimized for engineers and provides a specific user interface for engineering users which is fully available in ‘engineering language.’

When an engineering request is submitted, a standardized RFQ will then be automatically created in POOL4TOOL and forwarded to the responsible buyer in order for him to continue the sourcing process. “With our highly flexible platform, Modine can monitor and control the sourcing workflow across departments and around the world in a single solution. This helps our client to reduce material and process cost,” comments POOL4TOOL Project Manager, Michael Kern. Around 90 percent of all RFQs for direct materials at Modine go through the eSourcing workflow, initiated by the engineers.

purchasing organizations communicated internally by exchanging complex and non-standard spreadsheets via E-mail. In many cases, subsequent revisions were communicated verbally. The new eSourcing workflow requires that the information is communicated via the workflow. Revisions are documented within the system, which improves version control. In the past, purchasing was sending RFQ’s to suppliers using excel spreadsheets and drawings attached to emails to the individual suppliers. The complexity of these email communications led to delays, confusion and significant transactional work for the purchasing organization to consolidate, review and validate the multiple supplier proposals.

The eSourcing workflow significantly simplifies the communication process resulting in improvements in speed, accuracy and crossorganization communication.

Since the new eSourcing workflow is in place, it is much easier for the engineering department and the purchasers to work together and it has become the main communication basis between the two groups. The prior manual, email and document based communication has been replaced by a fully automated and auditable solution.

RFQ Process Visibility The creation of a standardized RFQ, which can be understood across departments and by Modine’s suppliers was another key requirement set by Modine. The eSourcing workflow provides the necessary quote visibility within Modine, allowing the purchasing group to review and validate supplier quotes before making them visible to the rest of the organization. Likewise, the system allows the suppliers to have access to their submitted business quotations, providing transparency to the quotation history.

Including Crucial & Complex Specifications The main focus was to simplify the communication within Modine and with Modine’s suppliers. Previously, engineering and

About Modine: Modine, with fiscal 2014 revenues of $1.5 billion, specializes in thermal management systems and components, bringing highly engineered heating and cooling technology and solutions to diversified global markets. Modine products are used in light, medium and heavy-duty vehicles, heating, ventilation and air conditioning equipment, off-highway and industrial equipment and refrigeration systems. Modine is a global company headquartered in Racine, Wisconsin (USA), with operations in North America, South America, Europe, Asia and Africa. For more information about Modine. www.modine.com.

Modine I Main Goal: One-Stop-Shop − 11

Hunters and

Gatherers

How the HELLA Corporation pools their global demands Editorial

Globalization I Demand Planning I Interface I RFQ Request Process I Forecast You are probably familiar with this situation: You are getting ready to go to the grocery store and have written a shopping list of everything you plan to buy. Before you leave the house, you ask: “I’m going shopping—does anyone need anything?” Someone from the living room yells: “Coffee...and milk!” From the kitchen you hear “Chocolate, please!” and another voice: “Yeah, for me, too!” The person in the living room has remembered something else: “And if you’re buying bread, could you get some for me?” This is a classic example of the central pooling of demands.

However, while this approach may work quite well in a small group, it becomes an enormously complex process when applied to a global business, particularly in the case of corporations like

12 − HELLA I Hunters and Gatherers

HELLA, which has over 100 locations worldwide, and must also manage direct purchasing for development centers, field offices, and production plants. HELLA is a specialist in the field of innovative lighting engineering and electronics for the automotive industry. The company’s various locations often have differing and very specific demands, but there is also overlap. Some products or parts are needed in multiple locations. These could be pooled if each location would list and standardize demands, communicate them centrally, coordinate and confirm them. This is a task that is not feasible without the assistance of IT automation.

New Solution for Global Purchasing The leaders at HELLA were already aware of this fact. The previous IT tool that was used for coordination processes was soon unable to cope with the increase in diversification. As an isolated ap-

About HELLA HELLA is a global independent family-owned company with more than 29,000 employees in more than 100 locations in more than 35 countries. HELLA develops and manufactures components and systems of lighting engineering and electronics for the automotive industry, and has one of the largest trade organizations for automobile parts, fixtures, diagnostics and services in Europe at their disposal. Complete vehicle models, heating and cooling systems, and on board power suppliers are also created in joint venture companies. More than 5,500 employees are working in research and development, which makes HELLA an important innovator in the market. In addition, HELLA brought in more than 5 billion Euros in the 2012/2013 fiscal year, making it one of the top 50 automotive suppliers worldwide, and one of the 100 largest industrial companies in Germany. www.hella.com

plication, it required frequent maintenance and left something to be desired in availability and user-friendliness. “Our company had grown from a mid-range company to a large corporation, with a yearly growth rate of more than 10%,” explains Joachim Ziethen, Serial Purchasing Manager at HELLA. “This also means that Purchasing continued to grow and to complexify, while at the same time, more employees had to manage more budgets. The growth resulted in more complex processes in Purchasing and increased demands that could no longer be met by the previous application”. The company began searching for a professional solution to help them tackle these challenges. “The new IT landscape must be able to operate globally and make our Purchasing organization significantly more efficient.” Obviously, there are several IT service providers who could offer software for sourcing optimization. But finding a single solution that could effectively pool and display demands from different locations and combine them into a single RFQ to send to suppliers was

less easy to find. After sifting through various IT service options and after talking with multiple sources, HELLA finally decided to choose POOL4TOOL as their IT partner. The innovative leader in the field of eSolutions was able to win HELLA over with their technological concept, their experience with linking interfaces to SAP, their database competence, and the security concept behind their solutions.

New Level of Demand and Purchasing Management The primary demand that HELLA submitted to POOL4TOOL was the need for software that would allow HELLA to operate globally, allow demands in Purchasing to be bundled effectively, and make it possible to submit targeted inquiries to suppliers and manufacturers. The IT specialists at the Vienna-based company designed and developed a

HELLA I Hunters and Gatherers −13

new and completely custom-made application using HELLA’s awards database that brought the management of demands and Purchasing to a new level. “Our demand planning at HELLA is conducted via the SAP ERP system,” explains Joachim Ziethen. “A special forecasting system shows us which products will be needed in certain vehicles in the automotive industry within the next two years.” This forecast is part of the company’s global demand forecast and includes current market data and precise project commissions from HELLA’s clients. The demands are registered in the SAP ERP system; the POOL4TOOL requirement bundling module (eRFD) acts as a point of consolidation, gathering the data from the SAP system and from non-SAP locations that are not directly connected to the platform. Purchasing is directed from the company’s headquarters. Which materials need to be procured, and in which regions, is determined after examining the data. Semi-conductors and granulates, for example, are needed frequently in most locations, whereas mechanical parts are usually regional. “We use the new tool for global categories in particular,” explains Ziethen. “If the same electronic or electromechanical parts are needed in plants in China, Germany, Romania and the USA, these demands will be bundled first before making inquiries. This provides us with an improved negotiating position.” An overview of all of the demands can be seen easily with a simple click. “We can constantly monitor different items in different factories, and which demands there will be within certain periods. In addition, HELLA can make the entire RFQ process more efficient by using the portal.”

Return to Core Business "The time we save is significant,” Joachim Ziethen is convinced. “Previously, we spend 70% of our time gathering data, adjusting standards, entering data into the system, and analyzing it for plausibility. There was not enough time for actual negotiations. Now, our administrative processes have been streamlined. We can focus on our core task: negotiating competitive prices for the product components.”

The web-based portal POOL4TOOL, which will be rolled out globally, functions first and foremost as a purchasing tool for strategic pricing. Contract Management and plant logistics could also be done with the software to check which conditions have been agreed upon with a specific supplier, for example. The options are virtually limitless.

The Challenge of Big Data Martin Högler knows all about the programming behind the solution.

The POOL4TOOL consultant worked with HELLA from the beginning of the project and knows what the client and IT team achieved: “The new awards database needed to combine supply base data from ten SAP systems. This included not only the master data, but also all releases that were listed for a supplier or manufacturer” the project manager explains. “This posed the considerable challenge of creating a unified database from ten different sources.” Performance also had to be reengineered because the data in question was so large. “Big data requires an entirely different level of performance. The new tool makes it possible to create 200 RFQs in 15 minutes. This process runs in the background so that the purchaser can complete other tasks in the meantime.” After the initial inquiry, suppliers can log into the portal and submit their offers using Excel-Upload or by using the input fields in the browser, and the system adds the data to the comprehensive database.

