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Purchasing 4.0. in Plant Engineering: Global Supplier Management at Humboldt Wedag GmbH

| Success Story

Digitalisation and Process Optimisation in the Supply Chain: Annual Savings of over € 400 tsd.

  

With over 160 years of experience in the cement industry, Humbold Wedag GmbH (KHD) is a global leader in cement plant technology, equipment, and services.

At the end of 2019, KHD's strategic procurement department launched the "Procurement 4.0." project, which covers the areas of organisation and processes, management and people, business models, as well as technology and systems. One of the foundations for this is the digitalisation of purchasing with a global supplier management system (SMS) based on the SC-Manager software solution from the German software manufacturer Simmeth System GmbH. The software is developed on a modular basis and could thus be tailored precisely to KHD's processes and requirements.

The central SMS now provides KHD's purchasing department with all information on suppliers clearly and in real time. This includes, for example, their master data, articles, prices, orders, invoices as well as documents and their due dates. The SC-Manager automatically collects this information from internal KHD sources such as SAP and document management as well as from external sources such as the suppliers themselves or even from the Internet.

This is done via the integrated supplier portal, which is used to communicate directly with the suppliers. There, the suppliers enter all the required information themselves now already during their qualification and upload required documents. The procurement specialists only have to check the information and documents. The supplier now also receives and processes price enquiries and orders directly in the supplier portal. In case of process deviations, e.g. expired documents or unconfirmed orders, the software warns the purchasing department and the suppliers via mail and traffic light signals.

The performance of the suppliers is continuously recorded and evaluated via an integrated supplier evaluation. The results are directly fed into an action management procedure, which is then processed by the procurement department and the suppliers concerned in the LMS and in the Portal. The overall assessment of suppliers is complemented by an integrated Risk Management module.

With SC-Manager, Procurement now not only has a comprehensive strategic Supplier Management, but operational processes are also digitalised, automated and thus significantly improved.

"Through the redesign of the ordering process alone, the costs per order transaction were reduced from € 238.16 in the first step to € 168.55. After the complete roll-out, these costs will drop to € 74.98, which means a cost saving of more than € 400,000, - per year," says Tom Thönnessen, Project Manager Strategic Procurement at KHD. And further: "Further savings are realised by a reliable control of the global supply chain in real time".

For this purpose, a new release strategy and the transmission of orders with all associated documents were completely digitalised via the SMS. Once the order has been triggered, the supplier receives an info mail and then processes it directly in the supplier portal. He can download all relevant documents himself, enter the confirmation date and upload the order confirmation. Purchasing is automatically informed of the supplier's confirmation and can immediately view the information in the SMS. The information and documents also flow automatically from the SMS back into SAP.

Thus, in the first year of live operation, not only noticeable process improvements were achieved, but also enormous, directly measurable savings were proven.

The roll-out of the SC-Manager continues at KHD. On the one hand, the number of connected suppliers is being increased, on the other hand, further countries such as China, America and India are being connected. In addition, the functional scope and the circle of integrated employees will be expanded step by step. "Through the implementation, we can easily realise the strategic procurement goals and measure the key figures in real time globally at all locations," says Alexander Kranz, Head of PE Execution.

 

KHD Humboldt Wedag GmbH
KHD Humboldt Wedag GmbH
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[Translate to EN:] Alexander Kranz, Head of PE Execution bei KHD Humboldt Wedag Tom Thönnessen, Projektleiter strategischer Einkauf bei KHD Humboldt Wedag