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Procurement Transformation at CLAAS
Procurement Transformation at CLAAS Supplier Performance Management Clare Partridge, Marc Zimmek SAPPHIRE 08 Berlin, 20.05.2008 This document is confidential and is intended solely for the use and information of the CLAAS Group. Content The Company CLAAS Motivation for the Project Supplier Evaluation Evaluation Concept Realisation and System Environment Supplier Evaluation as Key Success Factor of SRM 2 CLAAS – Key Figures Agricultural Machinery Forage Harvesting Equipment Production Engineering Legal Form: KGaA mbH Shareholder: Helmut Claas (Majority) Shareholders‘ Committee: Helmut Claas (Chairman) Industrial Engineering Net Sales 2007: 2,659 bn € EBIT: 175,8 m € Foreign Sales: Employees: 76,3 % 8.425 Services Shareholder Generations: Cathrina and Helmut Claas 3 The CLAAS Group – a Global Player from Ostwestfalen CLAAS Omaha LLC. Claas Selbstfahrende Erntemaschinen Claas Fertigungstechnik D- Beelen US- Omaha Nebraska Claas Krasnodar RUSKrasnodar D- Harsewinkel D F HU USA RUS Renault Agriculture F- Le Mans Usine Claas France F- Metz Claas Hungaria IND HUTörekzentmiklos Claas Saulgau Claas Industrietechnik Claas India D- Bad Saulgau D- Paderborn INDFaridabad 4 Content The Company CLAAS Motivation for the Project Supplier Evaluation Evaluation Concept Realisation and System Environment Supplier Evaluation as Key Success Factor of SRM 5 The „Master Purchasing Strategy“ Master Purchasing Strategy Systematic Supplier’s Management Standardization Increasing competitiveness by Optimisation of vertical range of manufacture Supplier’s Integration Global Sourcing Optimisation of the number of suppliers and concentration on the best suppliers Reduction of specifications and number of components Make or Buy / Outsourcing activities Implementing system suppliers with close cooperation in product development and manufacturing processes Internationalisation & localisation / achieving best world market prices The Master Purchasing Strategy ensures the CLAAS standards of Quality & Reliability. 6 Implementation of the „Master Purchasing Strategy“ through the proFITOrganisation Group-wide and cross-functional matrix organisation 7 Integrated Supplier Evaluation for Improvement of Suppliers‘ Performance Transparency as precondition for efficient supply chain management Customer Orientation Logistics-KPIs Purchasing-KPIs Suppliers Quality-KPIs R&D-KPIs ... 8 Targets of the Supplier Evaluation Increase of customer satisfaction Development of technology leadership Optimisation of costs, processes and products Increase of product and service quality Optimisation of the number of suppliers Development of suppliers 9 Content The Company CLAAS Motivation for the Project Supplier Evaluation Evaluation Concept Realisation and System Environment Supplier Evaluation as Key Success Factor of SRM 10 Project Organisation Steering Committee Supplier Evaluation SAP QM SCM Purchasing R&D IT Project Management SAP Purchasing IT Basis MM / QM SRM BI Portal IT IT IT IT IT QM QM QM SCM SCM SCM Purchasing Purchasing R&D R&D SAP SAP SAP SAP Purchasing 11 The five pillars of the integrated CLAAS Supplier Evaluation Supplier Evaluation Quality Logistics Costs Innovation Motivation Evaluation by all involved functions 12 Entry Values of Supplier Evaluation – Hard- and Softfacts Strategic Supplier Evaluation Performance Measurement: by system data, facts and figures Generation of KPIs, Key Performance Indicators ERP-Systems MM QM Operative Supplier Evaluation Survey Supplier Evaluation Hardfacts Softfacts Performance Evaluation: by mostly objective criteria Survey of Supplier Performance Manual Survey others 13 Focus of Supplier Evaluation – selected Suppliers Strategic Supplier Evaluation Performance Measurement: System based evaluation Operative Supplier Evaluation Survey Supplier Evaluation Hardfacts Softfacts Data for all suppliers Intensive focus just on selected suppliers Performance Evaluation: manual survey focus on strategic suppliers Suppliers of CLAAS Group for Production Material (PRM) Strategic Impact 14 Supplier Evaluation by Hardfacts Strategic Supplier Evaluation Quality: permanent measurement of supply quality by KPIs - Product Quality (ppm) - Disturbance Rate Product Operative Supplier Evaluation Survey Supplier Evaluation Hardfacts Softfacts Logistics: Permanent measurement of delivery accuracy and quality by KPIs - Time Accuracy - Quantity Accuracy - Disturbance Rate Logistics e.g. online-evaluation during goods receiving (via ACS*) * ACS = SAP Add-On Automotive Consulting Solution 15 Supplier Evaluation by Hardfacts - SAP Automotive Consulting Solution (ACS) Measurement & Tolerances will be standardized – Example Time: Quantity: Too early Too late Time Accuracy 0 days 0 days 100% up to 1 day up to 2 days 80% up to 2 days up to 3 days 60% up to 4 days up to 5 days 40% from 5 days from 6 days 0,01% Too less Too much Quantity Accuracy 0% 0% 100% up to 5 % up to 5 % 80% up to 10% up to 10% 60% up to 15% up to 15% 40% from 15% from 15% 0,01% 16 Supplier Evaluation by Softfacts Strategic Supplier Evaluation Initiator of Evaluation: Operative Supplier Evaluation Survey Supplier Evaluation Hardfacts Softfacts Quality Logistics Productcompanies Costs Lead Buyer Innovation Frequency: 1 per year Initiative After-Market (Motivation) Motivation & Strategy 6 different evaluation forms Evaluation ... 