14 − HELLA I Hunters and Gatherers

Purchasing at HELLA is: centrally managed with independent purchasing organizations responsible for local purchasing manages:

2 billion EUR of revenue for production materials

purchases:

goods & services from 120 categories

has:

3,000 suppliers

creates:

200 RFQs in 15 minutes with POOL4TOOL

A League of Its Own Reach strategic purchasing goals with the right supply base Editorial

Category Management I Regional Classification Approval Workflow I Supplier Registration MANN+HUMMEL is a sought-after development partner and series supplier for the international automotive and mechanical engineering industries. The vision of the well-established company is clearly defined: "Leadership in Filtration.” The company’s

claim to leadership in the filtration market brings a great deal of responsibility to the clients, employees, and suppliers along with it. Despite difficult framework regulations and economic uncertainties in recent years, MANN+HUMMEL’s position has been secure. The company’s continued efforts to work on and improve the foundation for lasting growth has played a significant role in its success. The midterm forecasts have been positive: Market research institutes predict an approximate 7% increase in growth

MANN+HUMMEL I League of Its Own − 15

within the filtration market by 2020. As an innovative leader, MANN+HUMMEL does not want to just share in market growth, they want to actively contribute to it and drive it forward. The requirements to achieve this have already been established, including some more specific points that have come up in the past several years. This is also happening in Purchasing.

Global and Local Efficient and standardized processes are essential for planned growth at MANN+HUMMEL, and purchasing is not exempt.

MANN+HUMMEL’s global purchase volume reached nearly 1.7 billion Euros in the previous year. This amount can be broken down into 69% production materials (steel, punching and turned parts, filters, chemicals, seals, etc.) and 31% trade goods, non-production materials and services. Central Purchasing at MANN+HUMMEL is responsible for the planning and organization of global purchasing. Strategic category management is also controlled centrally, has a global mandate, and covers more than 90% of the company’s purchasing volume for production materials worldwide. Project and series purchasing is carried out locally at more than 40 locations.

"One portal towards the supplier" “Only with the right supply base can MANN+HUMMEL continue to put innovative, high-quality products on the market and achieve its strategic goals,” explains Hanno Höhn, Group Vice President of Purchasing at MANN+HUMMEL. “An important step towards improved and smooth cooperation with vendors has been POOL4TOOL’s supply base portal, which we implemented in 2011.

It serves as the foundation for implementing supply base strategies for specific categories.” The implementation of the supply base portal has many advantages. Previously, suppliers would have to work with multiple systems. The existing systems and functions are now gradually integrated into the new supply base portal so that the suppliers only need to use one system. The platform brings the purchasing organization one step closer to their vision: “One portal, one face towards the supplier.” There are considerable advantages for Purchasing as well, particularly in the integration and automation of purchasing processes. Both paper and online forms were used in the past, which led to unavoidable media disruptions. By integrating different process steps, the supply base portal helps purchasers work more efficiently and provides them with a more holistic information database about suppliers.

Sourcing Council-Extended

Corporate Purchasing Organization and Planning

Strategic Category Management

Project Purchasing

Serial Purchasing

Global

Global

Global & Local

Global & Local

Supplier Quality Development

The Strategic Category Management has a global mandate and covers about 90% of the purchase volume of production material around the world.

16 − MANN+HUMMEL I League of Its Own

About MANN+HUMMEL MANN+HUMMEL has been writing filtration history for more than 70 years.

Quality, service and innovation make this traditional company a highly sought-after development partner and series supplier for the international automotive and mechanical engineering industries.

Nearly 14,400

employees in more than 50 locations brought in revenue amounting to approximately 2.6 billion Euros in 2012. MANN+HUMMEL serve the automotive industry and industrial series and replacement parts market.

The product portfolio for the automotive industry includes air filtration systems, liquid filtration systems, interior filters and synthetic cylinder head covers with a high level of integration as well as filter elements for maintenance and repair. For mechanical engineering, process engineering, and industrial manufacturing, MANN+HUMMEL offers industry filters, a program for reducing soot emissions in diesel motors, membrane filters for water filtration and filter systems www.mann-hummel.com

The modular design of the eSolution makes it easy to expand functions step by step.

It Depends on the Category Supplier registration and approval is very complex at MANN+HUMMEL, and is completed via the supply base portal.

Suppliers register themselves online and fill in a category-specific questionnaire. The specialized approval process has multiple steps and is unique because MANN+HUMMEL differentiates between suppliers for production materials and suppliers for non-production materials and services when completing the registration and approval process. Depending on the type of commodity, a different internal approval workflow is initiated.

While the approval process for suppliers of non-production materials is operated by the Purchasing Managers at each location, the approval of suppliers for production material is completed by lead buyers for the corresponding categories. Precise information about each supplier’s performance, which is critical for the decision-making process, is gathered from the questionnaires.

“Information about suppliers, categories, conditions and prices all come together in one central location in the system, and form the basis for all significant tactical and strategic sourcing processes,” Hanno Höhn, the Group Vice President of Purchasing at MANN+HUMMEL confirms.

MANN+HUMMEL has high expectations and requirements for their suppliers when it comes to quality, which is why the initial approval is only finalized after an audit carried out by Supplier Development. This department is informed about the supplier via e-mail early on in the approval process, and can initiate activities, such as audits, beforehand. The online portal makes it much easier to manage these differentiated and standardized processes, and is therefore necessary to ensure an optimal supply

base. Despite a high level of standardization, specialized regional requirements sometimes demand a specialized solution within the system, for example, the tax system in Brazil and Argentina may automatically ask suppliers for all legally required tax information during the registration process.

A League of Its Own Once a supplier has been approved, they are automatically classified at the regional level in order to evaluate local and global demands in the entire MANN+HUMMEL portfolio. This makes the

POOL4TOOL opens up the possibility to implement strategically important processes even more efficiently, and to improve the control of purchasing at a global level.”

Hanno Höhn, Group Vice President Purchasing, MANN+HUMMEL

Purchasing at MANN+HUMMEL Group manages:

EUR 1,757 billion purchasing volume

purchases: Production materials (69 %) as well as goods, non-production materials, and services (total of 31 %) has:

total of 15,000 suppliers

MANN+HUMMEL I League of Its Own − 17

entire supply base strategy more efficient and helps to control the number of suppliers for each commodity. The regular classification of suppliers within the portal is the basis for identifying strategic gaps between the current strategy and strategy derived from MANN+HUMMEL’s supplier portfolio. Based on the standardize classification, the requests are channeled to suppliers taking into account their potential for development. For the supplier, this means that targeted communication and cooperation based on the motto “Connected for success” is guaranteed.

eRFQ: Strategic Suppliers Preferred Processing RFQs via the supply base portal makes things much easier for Purchasing. The eRFQ allows buyers to create an RFQ directly in the system and send it to selected suppliers via email. Suppliers then submit their offers online, where they can then be compared automatically with the Quote Comparison feature, which includes a standardized cost break down. The standardization of the entire RFQ process within the corporation increases process quality significantly. Standard documents, such as purchasing requirements and norms, are available to buyers in one central location and in their most up-to-date versions.

New Suppliers

Within the framework of eRFQs, only those suppliers who have a "preferred”, “potential”, or “approved” status within their specific commodity and region can be selected in RFQs. This allows MANN+HUMMEL to focus on strategic suppliers for new contract awards. Adding suppliers with the status “blocked” is prevented.

Having the entire RFQ process operate on a single platform avoids overlap of partial processes, thereby increasing efficiency and transparency. Since all of the RFQ information is submitted to one location in the platform, these data can be easily analyzed and serve as a good basis for negotiations with suppliers. The tracks have been laid to set the course of growth at MANN+HUMMEL, and the focus must now turn to the consistent implementation of the purchasing strategy and the continued development of the supply base portal. In order to further increase efficiency and secure Procurement’s success, new sourcing processes and systems were rolled out in 2012. MANN+HUMMEL’s internal workflow to direct ordering and approval processes were introduced in ten additional locations. Within the framework of expanding POOL4TOOL’s supply base portal, eight more locations have begun using electronic RFQ’s after receiving the necessary training. This progress will continue. MANN+HUMMEL plans to start conducting the award process for RFQ’s using a workflow in the portal soon.

This step will further improve process consistency.

»

Potential

Boarding

Classification

Supplier Management

nce ma or

Pe rf

Declined/ No Boarding

g rin to i n

Approved

Evaluation (Regularly)

Mo Phase Out

Approved/Preferred Blocked Development

The POOL4TOOL eSolution is the base on which MANN+HUMMEL implements supplier strategies for each category.

18 − MANN+HUMMEL I League of Its Own

Two Are Not

always Better Than One

Master data transparency is half the battle when it comes to supply base management. It may not be easy to get there, but it is worth it.

Editorial

Supply Base Management I SRM I Duplicate Check I Category Manager I Approval Workflows Creating a single database for all locations and IT systems and replacing manual processes with workflows is a difficult task. What would already be a challenge for a mid-size company

turns into a gargantuan task for an international manufacturing company with structures that have merged over time, resulting in a number of complex processes. The goal is quite ambitious: standardized processes in Purchasing and a lead buyer concept for multiple purchasing organizations in order to establish supply base management as a central information source for important decisions in Purchasing.

