Definition and structure of the purchasing organization Global Procurement

Goal: Establishment of a global purchasing team in order to achieve the best possible purchasing conditions on a TCO basis and to reduce material costs by 20%

Project

Duration: 2 years from analysis to implementation. Nowadays an integral part of the organization.

Role in the project: Project Manager

Operational area, geographical:

Brazil
Global

Company

Type: Mechanical engineering
Turnover: 5 Bn. EUR
Number of employees: 25,000

Description

There was no material group structure, requirements were placed with suppliers without long-term planning.

Purchasing volume > USD820 million

>30 plants worldwide

Measures

At the time, the client was a globally active company with a worldwide production network.

Purchasing volume > USD 800 million, mostly in Brazil (both demand and suppliers)
The foreign plants have partly purchased from the mother in Brazil
Worldwide sources of supply were largely unknown or not used

Team

3 “Team Leaders Global Procurement” (Brazil, India, China) with corresponding teams
11 Development engineers at 6 locations
7 Employees in quality assurance at 6 locations
4 Logistics employees at 8 locations
11 Strategic buyers at 3 locations
4 Employees Supplier Development
14 Operational purchases at 12 locations
2 Project wizards

Reporting

Weekly team meeting: comparison of target and actual status
Monthly reporting to business unit managers
Half-yearly reporting to the management / board of directors

Interfaces

Board of Directors
Head of the Business Units
Purchasing of the various plants
IT
Engineering
Quality
Finance / Controlling / Legal Department

Success

Global Procurement became an accepted part of the organization. The cost reductions achieved are sustainable and ranged between 3.4% and 6.2% in subsequent years.