“We quickly gained a lot of positive experiences with the digitization of indirect procurement,” reports Mr. Gutekunst, Head of Purchasing at Memminger-Iro. “But the different purchasing systems still complicated the process. We were therefore looking for a central platform that could be used to process the purchase of C-parts and indirect procurement. ”
The challenge
Complicated purchasing processes, too many systems, lack of centralization.
The solution
A central platform for purchasing C-parts and indirect procurement.
As a renowned address, Memminger-IRO supplies high-tech components to textile manufacturers in over 100 countries. The company ordered warehousing until 2010.
By optimizing the entire ordering and delivery process, we can now order as needed without fear of supply bottlenecks.
Uwe Gutekust
Head of Purchasing, Memminger-IRO GmbH
In practice, this meant that before each order, a new search was set up for the currently cheapest offers — an enormous effort for the purchasing department. The first steps towards digitizing procurement were then taken. These consisted of bundling the purchase volume for office supplies from a single supplier with its own digital procurement platform. As a result of the benefits and positive experiences, the procurement of packaging materials such as cardboard boxes and adhesive tapes was also quickly digitized. And with a second supplier who also has its own procurement platform.
“We quickly gained a lot of positive experiences with the digitization of indirect procurement,” reports Mr. Gutekunst, Head of Purchasing at Memminger-Iro. “But the different purchasing systems still complicated the process. We were therefore looking for a central platform that could handle the purchase of C-parts and indirect procurement.” From the following competitive comparison, the simple system procurement platform emerged as the winner, as this was where the greatest overlap of demand with the product ranges offered was found.
The introduction of the platform was fully implemented in less than half a year. Since the start of cooperation with simple system, the share of centrally procured products has been continuously increased to 65 percent. The remaining share is currently covered by local business partners from the region.
The special thing about working with the new e-procurement platform. The required products are ordered independently by the department employees as required. A total of 80 personal and impersonal, shared accounts have been created on the platform for the approximately 230 employees at the company headquarters in the Black Forest. Up to a certain budget limit, orders are approved by a supervisor from the purchasing department. For higher amounts, the management must grant approval. Instead of the lengthy Internet research that had prevailed up to now, employees were now able to quickly select the required products themselves using electronic catalogs from various suppliers. In this way, the pure processing time in purchasing per order was more than halved from five to two minutes. With around 100 orders per month, this is a relevant variable.
For Memminger-Iro's purchasing department, this relief means in particular that the saved resources can be invested in the procurement of A and B products. In view of the sales volume, significantly greater contributions can be made here to improving the margin and thus to the sustainable success of the company. Another step forward is the reduction of inventories, which means that less capital is tied up. “We used to have a space of over 25 square meters for toner cartridges and other materials alone,” recalls Mr. Gutekunst. “By optimizing the entire ordering and delivery process, we can now order as needed without fear of supply bottlenecks. ”
The processing time in purchasing was more than halved from five to two minutes per order.
Uwe Gutekust
Head of Purchasing, Memminger-IRO GmbH
Last but not least, the introduction of simple system also marks the start of the further digitization of business processes. “Connecting e-procurement to the proALPHA ERP solution was one of our first interface projects in this area,” explains Mr. Gutekunst.
In the end, a look at the Memminger-Iro management's return on investment (RoI) shows that they have done everything right. By entering e-procurement on the simple system platform, the purchasing department can once again fully dedicate itself to its core strategic tasks. “Even the development costs of the ERP interface are negligible in view of the comprehensive advantages,” Mr. Gutekunst concludes with satisfaction.