DĂœRR I Two are not always betther than one − 19

Heterogeneous and Complex The Dürr Group is a company with structures that merged together over time. The German world market leader in paint,

Dürr AG Dürr group is one of the world‘s leading suppliers of products, systems and services, primarily for manufacturing automobiles. We offer important stages of vehicle production. As a systems supplier, we plan and build paint shops, final assembly facilities assembly systems for the aviation industry and air cleaning and filtration systems. Furthermore, they offer cleaning and

balancing, and cleaning technology is an engineering company with subsidiaries in 23 countries, 48 locations and more than 30 production plants. The company is shaped in part by different processes, IT landscapes and SAP systems. Dürr’s eleven German locations work with different procedures and four different SAP systems. The environment of the company’s purchasing organizations is equally complex because they operate independently to a great extent. This complexity is accounted for by very specific product spectra, different commodities, and individual supply base development strategies within the various organizations. Cooperation between individual locations, departments, and with the suppliers is therefore also complex.

In the past, the lack of consistency for the processes led to a large amount of additional work for the buyer, who had to enter data multiple times into different IT systems, as well as a lack of transparency in supply base management.

filtration plants for the manufacturing of engine components and transmission components as well as balancing systems and products for final vehicle assembly. Worldwide, approximately 60 percent of all paint shops and 50 percent of all fittings plants are equipped with Dürr technologies. Global presence, a distinct culture of innovation, and customer orientation are the basis of the company’s leading market positions. The company has 7,300 employees and is directly represented in 23 countries. In 2011, Dürr generated annual sales revenues amounting to approximately 1.9 billion Euros www.durr.com

20 −DÜRR I Two are not always betther than one

Clear View of Suppliers In 2009, Dürr decided to implement an online supply base portal that would support internal communications between the Dürr locations and cooperation with suppliers throughout all the phases of supply base management—from supplier registration to the continued development of the preferred suppliers' performance. Within the framework of this project, Dürr created a standardized database in supply base management across four SAP systems for all of its sites in Germany.

Purchasing at Dürr manages:

EUR 1,300 million purchasing volume

purchases: Steel structures, fittings, production parts, and the whole spectrum of mechanical and plant engineering

As an add-on to SAP, POOL4TOOL’s supply base portal functions as the main communication and data hub for international purchasing organizations and for suppliers. For the first time, purchasers within the Dürr Group can access standardized information, regardless of their location or of the SAP system they are using. The supplier master data, including categories, certificates and production technologies, as well as supplier scorecards, framework contracts and the purchasing volume can all be found in a central location. Changes made to the SAP supplier master data from the different purchasing organizations are synchronized automatically with the supply base portal. This allows changes made to entries in one of the systems to be transferred automatically to all the other systems, thereby reducing the amount of maintenance work for Purchasing. With its high level of consistency, POOL4TOOL strengthens supply base management by providing meaningful information that is critical for purchasing decisions. Dürr directs supplier registration and supplier approval using a workflow with an integrated function that automatically checks for duplicates before entering information in SAP. This guarantees a consistent and accurate database without any additional manual effort. Using Supplier Self-Services, vendors can enter and update their data themselves. The management of contracts, certificates and documents is also controlled by a workflow, minimizing the amount of monitoring required. Processing unsuitable suppliers is also avoided from the beginning, because only applicants that have been approved in the first part of the

is:

organized as a matrix

uses:

SAP 6.0

workflow will be forwarded to the Category Manager for a final evaluation.

Relationship Building The supplier scorecards were integrated into POOL4TOOL as a central instrument of supply base management, replacing the previous Excel-based solution. This makes it possible to conduct even complex performance ratings on several levels, such as location, project, or category. The easilyaccessible overview of supplier performance shared by different purchasing organizations makes it easier to develop common suppliers more effectively. Suppliers can see their scorecards immediately in the portal. This high level of transparency contributes to a mutal understanding and creates a foundation for cooperative supply base development.

Additionally, Dürr has implemented long-term supplier declarations with improved features and data sheets, including customs clearing, REACH conformity, RoHS conformity and WEEE guidelines, and safety regulation documents. Dürr has successfully implemented a global platform for critical supplier processes. Communication between suppliers and the entire company is now more efficient and transparent, which ultimately benefits the company’s global purchasing activities.

DÜRR I Two are not always betther than one − 21

Focusing on the

Supply Chain

Editorial

High Tech I Globalization I eProcurement I eSourcing Core Application I Collaboration The name ZEISS represents the highest quality, precision, and innovation. This is reiterated through the product portfolio and company processes. Speed, consistency, and process security in the supply chain are critical, which is why the ZEISS Corporation completely re-structured their global procurement processes from the supplier to the customer. This ambitious project began in 2007 with the goal of creating a cross-functional network of processes for all locations that would use internal and external IT systems from high performance partners.

and locations. The six company branches and the 13 strategic business units are largely autonomous, which required to keep the balance between autonomy and commonalities. The processes also had to be as flexible as possible to maintain the company’s competitive edge in such a dynamic market environment.

The Solution ZEISS chose to work with the solution partner POOL4TOOL to assist them with communication with suppliers and to reduce the workload of the Purchasing Department. Global sourcing logistics, goods receipt, and eSourcing were improved and reengineered

The Challenge ZEISS is a market leader within many of the company’s fields, and offers a wide range of technologically sophisticated applications.

This level of complexity is also reflected in the sourcing spectrum, which is why Purchasing plays a vital role in the success of ambitious, technologically driven projects. ZEISS’s supply chain begins with the suppliers and ends with the final customer after going through a series of internal processes. This is why ZEISS opted for a companywide logistics project that would focus on implementing a solution that would extend across departments

22 − ZEISS I Focusing on the Supply Chain

Lothar Färber Vice President Procurement I Carl Zeiss AG

Inside Customers

over four project phases, thereby covering the entire supply chain.

In the first phase, ZEISS concentrated on global operative purchasing, which is a classic weak link in the supply chain.

Purchasing at ZEISS runs through the purchase order and confirmation processes all the way up to the delivery of goods using the new eSolution. Purchase orders are automatically taken from SAP and transferred to POOL4TOOL, where they are made available to suppliers. The order confirmation is created in the portal and sent back to SAP or directly transmitted via EDI. The fully automated and thus simplified communication from POOL4TOOL with third-party systems contributes to reductions in process costs for each order. Each process is documented on one central platform, which means that buyers can rest assured that the purchase orders are forwarded correctly and on time.

The shorter processing times and the increased quality of results allow Purchasing to focus on more strategic topics. WebEDIs used for delivery schedules, advanced shipping notification, and VMI also resulted in increased efficiency in the goods receipt process.

POOL4TOOL’s VMI module allows stock inventories, upper and lower limits, as well as demands to be exchanged between SAP and the supplier via the online portal. Based on ZEISS’s current stock inventory and forecasts, suppliers can independently

schedule deliveries and optimize production quantities, transport quantities and delivery deadlines. They can also use this information to adjust their own production cycles to match ZEISS’s delivery schedules.

Delivery and cumulative received quantities, such as transit quantities, are transferred directly from the SAP system. The seamless documentation of all processes and the availability of data on one central platform offer new information and controlling options.

Collaborative Processes ZEISS does not limit collaboration with suppliers to data exchange or sourcing-related logistics, but rather searches for new ways to increase the value of all collaboration partners. This is why the POOL4TOOL Portal was constantly expanded to include solutions for eSourcing and strategic supply base management based on ZEISS’s specific category structure, as well as processes releated to Quality Management. In order to allow for the pooling of demands and to create the foundation for global category management, eClass was introduced as the standardized category structure for the entire company. This paved the way for implementing POOL4TOOL’s concept, which would reduce ZEISS’s costs significantly over the next years.

About ZEISS ZEISS is an international leader in the field of optics and optoelectronics. More than 24,000 employees brought in 4.3 billion Euros in revenue in the 2012/13 fiscal year. Oberkochen is the headquarters of the company, which was founded in 1846 in Jena. ZEISS has contributed to more than 160 years of technological advancement. The company develops and manufactures applications for the semi-conductor, automotive, and mechanical engineering industries, biomedical research, medical technology, such as lenses for glasses, film and camera lenses, binoculars, and planetariums.

ZEISS is present in more than 40 countries in the world with more than 40 production locations, and approximately 50 service and sales locations, as well as more than 20 research and development locations. www.zeiss.de

23

Seamless

Match

Highly Consistent Solution for Highly Complex Logistics Requirements Editorial

Logistics I Vendor Managed Inventory (VMI) I POM Forecast I Realtime The high quality fittings from Grohe are seamless and appear to be made from one piece, but before becoming a finished product all of the individual components and materials must first go through many steps in one of Grohe’s six factories. More than

50% of the company’s products are manufactured at the three German plants, but purchasing is global, and the clients are also spread arround the world. This leaves the company facing quite a difficult challenge: Components and materials often have long transport times, but the items must be centrally available so that Grohe can quickly equip each plant on site to respond to any order, regardless of how large it might be. Grohe uses POOL4TOOL to address this complex logistics issue.

