Manage global – act local
Planning and Global Commodity Management work in close cooperation for the procurement of equipment. An insight is provided by Hubert Reinkunz, Head of Planning Body Construction Z3, Matthias Hoefer, Subproject Head of Shell S-Class BR223 and Andreas Reinhardt, Global Commodity Manager Procurement Chassis Body-in-White.
Cars with star are more popular than ever before. With plants around the world, Mercedes-Benz also covers the local demand: New opportunities for production and procurement aswell. How do you utilize them?
Reinkunz: Planning and Procurement work closely together across all sites worldwide, which is highly efficient because we have implemented and realized standardized processes. This provides us with important advantages compared to the competition.
Reinhardt: In order to provide optimal support for our specialist units, we have adapted the Global Commodity Management to meet current demands – e.g., by utilizing our local procurement expertise at the sites and the establishment of an international supplier portfolio. This allows us to utilize the international supplier markets across the board and procure commodities efficiently. All parties involved profit from our superior assignment strategy. Just as recently with the procurement of the S-Class chassis body-in-white.
What did the requirements of the Planning department look like during the tendering stage?
Reinkunz: The S-Class is the flagship of Mercedes-Benz. With the S-Class, we are bringing many innovations to series production, such as increasingly more light-construction body parts. In addition to the production, assembly and commissioning of the chassis body-in-white, the coordination of the production technologies, e.g., welding, bonding or riveting, were part of the scope of the call for tender. The focus was especially on the qualification of the suppliers and the award strategy. This addressed the question of whether to award the complex assignment in packages or as a whole. In addition, it had to be ensured that the suppliers had free capacities in addition to the required performance.
What was the role of the Global Commodity Management in this?
Reinhardt: Our task was to balance the requirements of the planning and the agreed upon cost and price targets. For this purpose, we have identified proven partners and new plant suppliers. We accessed site-specific market knowledge and made it available centrally for the S-Class. In addition to the selection of qualified suppliers, the global management function also included the market analysis, in which we identified the best possible award date, which also provides favorable order processing for the supplier.
The Global Procurement Strategy also provides opportunities for worldwide awards for suppliers?
Reinhardt: Exactly, the Global Commodity Management identifies supplier markets that have not been developed for us at this time. For this purpose, we even tour operations on-site; sometimes with the local Procurement Department and the technical colleagues from Planning and Production. This also includes the possible post-qualification of interesting partners. As part of the S-Class award and the completed procurement market examination in China, this enabled us to locate additional local suppliers, in China for example, in the shortest period of time possible, who are now participating in the call for tender for the C-Class chassis body-in-white as well. The established suppliers also benefit from our improved market knowledge, because this allows the identification of new cost potentials – without them, the competitiveness would be lost in the long run. Here, the Global Commodity Management acts as a link and central contact person and establishes transparency on all sides: For the planning areas, local purchasing agents and suppliers.
Is there additional knowledge that is transferred to the C-Class project?
Hoefer: Yes, because the Global Commodity Management made a very good overall result possible. New suppliers have intensified the competition. This will now also benefit the new C-Class: The new “players” have familiarized themselves with our standards, tools requirements and supplier evaluation system as part of the tendering stage of the S-Class. This ensures that the number of bidders will include a broad spectrum of not only commercial but also technical competitors that must be taken seriously as part of the C-Class request for quotation.
Reinhardt: The current request for quotation for the C-Class exhibits another advantage of the Global Commodity Management. Different from the S-Class, which only rolls off the line in Sindelfingen, the C-Class is manufactured at four plants. The superior award strategy assures the same optimal conditions for all sites. However, the implementation in Bremen, Kecskemét, East London and Peking occurs locally. All country-specific special characteristics can thereby be taken into account perfectly. A major success factor is the close and central coordination between the Planning Department and the Global Commodity Manager, who in turn makes the relevant information available to the local purchasing agents and vice versa.
Thank you for speaking with us.