17 Supplier Evaluation by Softfacts Evaluation scale is standardized for all softfacts Type A (Standard / 5 steps) - Description Points Target Achievement CLAAS expectations are completely fulfilled 10 100% CLAAS expectations are almost fulfilled 8 80% Supplier performance is acceptable 6 60% Supplier performance does mostly meet expectations 4 40% Supplier performance does not meet expectations Not applicable / answer can not be given 0,001 0 0,01% - Type B (Digital / 2 step) - Description CLAAS expectations are completely fulfilled Points 10 Target Achievement 100% Supplier performance does not meet expectations Not applicable / answer can not be given 0,001 0 0,01% - 18 Output of the Supplier Evaluation – Actions & Consequences Strat. Supplier Evaluation Supplier performance tracking: Reactive securing of quality and supplies Operative Supplier Evaluation Survey Supplier Evaluation Hardfacts Softfacts operative Reports Development Supplier development: Proactive future orientated optimisation of the number of suppliers strategic Warning Classification Reports Development Warning Initiation of reactive and proactive actions & consequences 19 Criteria of Performance Measurement and Evaluation Performance Index Quality Logistics Costs Innovation Motivation - Product Quality (ppm) - Supply Quality (Disturbance Rate Product) - Quality in Field - Complaint-Management and Communication - Management of Quality 20 Criteria of Performance Measurement and Evaluation Performance Index Quality Logistics - Product Quality (ppm) - Delivery Accuracy - Supply Quality (Disturbance Rate Product) - Supply Quality (Disturbance Rate Logistics) - Quality in Field - Supply Handling - Complaint-Management and Communication - Logistical Cooperation Costs Innovation Motivation - Communication - Management of Quality 21 Criteria of Performance Measurement and Evaluation Performance Index Quality Logistics Costs - Product Quality (ppm) - Delivery Accuracy - Competitiveness - Supply Quality (Disturbance Rate Product) - Supply Quality (Disturbance Rate Logistics) - Cost Reduction Initiative - Quality in Field - Supply Handling - Complaint-Management and Communication - Logistical Cooperation Innovation Motivation - Price Development - Communication - Communication - Management of Quality 22 Criteria of Performance Measurement and Evaluation Performance Index Quality Logistics Costs - Product Quality (ppm) - Delivery Accuracy - Competitiveness - Supply Quality (Disturbance Rate Product) - Supply Quality (Disturbance Rate Logistics) - Cost Reduction Initiative - Price Development - Communication Innovation Motivation - Development Competence - Technology Leadership - Research and Innovation Power - Quality in Field - Supply Handling - Complaint-Management and Communication - Logistical Cooperation - Technical Cooperation - Communication - Communication - Management of Quality 23 Criteria of Performance Measurement and Evaluation Performance Index Quality Logistics Costs - Product Quality (ppm) - Delivery Accuracy - Competitiveness - Supply Quality (Disturbance Rate Product) - Supply Quality (Disturbance Rate Logistics) - Cost Reduction Initiative - Price Development - Communication Innovation - Development Competence Motivation - Customer Orientation - Technology Leadership - willingness for Cooperation - Research and Innovation Power - Openness and Transparency - After-Market Strategy - Quality in Field - Supply Handling - Complaint-Management and Communication - Logistical Cooperation - Technical Cooperation - Communication - Communication - Management of Quality 24 Criteria of Performance Measurement and Evaluation Performance Index Quality Logistics Costs - Product Quality (ppm) - Delivery Accuracy - Competitiveness - Supply Quality (Disturbance Rate Product) - Supply Quality (Disturbance Rate Logistics) - Cost Reduction Initiative - Price Development - Communication Innovation - Development Competence Motivation - Customer Orientation - Technology Leadership - willingness for Cooperation - Research and Innovation Power - Openness and Transparency - After-Market Strategy - Quality in Field - Supply Handling - Complaint-Management and Communication - Logistical Cooperation - Technical Cooperation - Communication - Communication - Management of Quality Total: 23 criteria within the five pillars 25 Content The Company CLAAS Motivation for the Project Supplier Evaluation Evaluation Concept Realisation and System Environment Supplier Evaluation as Key Success Factor of SRM 26 Implementation of the Supplier Evaluation within the SAP Landscape * ACS = SAP Add-On Automotive Consulting Solution 27 Access to Supplier Evaluation – SAP Web-Reporting Tool 28 Content The Company CLAAS Motivation for the Project Supplier Evaluation Evaluation Concept Realisation and System Environment Supplier Evaluation as Key Success Factor of SRM 29 Supplier Evaluation as Key Success Factor of SRM With a share of around 70% of added value suppliers play an important role Supplier Selection Supplier Evaluation Su p p li Lieferantenbewertung Supplier Management Qualität Logistik Kosten Innovation Motivation Umfassende Bewertung durch die involvierten Fachbereiche In n Development r i on Supplier o o pe at C er te g r at io Supplier Classification Phase-out of Suppliers 30 Results of the integrated Supplier Evaluation Lieferantenbewertung Qualität Logistik Kosten Innovation Motivation Increase of customer satisfaction Umfassende Bewertung durch die involvierten Fachbereiche Development of technology leadership Optimisation of costs, processes and products Increase of product and service quality Optimisation of the number of suppliers li Lieferantenmanagement In n Su p p io n Development of suppliers C o o pe r at er te g r at io 31 Thank you 32
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