Lothar Färber Vice President Procurement I Carl Zeiss AG

24 − ZEISS I Focusing on the Supply Chain

Inside Customers

The Challenge Grohe started working with POOL4TOOL in 2012. The previous IT system was not flexible enough to grow along with Grohe’s visions.

POOL4TOOL’s uniform platform also offered modules that could be useful for Grohe’s supplier relationship management in the future.

The introduction of a new platform for VMI (Vendor Managed Inventory), which would help keep suppliers organize their own deliveries based on the company’s current inventory and precise forecasts, was the most convincing factor of all. This eliminated the ordering process at Grohe completely, and helped suppliers optimize their own processes as well. Purchase volumes and the number of suppliers under this management are considerable. In total, the company conducts storage procedures for 2,000 items in VMI, and for 20,000 more components that are provided by 400 suppliers.

Today, 10,000 purchase orders are conducted via POOL4TOOL each month. The numbers indicate how complex the requirements are for the IT solution. Grohe outlined exactly what the portal must be able to achieve, and brought in very specific ideas about the forecasting system and the VMI. All of the processing routines were newly developed in order to precisely address the tiniest details, processes, and demands in the solution. Now, all transactions and purchase orders are conducted using POOL4TOOL.

Dialog Perfects Processes Thanks to the POOL4TOOL VMI solution, many processes at Grohe have become more efficient and transparent. Demand in the stock inventories is indicated using graphics, making the display much easier to understand. Suppliers can respond more quickly and make more precise deliveries, and Grohe achieves increased efficiency in production and shipping the goods. The platform allows for a dialog between the purchaser and the supplier. Grohe can share when

the manufacturing of a product is scheduled, and the suppliers can check which items they can deliver and when.

The supplier then informs the manufacturer which quantities they can expect on which day. This also allows factories to accommodate partial deliveries with multiple delivery dates and quantities. This ensures that there is no idle time in between. Both business partners take on their highest possible workload. Grohe’s suppliers can now view the updated status of each project, from the submission of a client’s order, to production, the division of the item lists, and procurement so that they can prepare accordingly. Grohe and their business partners achieve savings in POM, production, storage, commissioning, and transport.

About Grohe As a part of the GROHE group, Grohe is the largest provider of plumbing fixtures in Europe, and a leading manufacturer worldwide. As a global brand for plumbing and heating products and systems, GROHE relies on the brand’s values of quality, technology design ad sustainability in order to provide a “pure enjoyment of water.” The Grohe group is based in Hemer, and their corporate center is in Düsseldorf.

The company employs 9,300 people worldwide. In 2013, the GROHE group brought in a consolidated turnover of 1,45 billion Euros. The GROHE group has nine manufacturing locations, six of which are in international locations. www.grohe.com

Grohe I Individual Solution – 25

Interface Between

Client and Company The POOL4TOOL Customer Support Team introduces itself Editorial

First Contact Person I Consulting I Incident Ticket International I Feedback

The Customer Support Department within a company has many responsibilities: They are the first people to contact if there are problems with the system, they are the direct contact persons for user questions, and they are the linchpin of communication between the company and its customers. POOL4TOOL Customer Support’s primary goals are to respond quickly to questions and problems, to offer support throughout the (international) rollout

26 − Interface Between Client and Company

process, and to ensure the highest possible level of use and efficiency. POOL4TOOL Premium Support guarantees that investing in an SRM solution pays off more quickly, and that the client’s own purchasing team will receive all of the support they need, particularly during the implementation phase. POOL4TOOL explains what goes on at Customer Support around the clock, and introduces the teams at the other end of the hotline.

Technical competence, stress resistance, and language skills are the main pre-requisites for becoming a member of the Customer Support team at an international company providing IT services. At

Inside POOL4TOOL

POOL4TOOL, the Support team is comprised of fifteen members, who are spread out across three locations worldwide, with the majority located at the company’s headoffice in Vienna. They communicate in 13 languages via the channels preferred by the client: telephone, email, or Support Ticket. But once the information is received, what is the process that leads to a solution? How does the Support team maintain an overview of all of their clients' questions and demands, and how do they work together with other departments?

notification sent in by a user. A support ticket is created for each incoming notification that includes all of the details from the request (e.g. contact person, module, and problem description).

An average of 400-500 support tickets are generated each week.

The seamless documentation of each client request guarantees the highest level of transparency for all error reports and support questions.

Classify and Prioritize

Application Management Customer Support’s main responsibilities fall under Application Management and Event Support, and nearly 80 % of their time is devoted to Application Management. The most frequent questions are related to problems with logging in and with the so-called “Certification Requests,” meaning the required data check for new suppliers. The trigger for the processing procedure is a

As the first contact person, Support must accept the request. When creating a support ticket, the first step is to classify and prioritize the reported problems, and to also initiate the corresponding solution process. If the issue is a language problem or how to use the tool, the team provides immediate assistance, and is usually able to close the ticket in one step; the ticket in this case is merely used for reporting purposes. If there was a system error,

Customer Support Customer

POOL4TOOL Customer Support Project Manager

Detect a problem

SAP Competence Center

Create ticket Systemadministrator

Report in the agreed response time

Software Development Check current status

Solution in the agreed response time

Classify problem

Solve the problem

Detect a technical problem

Confirm solution

Application Management: Clearly defined solution processes

Interface Between Client and Company − 27

Thomas Winkler I Pascale Macchi I Warrent Mendivil I Doris Krumpeck I Matthias Singer I Jarmila Khorrami

Support must first see if the problem can be reproduced. The exact steps that led to the problem are recorded mouse click by mouse click in an “Incident Ticket” and screenshots, videos and comments are also included. 5-10% of Support requests require an Incident Ticket, which is then passed along to the necessary department. In 80% of such cases, the Incident Ticket is forwarded to the Development Department, and the others are usually sent to Project Management (in the case of incorrect customizing settings), or, in very rare cases, to System Administration or to the SAP Competence Center (in the case of interface problems).

Very complex cases are checked and tested thoroughly by Support before creating an Incident Ticket in order to relieve the Development Department as much as possible.

Feedback As soon as an Incident Ticket is sent back from the corresponding department, the Support team tests the results, translates the feedback (cause and prevention measures) into user-friendly language, and makes a note of it in the Support Ticket before sending back the final feedback to the client. The client decides if the case has been resolved to their satisfaction, and the ticket is then closed.

The client may access their open and closed tickets at any time in order to check their status. As an additional service, Customer Support sends weekly reports on critical tickets to key users.

28 − Interface Between Client and Company

Event Support Support is not, however, just a place to report questions and problems. In addition to managing problems, Support also provides users with online training sessions on how to use the tool correctly, and offers professional and highly competent support during sourcing events (e.g. eAuctions), from the beginning to the end. In order to relieve the client’s Purchasing department and to increase the rate of return for bids, Support actively monitors clients’ most important sourcing events if the client has requested it. In this case the following applies: After sending an RFQ or an invitation to an eAuction, follow-up calls are made to the suppliers to inform them of the upcoming event and of the relevant procedures, and to organize training sessions with the suppliers. If this is the case, a detailed feedback report is sent to the buyer before and after the completion of these training sessions to inform the buyer of any possible complications so that they can prepare accordingly.

For RFQs, a reminder call is sent to all suppliers two days before the bid deadline if no bids have been submitted, or if participation was declined. In the case of eAuctions, a similar reminder call is made 15-30 minutes before the auction is set to begin in case the supplier is not yet registered in the system.

The auction is constantly monitored until the end by at least two Support employees in order to answer as quickly as possible to any questions that may arise.

Support North and South America Mon - Fri 9 AM - 5 PM EST +1 248 244 0851 210 Kendra McKinney

Support North and South America Isabela Hollanda

Support Asia Mon - Fri 9 AM - 5 PM SGT +65 656 280 60

Support Europe Mon - Fri 9 AM - 5 PM CET +43-1-80 410 50

Rollout Support Often, there are no resources in Purchasing for special projects or services. However, since consistent and extensive use on the part of the suppliers is a critical success factor in any SRM project, vendor on-boarding is one our client’s favorite service. This involves relieving the purchasers by training the client’s vendors on how to use the tool, and familiarizing them with the specific processes. Support goes through the registration process step-bystep with the users on the supplier side. Customer Support is also able to train suppliers on the modules used by the client using test orders and RFQ’s. At the end of each training session, suppliers are left with contact details for Customer Support in case they have any questions or problems. As part of vendor onboarding or as a regular additional service, checking data quality is also a key factor for the success of SRM projects. Checking supplier data and profiles for completeness and correctness is essential in order to avoid to blindly trust the information given by the suppliers.

Audrey Tan

(Vienna, Detroit, and Singapore). All notifications land in one pool in the form of a Support Ticket, meaning that all team members have the same information about the needs and concerns of the clients. Regular telephone conferences assist with internal coordination or with feedback. Because they are located across the globe, the Support Team remains easily and consistently reachable, and ensure that they can also be reached during local holidays. The diversity of the team and their understanding for regional details, increase their ability to solve problems, and, as a result, customer satisfaction. And this is the primary goal of POOL4TOOL’s Support Team.

