As part of the optimization of its supply chain, a leading global electrical engineering group decided to optimize the overall productivity of the purchased material ("upstream flow optimization"). A new business model was agreed with an external service provider for this purpose. Overall responsibility for the "commodity" category "packaging material" was entrusted to a leading packaging material group. The external service provider was responsible for identifying and driving forward projects to increase productivity on a partnership basis, from design to procurement and use.
The electrical engineering group was to benefit from the fact that specialists would reduce the costs of this commodity year on year. At the same time, the external service provider was to ensure transparency, standardization and optimization of the "end-to-end" procurement processes throughout Europe. With its value-adding services, the packaging materials group secured market share and profits in a competitive market.
Project director for standardization of procurement processes & development of the outsourcer
The benefits of the partnership were obvious, but such cooperation was new territory for both companies. The packaging materials group therefore commissioned the interim manager to implement the new business model at the electrical engineering group. The interim manager took over:
- Overall planning of the project (business case, resources, tasks, monitoring)
- Coordination of the various phases (contract negotiation, preparation, implementation)
- Start of operations (O2C, P2P) in more than 80 plants of the electrical engineering group in 15 European countries
It was a highly sensitive initiative for both partners. At the electrical engineering group, more than 80 plant managers and their organizations needed to be convinced of the outsourcer's capabilities and convinced to standardize their procurement processes. At the packaging materials group, a highly professional unit had to be set up as quickly as possible and put in a position to operate a new, highly efficient order to cash/procure to pay process (O2C/P2P process) as an outsourcer.
Core element of the outsourcing contract: operational processes of the business model
The controller experience and O2C/P2P expertise helped the interim manager to design a realistic, credible and robust business model that both project teams could "sell" internally. This also enabled the project team to quickly obtain the financial and human resources needed to build the team and complete the implementation.
Developing a standardized implementation process for more than 500 participants
The interim manager involved the entire 50-person team of the packaging materials group in the design of an efficient implementation process. The implementation process, schedule, communication and documentation were particularly critical to success. This was because the implementation was a new project for each of the more than 80 factories and their more than 700 suppliers. Each time, the local stakeholders of the electrical engineering group had to be informed, convinced and mobilized, for example to check and correct master data and to win over the local suppliers for the new business model.
Teams prepared for new roles and responsibilities as coach and mentor
The coaching expertise of the interim manager was necessary to enable the team members to take on and adopt the new roles and responsibilities. As a mentor, he also helped to develop the team members' process and project management skills sufficiently despite the time pressure.
The interim manager documented the experiences from the project with the team in a series of "guide books". They serve as a basis for smoothly implementing the new business model in other cases as well or for training new employees of the packaging materials group.
Continuous improvement process initiated according to the CIP approach
CIP approach initiated. Following the deployment of the interim manager, this approach was pursued further in a process improvement initiative together with the electrical engineering group. Both groups have further expanded their collaboration. The electrical engineering group is planning to bring a second division into the business model.
