The interim manager was hired by a company in the automotive industry to restructure the purchasing organization. A complex challenge with a global purchasing volume of more than 500 million euros spread across 15 plants with 50 purchasers.
Initial situation: purchasing with a low level of maturity and an "underdog image"
Before the start of the interim mandate, the company's purchasing was purely decentralized across the plants in Germany and abroad with a focus on order processing. Strategic purchasing was essentially handled by the specialist departments. There was often no system in place. On the one hand, this led to monopoly suppliers and, on the other, to an unmanageable number of small and micro-suppliers. In addition, there were no targets for purchasing and therefore no measurement of the value contribution. There was a complete lack of supplier management for supplier evaluation and development. Complex processes and a lack of IT support resulted in high personnel requirements. All in all, procurement had a low level of maturity with a clear "underdog image".
Analysis of the procurement organization and maturity level in Germany
The interim manager began his mandate with an analysis of the current state of the procurement organization and its processes as well as the maturity level of procurement in Germany. Based on this, he developed a concept for realignment and centralization, which was approved by the Executive Board. The decision stipulated that the concept would gradually be rolled out to the other European, American and Asian locations following its introduction in Germany.
Concept for fundamental realignment with business intelligence
The interim manager's concept fundamentally realigned the company's purchasing. The most important changes included:
- Separation of strategic and operational purchasing
- Introduction of product group management
- Efficient and user-friendly ordering processes and systems
- Establishment of SAP BI-based purchasing controlling (KPI system) for analysis and control
- Continuous optimization of value contribution (S2C strategic purchasing, Savings)
- Optimized P2P process (operational purchasing)
Intensive communication resolves resistance - coaching and compliance monitoring
The interim manager gradually reduced resistance from the previously purchasing departments through intensive communication. This included joint product group strategy workshops, fortnightly jours fixes and intensive one-to-one meetings.
A new purchasing guideline and a compliance monitoring system made the process sovereignty of purchasing visible on the outside in the company organization. Within the purchasing department, the entire implementation phase was characterized by intensive training and coaching of department heads and strategic buyers in methods for product group strategy development, negotiation, moderation, presentation and conflict management. The interim manager deliberately encouraged fluctuation in purchasing in order to fill vacant positions with external, experienced strategic buyers and internal high potentials.
Savings in purchasing rise to clear double-digit millions
The new purchasing concept quickly proved successful. Savings grew continuously from an initial low single-digit million figure to a clear double-digit million figure. At the same time, the number of active suppliers was more than halved. The self-created structure with monopoly suppliers was broken up and competition was created. Productivity in operational purchasing (P2P) increased by more than 30 percent thanks to the gradual digitalization and automation of all process steps (SAP requisition obligation, 25 percent e-catalog quota, auto PO).
In addition, the interim manager established a uniform supplier evaluation system. As a result, the company now successfully complies with the IATF 16949 standard (compliant processes for direct material). At the end of the interim mandate, the company had a functioning and efficient purchasing department with a qualitatively and quantitatively completely reorganized purchasing team. The "underdog image" of purchasing is history.