The Support Team POOL4TOOL has 15 employees from 9 nationalities

Internationality as a Priority Client’s problems very often stem from language-based misunderstandings, and can be solved very quickly thanks to the linguistic diversity within the Support team. Nine nationalities are represented in the Support team, distributed in three locations

responds in 13 languages processes 400-500 requests per week monitors approximately 150 sourcing events per week

Interface Between Client and Company − 29

Supply Chain Risk Management Why Credit Rating Alone is no Longer Sufficient Today!

Author: Heiko Schwarz I riskmethods

Value Analysis I Supply Chain I Quality Assurance Transparency I Risk Management Few topics have gained as much importance over the last few years as “Supply Chain Risk Management”. But why is it that companies often still focus purely on the credit rating of their core

suppliers – especially in view of events experienced in the past few years, such as the tsunami in Japan, the Arab Spring in North Africa, or increased regulatory interventions such as the Frank-Dodd Act? Creating transparency along the entire supply chain, monitoring risks in terms of suppliers and sub-suppliers, recognizing locationrelated risks, taking critical logistics hubs or country risks into account: No chance!

Triggers of Global Supply Chain Disruption Natural disasters

59 %

Conflicts and political unrest

46 %

Sudden demand shocks

44 %

Export/import restrictions

33 %

Terrorism

32 %

Extreme weather

30 %

Extreme volatility in commodity prices

30 %

Information and communications disruptions

30 %

Curreny fluctuations

26 %

Border delays

26 % 0

Source: World Economic Forum Supply Chain and Transport Risk Survey 2011

30 − Supply Chain Risk Management

10

20

30

40

50

Inside Partner

About riskmethods: riskmethods provides companies with a comprehensive supply chain risk management solution for proactive monitoring and assessment of risks in the supply chain. Potential risks are detected at an early stage, which means that proactive steps can be taken to ensure that the ability to supply is not compromised, that compliance is maintained and that the corporate image is not jeopardized. The SaaS solution “Supply Risk Network”, which was developed in Germany, combines state-of-the-art technology and innovative provision of risk intelligence into a leading standard for supply chain risk management. www.riskmethods.net/en I @riskmethods1

Significant Consequences And yet, examples from the past are significant. For example, BMW was forced to halt production due to missing components as a result of the ash cloud from Iceland. The temporary stop in production meant that the manufacturing process of around 7000 vehicles was delayed. LSI, a leading manufacturer of hard drives experienced a 10% decline in business because of the floods in Thailand. Even further back, in 2002, dockers represented by the International Longshore and Warehouse Union went on strike, causing all 29 ports along the US West Coast to shut down for days, which is estimated to have cost the US economy between one and two billion USD per day.

But there are more current examples too: A case at General Motors recently went around the world – triggered by a recall campaign for 6.3 million vehicles due to faulty ignition locks and power steering systems. Result: officially 13 fatalities.

And overall, the number of recall campaigns in the automotive sector is growing; not surprisingly, based on the high external share of added value, and the complex relationships between modules and components. The industrial logic behind this development is irrefutable. The consequences of a halt in supply or lacking quality standards are, however, dramatic. Besides the costs of these recall campaigns, the image damage caused in addition is extremely difficult to quantify, if at all. The realization of the need to coordinate and control supplier networks proactively unfortunately often only comes after the damage has been done.

clear: The days when it was possible to check only financial key figures and credit ratings in terms of procurement are gone.

Integrated Approach and IT Support Today, it is important to monitor a vast range of risks across the entire (mostly global) supply chain.

The following should be taken into account: Consideration of all supply chain tiers Monitoring of suppliers, countries, locations and hubs Inclusion of entire universe of risks (e.g. political risks, legal and compliance issues, sanctions, quality, natural disasters, etc. – cf. also Diagram 1) This sounds like an ambitious undertaking, especially since buying agents and supply chain managers already have their hands full in their daily business with tenders and cost reduc-

Triggers for Supply Chain Disruptions These few examples alone show the drastic effects – and the diversity – of potential risks in global supply chains. As part of the “World Economic Forum Supply Chain & Transport Risk” study, companies were asked about triggers for supply chain disruptions; the diagram with the ten greatest risks makes one thing very

Supply Chain Risk Management − 31

tion projects. The good news, though, is that today you can get tools from Big Data companies that can perform the entire evaluation and analysis of risk data.

The following criteria are relevant for selection: Inclusion of 1st to nth tier supplier data Pre-integration of internal and external data sources

ons and for determining supplier strategy. Conversely, data from the supplier management processes can be integrated into risk management to complement the results from supplier evaluation with quality risk information, for example. Factors such as contract durations, shareholdings, procurement volumes or supplier dependencies are criteria that help a company assess the impact in case of a risk event on an ad-hoc basis, and enable it to react quickly and appropriately. In addition, this information also helps define and implement precise preventive actions.

Continuous updating of data Analysis options for purposes of prevention Early warning system in case of a risk event User friendliness and intuitive use

Early Warning System and Latent Risks A risk management tool can be used in two ways: On the one hand, as an early warning system that always issues warnings about threats of any nature in good time, thereby allowing appropriate action plans to be implemented. On the other hand, it can be used for “latent risks”, such as location risks (political or economic circumstances, or exposure to natural hazards), ideally allowing for evaluation, analysis and comparison of suppliers or locations during the business establishment phase, for instance – while at the same time defining preventive actions for existing suppliers in case of a risk event. This interaction of near real-time alerts for reducing the impact of a risk event and analyses for risk prevention is the basis for professional risk management.

Strategic Task Early recognition of risks and pro-active steps for preventing risk events enable either quick and appropriate reaction should a risk event occur or avoidance of risks impacting the supply at all.

Only in this way can companies ensure that they are protected against damage by suppliers and supply chain disruptions on a longterm basis. This certainly presents a challenge for buying agents and supply chain managers – but it also provides an opportunity to represent a key role in the company and to position oneself as an important strategic partner in terms of overall corporate success. Ultimately, procurement plays a contributing part in ensuring supply and thus sales, as well as in preserving a positive corporate image.

Interaction with Supplier Management and Sourcing Risk information is consequently helpful in the “phase-in” stage as well as throughout the supplier relationship, making it a relevant criterion for supplier management and sourcing. The data can specifically be used for supplier ranking or evaluation, for evaluations in connection with classification, for award decisi-

32 − Supply Chain Risk Management

Heiko Schwarz CEO riskmethods

Inside Experts

»Thinking

Outside

the Box«

POOL4TOOL Inside met with Christian Titze, Gartner’s top SCM analyst in Europe for an exclusive interview.

Editorial focused small business to a more mature value creation network.

Successful companies set themselves apart with demand-driven supply chain and close collaboration with different business partners, which corresponds to stage 4. As far as business practices and the supply chain are concerned, this means that they recognize the needs within their respective markets, and integrate them into their own processes. This means that they can respond to new demands or unexpected circumstances early on, and with more flexibility than other companies. D

Gartner releases the "Supply Chain Top 25" every year. Once again, companies such as Unilver, BMW, BASF, H&M, and Nestlé are at the top of the European rankings. What makes these companies different from the rest?

They think outside the box. Or, to put it differently they have managed to change their perspective from a narrow “inside-out” view to a strategy-oriented “outside-in” one. We identify five stages that a company must go through in order to move from a

The Journey Through Five Stages of Demand-Driven Maturity Stage 5 Stage 4 Outside-in

Network Value

Customer Value Demand

Demand

Supply

Enterprise Outcomes

Supply

Supply Product

Product

Stage 3 Internal Result Mindset

Demand Product

Inside-Out

Supply Integrated Supply Chain

C

D

B

A

Stage 2 BU

BU

BU

Function

Function

Function

Function

Function

Function

Function

Function

Function

Stage 1 BU

BU BU

Cost

Source: Gartner (March 2013)

Target

Supply Chain's Journey Through the Five Stages of DDVN Maturity| Matthew Davis, Noha Tohamy | March 26, 2013

1

Service

»Thinking Outside the Box« − 33

» Innovation, speed and strong market orientation separate the wheat from the chaff in all industries. « Christian Titze Research Director I Gartner

The Top 25 come from different sectors. Are integrated and demand-driven supply chain strategies equally important for all industries?

Essentially, yes. Of course the retail industry has different processes than the heavy manufacturing industry, but innovation, speed, and a strong market orientation separate the wheat from the chaff in all industries. However, there is no way to achieve these goals without an integrated demand-driven supply chain strategy.

How can companies learn from the successful SCM concepts of other industries? Are they transferrable or should companies focus on the leaders within their own industry?

We always explicitly advise all of our clients to study and learn from supply chain concepts from outside their industries.

