Wacker Chemie AG procures services via an end-to-end digital process. Since then, the tendering rate has increased massively and 200,000 service entries per year are automatically transferred to the Group’s own systems.
The share of technical services in technical purchasing at Wacker Chemie AG is no small number. We are not talking about “peanuts” here, but about 45,000 order items annually and a procurement volume in the order of 200 million euros. Process engineering services, electrical, measurement and control technology, assembly, construction services and general services such as cleaning and waste disposal are procured.
The old system was no longer up to date. Wacker had been using an SAP / R3-based tool for service processing since the end of the 1990s, and an electronic measurement recording system had been in place since 2002. But the process was cumbersome. Thomas Hübner, responsible for electronic processes in technical purchasing and logistics at Wacker, remembers: “All service providers needed special software, and the files were sent to Wacker by diskette, CD or e-mail. We had to manually import this data into a sub-system and the service entry was generated from this.” With 200,000 service entry sheets a year, this was a lot of work for the technical departments. The necessary switch to Windows 7, which the old application could no longer handle, was also a decisive factor in the search for a new solution.
The ordering processes of all affected departments were harmonized: Around 800 internal and external users are involved in the procurement of services.
More tenders, less effort.
“We wanted to take the pressure off the specialist departments and create a future-proof process,” says Thomas Hübner, describing the primary aim of the changeover. In addition, audit security was to be increased across the entire awarding and invoicing process. The project team achieved these goals. According to Hübner, the positive benefits for purchasing (end-to-end process from tendering to ordering to payment, automated approval, increased tendering rate) were “desired effects from the optimization project”. Likewise the considerable process cost savings in the six-figure range per year.
“Everyone involved uses the process, there are no bypasses.”
Thomas Hübner, E-Processes Technical Procurement & Logistics, Wacker Chemie AG
What makes the system so successful? “We have set up a web-based tendering process, integrated a catalog for performance feedback for smaller suppliers, implemented a data upload option for large companies and also integrated the processing of construction services, for which Wacker uses special software, into the system,” says Thomas Hübner, summarizing the innovations. To do this, however, Wacker first had to harmonize the ordering processes of all affected departments. Around 800 internal and external users are involved in the procurement of services, and they all had to be trained on the new solution. The project itself involved representatives from all relevant purchasing departments and users, Wacker’s internal IT department, selected suppliers and an external IT consultant, conarum.
Nobody orders past the system.
The result was a standardized digital process chain from the invitation to tender for the framework agreement (RFQ) to the submission of offers, the call-off and the order in accordance with the framework agreement, the recording of services by the suppliers, the inspection and approval by Wacker, the automated goods receipt and the triggering of the credit note procedure. Thomas Hübner can be satisfied because, he emphasizes, “the process is absolutely stable, everyone involved uses the procedure, there are no bypasses.
The new process went live with 400 suppliers in mid-2012, and today all service providers are integrated into the process. At the beginning of 2013, Wacker asked the suppliers about their satisfaction with the new solution. “This was important to us because the system should meet the needs of those involved and we wanted to eliminate any remaining deficits in the process,” explains Hübner.
Adapt to as many service providers as possible.
The result was comprehensive feedback (65% of suppliers took part in the survey), which showed, among other things, that the corporate world and the world of small and medium-sized craft businesses are very different (which makes such feedback all the more important). For example, suppliers wanted to access the web solution with other browser types (the system now also supports Safari and Firefox), and the well-intentioned online video training was also not well received. Those involved preferred a “simple” PDF document and the user-friendliness of the SAP solution was also judged by the users to be “in need of improvement”. “Nevertheless,” says Thomas Hübner, “the vast majority were very satisfied with the functionality”.
A tool for the entire Wacker purchasing world.
A further improved version of the process has been online since the end of 2013. And because the advantages are obvious, Wacker is considering using it in other purchasing segments. There are also plans to use it across the board for all types of tenders. The web tendering rate has already increased to around 18 percent as a result of the project and is set to rise steadily over the next few years. Today, Wacker is already 100 percent above the BME top figure for the chemical industry. This is a comparatively meagre 9.56 percent.
Annette Mühlberger, specialized journalist
(Source: BIP 4 2014, 5th year)
Documents for download
Press Release Wacker Chemie AG – Efficient electronic purchasing of services