Especially industries with short product life cycles or complex processing requirements often set technological benchmarks, such as the FMCG - fast moving consumer goods - industry, the retail industry, or the electronics industry. They must integrate the momentum and the cost pressure of their markets into their processes in order to be successful. The automotive industry has been the forerunner in the industrial sector for years when it comes to process innovation along the supply chain. Just recently, I gained insight into how SCM was run at a European OEM. In addition to classic supplier data, such as price, quality and financial status, they also collect any other available information about their core vendors using highly innovative technology to gather and consolidate this mass of unstructured data with their master data. This gives them a new perspective and a broader knowledge base that they can use to make decisions.

34 − »Thinking Outside the Box«

Does technology dictate success or failure in a supply chain?

If it used correctly, and at the right time, then definitely yes.

Gartner’s Hype Cycles provide an overview of the level of innovation and the sophistication of the key technologies used in a variety of areas, including Supply Chain Management. To continue with the OEMs example used above, these companies collect and analyze targeted social demographic and geographic data about their vendors. Is the vendor located in an area with a high level of competition, high prices, or increasing unemployment? Or in an earthquake zone? These are all factors that could influence the location decision. The foundation for a successful transformation from a technological point of view can be outlined by the following seven pillars: Strategy, Governance, Architecture, Operations, Data, Business Applications in general, and specialized SCM Software Functions. In practice, what is most relevant is how these technologies are integrated into the supply chain, meaning, how this mass data is incorporated into tactical processes, and how it is used. Even the most innovative technology cannot offer many advantages if the interface with tactical processes cannot be overcome, or if necessary requirements such as a unified ERP system and database are not available.

In a broad study that you conducted you reached the conclusion that nearly 80 % of companies in Europe still rely on on-premise applications for their SCM solutions, and that Cloud and SaaS (Software as a Service) applications are just now appearing on the radar. What are the reasons for this, and do you see differences here compared to other markets?

In Europe, the historical dominance of the ERP system is still high, and these products are traditionally installed as permanent fixtures in the client’s systems. This raises certain concerns regar-

Inside Experts

ding financing and depreciation. An important factor to consider is the learned skepticism about data security in the cloud. This is demonstrated by the fact that cloud solutions are already more widely used in less critical areas, such as CRM, Trade Management, or warehouse management systems. Financial data on the other hand, is kept primarily “in-house.” In other markets, particularly in North America, cloud solutions are currently on the rise, and experience has disproved many of the concerns. The question of how the strategic direction of companies in this area will change over the next several years was also part of the study. What sort of developments can we expect? After countless discussions with our clients and other supply chain experts, we now know that the trend is moving towards collaborate cloud solutions. To call it a breakthrough would be premature, however. Many companies are following these developments closely, including those in other markets, and are testing applications for various processes, particularly for those outside of the core ERP areas: HR, Sales, Finance, and Manufacturing. This also affects supply chain management and classic sourcing.

What would your advice be for companies searching the market for an SCM solution?

focusing on both the vendor’s and the supplier’s points of view. This was followed by global sales and operation planning, implementing “cost to serve” - orientation supply chains, directing processes more according to market demand, or improved collaboration along with supply chain for new product launches.

Inefficient supply chains often struggle with heterogeneous processes, inconsistent master data and non-uniform IT landscapes in different regions. Portal technologies help to overcome these hurdles and improve cooperation with the vendors. Are they a cure-all?

Portal solutions are an option, but whether they are the option is something that each company must decide for themselves. What can be said is that, in general, supply chains that are under the direct control of the CFO or CIO are under more pressure to push for portal or suite solutions rather than isolated solutions. The key to improving homogeneity within the supply chain is, however, centralized master data management. This is becoming increasingly important in order to support existing system landscapes for internal and external players along the supply chain efficiently.

First and foremost, companies should examine their own needs and target processes carefully before making any major changes. From a technological standpoint, we recommend analyzing possible solutions focusing on the “nexus of forces”: social, mobile, cloud and information. This refers to four independent trends that strengthen each other when their powers are combined. Each of these four technological trends is innovative in its own way, but together they can break apart old business models and reveal new opportunities.

We see this as the foundation of the technology platform of the future.

In surveys conducted at the height of the economic crisis, supply chain professionals indicated increasing efficiency and productivity, as well as cost reduction as the primary goals for their supply chains. Have these priorities changed?

We have noticed that companies have become more relaxed about this in recent years. Cutting costs is still on everyone’s agenda as before, but the focus is turning once again towards so-called “value generation” topics. In our surveys, the number one issue was the improvement of supply chain visibility. This refers to increasing transparency along the supply chain - ideally across several tiers -

SaaS-Based Delivery Models for Supply Chain Software: The European View | C. Titze | July 25, 2012

2

About Christian Titze With more than 22 years of experience in IT, Supply Chain Management, and Enterprise Resource Planning (ERP), Christian Titze is the Research Director at Gartner, and one of the leading analysts within the SCM environment in Europe. His research and consulting specializations focus particularly on software architecture, technology enablement, and other ERP/SAP-related topics, as well as the industrial sector. The IT expert’s services range from cost optimization and efficiency improvement within the SCM and ERP environments, to coaching activities for restructuring projects for global companies. Previously, he worked in IT, production, technology, and consulting for international companies in Europe and the USA, including Henkel CEE, KPMG Peat Marwick, Plaut, IBM, and Teleflex. www.gartner.com

»Thinking Outside the Box« − 35

SRM Market Changes: "All-in-One" Solutions on the Rise Market Experts Confirm the Trend of Replacing Outdated Supplier Portals Editorial

All-in-One Supply Collaboration Platform I Market Trends I Innovation Trigger I ROI

The topic of process optimization has been the primary focus in purchasing departments for over a decade. However, demands and complexities have changed a great deal. Fewer and fewer companies today rely on simple calls for bids, but rather prefer to begin rethinking their processes with the production process, starting with creating the development or purchasing bill of materials. This also poses new challenges for software providers that must be set up as “All-in-One Supply Collaboration” platforms for their clients, both today and in the future.

The SRM and Sourcing market is changing. Uwe Krawinkel, head of the specialized IT tool company POOL4TOOL, summarizes the growing market trends: "Companies have been focusing on the issue of sourcing optimization for years, and many of them have reached a plateau. They have reached the conclusion that the large majority of pieced-together IT solutions can no longer meet the needs of companies’ increasing complexities. Many must now consider how to deal with the large number of Best-of-Breed

» All-in-one supply collaboration platforms offer

the potential for significant ROI because, as conceived, they will support agility for buyers and sellers without sacrificing the ability to support differentiation and innovation.

Gartner, Inc.

36 − SRM Market Changes: "All-in-One" Solutions on the Rise

solutions in purchasing and those departments that have begun to work more closely with the purchasing department, such as logistics, QM, and product development. These solutions do not reduce media disruptions in communication with suppliers, but rather cause it in the first place.”

Best-of-Breed Solutions Reach Their Limit The market requires more holistic solutions and the need for an "All-in-One Supply Collaboration” platform is becoming increasingly apparent. The driving force behind this is large purchasing organizations that want to replace or consolidate their outdated solutions. Today, dozens of the largest international purchasing organizations are now working with their own IT solutions that they programmed themselves years ago, especially for the procurement of direct material. These are mostly based on technologies such as Adobe Coldfusion or MS Excel, and either cover a small part of purchasing, or serve as a general platform where suppliers can access a larger number of internal applications. It is often the case that employees leave the company and take their knowledge of the database with them, so that the costs and work required to expand or modify these databases are dauntingly high. Furthermore, external “Best-of-Breed” solutions from outside providers were often used over the years for Spend Management or eProcurement tools and slowly piled up within the company. Things really become complex if processes for departments that work closely with Purchasing, such as Product Development, Logistics, or Quality Management, also need to be included. In this case, suppliers and vendors must work with many different solutions and do not understand why they sometimes have to enter their data multiple times. Many of these large purchasing departments find these platforms to be incapable of handling the increasing demand for functions that a supply base portal must be

Inside Experts

» In essence, the

all-in-one supply collaboration platform is the next-generation supplier portal.”

Gartner, Inc.

able to perform. These organizations have begun to ask themselves: “Why should I have more solutions in order to work together with my suppliers?” and are searching for ways to consolidate their interactions with their vendors.

Innovation Trigger Leading IT analysts also emphasize the increasing significance of holistic solutions in their current market research. Gartner has called the concept of the “All-in-One Collaboration Platform” an “innovation trigger” in the current Hype Cycle(1), thereby confirming the continuing trend towards the replacement of outdated supplier portals and/or the consolidation of isolated solutions.

This topic is particularly interesting for companies in the international manufacturing industry with revenues exceeding 5 billion dollars. The Hype Cycle method makes it easier to create a visual representation of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities.

The market is developing slowly because the scope of the processes is so wide, and the needs of the users are complex. Analysts still project that the impact of “All-in-One Supply Collaboration” platforms will be big, and recommend that purchasing departments with outdated solutions consider to replace their portals after assessing the options from an investment, technology and administrative perspective. One of the most important requirements they have named is the need for a clear strategy for supplier and materials master data because data quality, or lack thereof, can have a strong influence on the ROI.

a sophisticated software solution and many years of experience implementing complex processes. “Over the last several months, we have been increasingly receiving inquiries from companies that want to replace their previous IT solutions in their purchasing departments. They approach us because the POOL4TOOL portfolio is the only ‘All-in-One Supply Collaboration’ platform on the market, and with more than 40 modules, it covers all of the critical aspects for the lasting optimization of processes from production, purchasing and quality management in one solution. This allows us to help purchasing departments implement their roadmaps in the most cost-effective and sustainable way,” says Uwe Krawinkel.

As a pioneering solution for eSourcing, the POOL4TOOL portfolio was developed from the beginning as a holistic “All-in-One Supply Collaboration” platform: “Today, more and more companies are excited about this holistic option. This makes us happy because it shows that our strategy has proven correct, and has been received positively by the market. While “Source to Pay” or “Source to Contract” might have been the talked-about topics before, processes from development to procurement that are relevant for almost every manufacturing company are moving to the foreground.” There are also other reasons aside from the lack of holistic solutions that are pushing companies to search for a new IT provider, including high licensing and servicing costs for the existing system, the lack of a standardized user interface, or a forced switch to new technology after the merging of two solutions.

15+ Years of Experience POOL4TOOL offers those companies that are seeking a modern, comprehensive IT solution for their entire purchasing department

(1) Gartner, Inc. "Hype Cycle for Procurement and Sourcing Solutions, 2014" by Magnus Bergfors, Deborah R Wilson. July 29, 2014

SRM Market Changes: "All-in-One" Solutions on the Rise − 37

Prepares for

Growth

New team, new tasks, new projects at POOL4TOOL America, LLC Editorial

Organization Change I Direct Procurement I Global Team I Manufacturing Experts I Expansion

The procurement function in US companies is not the same as it was five years ago. Increasing purchasing process automatization has been proven to be an effective measure for cutting costs. Now, the only thing hindering the potential of purchasing departments globally is the availability of the appropriate IT solutions. Nearly all global players have taken purchasing’s major optimization potential into consideration, and the solution specialists at POOL4TOOL are ready to support their future customers. After a very dynamic growth in Europe, POOL4TOOL decided to take the already existing operations in the US to the next level. Following a unanimous vote, the Executive Board elected manufacturing software expert, Wolfgang Winstel to serve as CEO of POOL4TOOL America, LLC and help restructure the company to best meet the demands of the American market. Winstel (53) took over as CEO, and the former Manager of US Operations, Martin Nehls, will

38 − Prepares for Growth

continue serving POOL4TOOL as a member of the corporation’s Executive Board.

Manufacturing Software Experts take Charge Wolfgang Winstel is no beginner in the industry and boasts an impressive international resume relating to both the manufacturing and IT industries. POOL4TOOL chose Winstel based on his extensive background in marketing enterprise software suites to the US manufacturing markets.

“I am most excited to be working with POOL4TOOL as we, other than most of our competitors, are a one-stop-shop for procurement automation for the direct and indirect spend. We offer a whole lot of outstanding functions especially for the manufacturing industry and expect to win many new customers for POOL4TOOL from that area,” remarks Winstel.

Inside International Wolfgang Winstel CEO POOL4TOOL America LLC

Acting on the needs of the market, Winstel will strategically reorganize the goals of POOL4TOOL America. To assist him, Winstel has hired experts in all departments - all with extensive IT backgrounds. The three most significant department changes will come to the Sales, Marketing and Project Management divisions of POOL4TOOL America. Gregg Smith, Director of Sales, is a seasoned professional in the IT industry and has held various Head of Sales positions throughout his career. Smith is responsible for the development and growth of current and potential clients within the North American region. On the marketing side, Thomas Zlotek, Director of Marketing, will oversee POOL4TOOL America’s marketing operations and has an extensive IT marketing background. Zlotek is responsible for the positioning, branding, awareness and go to market strategies, as well as analyst relations for the North America region. John Becker, Solution Specialists Manager has the task to further expand the team of local specialists. POOL4TOOL America, with their expanded Customer Service and Support team, is now able to fully support their North American customers locally.

Quickly after joining POOL4TOOL, Winstel realized the potential of POOL4TOOL’s holistic approach of providing an All-in-One Supply Collaboration Platform. Whilst the competition mainly focuses on indirect procurement processes, POOL4TOOL offers also very sophisticated capabilities for the purchasing of materials that will be part of their end products. The needs here are very different from non-production materials and POOL4TOOL has repeatedly been recommended to manufacturing clients by Gartner.

Procurement Trends - Optimizing Direct Procurement In America, buying organizations are getting ready to take advantage of procurement and sourcing solution functionality.

Gartner addresses this topic in their recent, Predicts 2014: Global Procurement Technology Advances Will Drive Billions in Savings* commenting how, “these advancements will deliver dramatic improvements in cost reduction and performance.” In particular, US based purchasing departments are seeing dramatic changes in their department’s productivity, effectiveness and impact over the last 15 years. The leading cause of this change is the ongoing developments in the capability and effectiveness of sourcing technology. “New solutions, new capabilities and new use cases for current solutions will effectively double the amount of spend

under management, which will, in turn, allow procurement and sourcing to make substantial and lasting contributions to organizational performance,” notes the Gartner study mentioned above.

As a result, many organizations are taking steps to enhance their procurement technology portfolio with automated solutions that allow for a more simplistic and cost effective approach, allowing them to forecast and negotiate with vendors and suppliers. A proper solution needs to be specifically designed to meet the newly defined criteria and objectives that companies are looking for. High automation and focus on flexibility, efficiency, as well as on cost effectiveness is crucial.

Direct Procurement Thresholds and Solutions Direct materials have a major impact into the fate of the enterprise. They are part of every product that gets produced and it is essential that the purchasing, as well as the delivery of the product work flawlessly together, as there is no room for error in just-in-time production. POOL4TOOL is in an outstanding position as it is one of the few procurement solutions that is combining strategic and operational purchasing for direct and indirect materials, resulting in an overall simpler process.

Just as important is the close and seamless cooperation with the supply base. As one of the leading SRM providers on the market, POOL4TOOL maps supplier management completely, from the first contact with the suppliers, to their out phasing at insufficient performance. Part of the POOL4TOOL solution portfolio is a Supplier Portal that allows the flexibility to on-board suppliers and later on in the process, allows the user to request additional information such as certification and qualifications on a regular basis. “I feel that many POOL4TOOL features, such as having the ability to onboard suppliers for a limited amount of time, without requiring manual data entry on the supplier side, are lacking on the US market. These features should strive here as many manufacturers are dealing with hundreds of globally dispersed suppliers on a daily basis, often with the supplier mentality working against the eSolution. All POOL4TOOL features were engineered with useracceptance in mind and this should be a huge advantage for large organizations,” ends Winstel.

* Gartner Predicts 2014: Global Procurement Technology Advances Will Drive Billions in Savings, by Deborah R Wilson, Nigel Montgomery, Richard Adams, Magnus Bergfors, November 25, 2013

Prepares for Growth − 39

Partners of

Purchasing

Editorial

Consulting I Category Management I Cost Breakdown Analysis I Program Management

The strategic consulting competency of the POOL4TOOL group is carried out fully by their subsidiary, Alengis Consulting. Since the company’s founding in 2010, the focus, in particular, has been on working with purchasing organizations from manufacturing industries. Among the clients are both German medium-sized companies and global big-name enterprises. Companies with complex group structures in particular find Alengis to be the right partner for them to restructure their purchasing organizations.

The year 2014 was dedicated to internal reorganization and strategic realignment: Thomas Dieringer, CEO of POOL4TOOL, parent company to Alengis took over the general management from John Benad in the year’s fourth quarter. Moreover, the team has ex-

panded and therefore, also increased their competencies. Thus, the very core task of POOL4TOOL’s consulting branch within the full-service portfolio of the POOL4TOOL group has been significantly enhanced. The new goal is to consult purchasing departments on the future challenges of the international sourcing environment by introducing innovative methods and concepts.

Growth will also be one of Alengis’ top priorities in 2015. The company will further increase its team and their competencies and moreover, will pursue new and strong partnerships with dedicated experts. Through continuous market feedback and the respective vast number of consulting projects, Alengis will focus on those topics that will have the biggest impact on the performance of the purchasing function.

Cutting Edge In the future, Alengis will increase the focus on the current needs of modern purchasing departments, offering their expertise, in

Program Management Risk Management Customer Business

Vision Strategy

Project Management

Assessments Organization Process Technology

Supplier Lifecycle & Commodity Strategy

Sourcing Process

Roll-Out Concept

Collaborative Supplier Development

Trainings (Academy)

Supplier Performance Supplier Enablement

SRM

Self Service

eSourcing eProcurement PLC

Analytics

Collaboration Supplier Integration

Current state

40 − Partners of Purchasing

Strategy Consulting

Best Practices Experience

Ratings & Audits Customer’s Best Practices Implementation

Event Management

Operations

Technology

Roadmap

Change Management

Inside Consulting

particular, in the fields of program management in sourcing/procurement, category management, and the definition and implementation of product costing and cost structure analysis.

Alengis’ approach to consulting is holistic and always comprises three core aspects: organization, process, and technology. They assess the topics at hand and the needs of the purchasing department together with key decision makers. Using their combined practical experience gained over many years, Alengis consultants are able to provide best practice advice for purchasing, supplier, and category strategies.

Goal-oriented consulting services play a critical role in global programs and projects. This is why Alengis consultants support their clients throughout the entire transition process. This includes: the preliminary design and strategy of the rollout, customized solutions, process analyses, and end-user training in international locations. The consultants work together with the client’s CPO to create a professional procurement roadmap. They suggest process changes, gather the necessary political support from subsidiaries and local purchasing organizations to support a global project, or they help the CPO to present individual projects to general management. When implementing uniform standards company-wide or for a high level of commitment outside of the company’s headquarters, the concepts take local standards into account. Alengis consultants are professionals in project management and project reporting and accompany their clients until the project goal has successfully been implemented.

Highest Cost Transparency A particular focus of Alengis is set on analyzing cost structures by using cost breakdowns. They are the key to greater transparency of a commodity, which is especially important for comparing offers and making decisions. Because of the greater complexity, cost breakdown analysis was previously often limited to direct material groups. Alengis consultants use their expertise to define and implement professional cost breakdowns together with their clients and for indirect materials and services, i.e. for facility management, cleaning services, IT and even energy.

Sourcing professionals, with long-term expertise in preparing cost breakdowns and who want to advance their approach, work together with Alengis to integrate more advanced approaches into their cost analysis, such as, linear performance pricing and should cost models.

Seasoned Professionals Add Value All Alengis consultants are seasoned experts in their fields with many years of industry experience:

Klaus Lagemann ▪ Management Consultant Klaus Lagemann boasts over 20 years of management experience within the manufacturing environment. His career has taken him from complex purchasing projects in plant engineering to building up a global purchasing organization for several production plants in Europe and China.

Bertrand Maltaverne ▪ Senior Business Consultant After 15 years as a buyer and global application tools and process manager in a Fortune 500 company, Bertrand Maltaverne is now providing his expertise to Alengis clients for implementing global lead buyer structures and SRM, eSourcing, and eAuction strategies.

Ingo Meyer ▪ Senior Business Consultant Ingo Meyer is a proven specialist for IT process consulting in the field of strategic sourcing. For more than 8 years, he has been working as a consultant for program management, tool assessment and global rollouts for numerous companies, in particular for those in the chemical industry.

Regina Wünsche ▪ Senior Business Consultant Regina Wünsche has 35 years of experience working in IT, project managementwww.pool4tool.com and business consulting. Her past experience includes working for companies such as: Kärcher, Körber and Airbus.

At Alengis, she focuses on topics focused around SRM and software training.

Partners of Purchasing − 41

Inside Opinion

The Chance to

Source Globally Author: Ulrich Weigel, Head of Procurement, Leica Camera AG It is out of question that global sourcing will remain a key factor within the purchasing function. The question is rather how and where to buy – as there are still new opportunities out there.

From personal experience I can say that TCO-based savings still exist today, for example in the tooling sector they can be up to 60 %, and this is even without considering the very short delivery times (for European standards). Here it is worth it to source a tool for serial production or even for the prototype globally. Also to build up a second source is easier. Direct savings for components with high quality standards are not uncommon. Currency advantages and opportunities from both local value added and rare or listed raw materials could also generate enormous competitive advantages. Another motive may be technologies which cannot yet or can no longer be procured locally (also a result of global sourcing).

What remains, are the challenges a global buyer has to face. It starts with a globally coordinated strategy, followed by a supply market research. Online search engines alone, however, are not helpful as it requires considerably more effort to systematically search for the right global source. Very often the result is a supplier with great potential – but who is still very far away from becoming a qualified partner. They need to be “shaped” and developed according to the buying company’s needs. This requires a sourcing professional who is a highly motivated, proactive multi-talent, who brings in expertise, an international mindset, resistance to corruption and above all, the right social cultural skills. It is important, however, to not underestimate the risks within your own company. The greatest resistance to global sourcing projects is very often lurking there. A buyer needs to become a sales guy to successfully promote the project in his own company.

Another big challenge is it to strategically and operationally align the whole purchasing organization to global requirements.

“Remote control” will never work.

I am predicting the following trends: Environmental disasters will continue to increase. Suppliers must be involved much earlier in the product development process, just as global potential partners

42 − Opinion

need to be. In the next three to five years, global sourcing volumes will double and thus on average account for up to a quarter of the purchasing portfolio. In the same time frame, China will remain a lucrative source of supply in the low cost segment, however, the country is under transition. It is no longer the low cost production site of the world but it is increasingly positioning itself as a big player in the fields of alternative energies, safety, environmental technologies, and heavy aircraft construction. Within the next three to five years, experts expect increasing social and political tensions in China which will also affect the country's importance as a reliable source of supply. India, Thailand, Bangladesh and Indonesia are all getting ready as the successful successors.

Global sourcing, however, is not automatically and only Asia – because almost at your own doorstep you will find a significantly low risk capacity and high-skilled workforce. The Iberian Peninsula is an example. This area also offers long unheard value for money.

Last but not least, there is another trend for sourcing and procurement professionals: Someone who can improve quality along the supply chain, minimize supplier risks, and measurably reduce costs can quickly climb up the career ladder these days.

It is not a coincidence that already in one third of all DAX companies a member the Board of Directors is responsible for purchasing.

Ulrich Weigel is Head of Procurement, Deputy COO and Buyer at Leica Camera AG. He is also the author of “Praxisguide Strategischer Einkauf.”

www.pool4tool.com

POOL4TOOL

All-in-One Supply Collaboration Platform Analytics

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MGM

Projektmanagement

Collaboration Project Management Document Management Product Lifecycle Costing | PLC https://www.google.at/url?sa=i& https://www.google.at/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&docid=QhuTLKquKAtSkM&tbnid=63eRKJWXgGluoM:&ved=0CAUQjRw&url=https%3A%2F%2Fwww.iconfinder.com%2Ficons%2F Initiative Management SRM-Portal

Dokumentenmanagement

Produktkostenkalkulation

Liefer- und Feinabruf

VMI

Business Directory

SCM-Portal

Bestellung/AB

High Secure

Stammdatenmanagement

Lieferantencockpit

Kanban

LLE

Lieferantendatenbank

Dienstleistungsbestellung

Finance

Sourcing-Portal

Registrierung

Qualifizierung

Lieferantencockpit

Projekt-Portal

Projektmanagement

Lieferavis

Rechnung/Gutschrift

eSourcing

SCM Portal

https://www.google.at/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&docid=QhuTLKquKAtSkM&tbnid=63eRKJWXgGluoM:&ved=0CAUQjRw&url=https%3A%2F%2Fwww.iconfinder.com%2Ficons%2F198448%2Fmeanicons_part_piece_plug Finance

Technology

Sonderfreigaben

Quality-Portal

Lieferantenbeurteilung

D&B Integration Supply Chain Risk Management Dokumentenmanagement

Vertragsverwaltung

CRM

APQP

DienstleistungsKanban bestellung

eProcurement BANF Sourcing-Portal

EMPB

APQP

Branchenkalkulation

Quality-Portal

Audit-Management

CRM

Bestellung/AB Projektmanagement

Lieferavis

LLE

Branchenkalkulation

Dienstleistungsbestellung

Sourcing-Portal

Quality-Portal

eSourcing

Audit-Management Reklamation/8D

CRM

Dokumentenmanagement

Lieferavis

eAuction

eProcurement

BANF

Branchenkalkulation

Sonderfreigaben

EMPB

Liefer- und Feinabruf APQP

Audit-Management

eSourcing

Quality Portal

Reklamation/8D

Produktkostenkalkulation

eAuction

Complaints / 8D-Report I QDX Initial Sample Inspection Report Exceptional Approval Goods Issue Documents Audit Management APQP

Sonderfreigaben

VMI

SCM-Portal

Quality-Portal

Kanban CRM

Bestellung/AB

Dienstleistungsbestellung

Lieferavis

Sourcing-Portal

eSourcing

Reklamation/8D

Purchase Order Management Service Orders Dispatch Notification Delivery Schedule and Call-Off ERP Contract Management Kanban Vendor Managed Inventory Long-term Supplier Declaration Document Approval Exchange Invoice/Credit Note POOL4TOOL EDI

Reklamation/8D

LLE

eProcurement

BANF

Branchenkalkulation

Quality-Portal

EMPB

APQP

Audit-Management

CRM

More information:

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