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Harmonization of Indirect Purchasing -Agenda Indirect Purchasing Overview Key Elements of Indirect Purchasing Indirect Purchasing - Challenges Solution Approach Indirect Purchasing Solution i-buy Solution IT Approach Solution Benefits
Indirect Purchasing Overview MRO Office Supplies Facilities Management Services Key Elements Internal Customers Multiple Sources Varied Categories Abundant Supplies Budgeted to cost centers Capital Investments Indirect Purchasing require special strategies to handle
Indirect Purchasing- Challenges View of Internal Customer Does not have the time/ resources to research a product. Gets quotation, research on the product, provide every detail in the form of PR Primary responsibility is purchasing and hence considers this as overhead Needs to follow up for approvals Always buys the product at the retail price Do not know which purchaser is working on approved PRs View of the purchaser Do not have the resources to plan / negotiate the price for all products Do not worry about the demand/ price in neighbouring location They are localized and the same person is responsible for all materials. From office stationary to machine maintanence Do not have sufficient information on the PR and need additional information Difficult to gather sufficient information for month end reporting
Indirect Purchasing- Challenges Complexity Amplified No Of associates High purchasing volume Multiple small orders/year Multiple suppliers different IT systems Addressing Indirect Procurement challenges would need Global Processes and Harmonized Solutions -divisions - purchasing offices - plants -location spread
Solution Approach Organiza tion Processes Consolidate and redefine indirect processes Reorganize purchasing function for the new processes Create new roles and responsibilities to handle the changes Roles and Responsibilities Support all the above with relevant master data Utilize IT as enablers for automation and value creation Master Data IT Enablers
Solution Approach Global focus on top spends addresses 50% of the problem
Indirect Purchasing Solution i-buy : Set the goals Global organization in Indirect Purchasing Merging Indirect Purchasing offices into new regions worldwide, with target responsibility by Central Purchasing Experts focus on their material field as their core competence based at their local plant but responsible across sites Standardize reporting across all regions
i-buy : Objectives Achieve Highest Bundling Potential Material Strategy Supplier Strategy Volume Bundling
Indirect Purchasing Compass One Common place for Indirect Purchasing Detailed processes, organization and classification IT Tools, Guidelines, Templates, Good Practices, Rules/Regulations
Indirect Purchasing -Processes Leadership processes Processes which facilitate Indirect Requisition to Order fulfilment Data Manag ement Types of Admin process
Organization Structure REGION GLOBAL TEAMS Global and Regional Perspective Market know-how Compliance Competency Regional Perspective Input & Execution Material Field Strategy Procurement Performance Interface to customers Supplier Management
Solution- IT Approach Redefine Processes Map Processes Vs IT Develop Global Template Define Local Elements Rollout Methodology
Solution- IT Approach Rollout Methodology- Content -Purchasing masters -User Authorization -System Landscape -Standardized reports for regional purchasing -Automated interface to the Indirect Cost Report Reporting Harmonize Portal Solution -Global functionalities (P2P cycle) -Cross system data access via one single screen (Single sign on)
Solution- IT Approach System Landscape i- BUY BU1 Purchaser BU2 Purchaser BU3 Purchaser Vendor Portal based SAP solution (Access Control, Front end Application, business Logic SAP System 1 SAP System 2 Others Data base Data base Data base
Solution- IT Approach Portal Solution built on SAP SRM platform to create online requisitions with predetermined workflow and auto purchase orders
Solution- IT Approach All Purchasers are integrated into Bosch Portal by which purchasers across regions access different SAP Systems
Solution i-buy :Benefits Before i-buy With i-buy Buyers responsible for diverse goods in their plant Experts: Focused on their material field as their core competence, based at their local plant but responsible across sites. Creating competence centers for specific material fields to handle purchasing across one sub region.
Solution i-buy :Benefits Benefits for Bosch Additional saving of 2% points per year in 2011 and 2012 Development of competencies Clear assignment of tasks & material fields in Indirect Purchasing Increased transparency and data quality through simplified IT systems Bosch-wide optimization and standardization of procurement processes Global steering of associates through policy deployment process in responsibility of CP Powerful and professional Indirect Purchasing organization
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Back Up Slides
Solution i-buy: Lessons Learnt i-buy is implemented following a standard approach The concept will be rolled out in every region as a separate project Regional specifics will be taken into consideration The regional rollouts will be conducted in parallel, however they will start at different points in time The rollouts are led by a team of regional and central project members Make policy deployment mandatory
Key Take Aways Top Down approach Identifying the right IT platform Roll out approach, Template and Pilot
Indirect Purchasing - Challenges
Solution- IT Approach System Landscape Before i- BUY BU1 Purchaser BU2 Purchaser BU3 Purchaser BU4 Purchaser PR creation, Master Data Reports SAP ECC SAP 4.7 MFG Pro Home Grown Upstream / Downstream Consolidation
Solution- IT Approach Build Once and Deploy @ Multiple locations Template -Bundles standardized Purchasing processes -Links process specific developments, configuration and test data. Local Functionality / Customization One country One legal entity Financial reporting & Legal reporting. Local tax issues Local currency Local language Participants -Purchasing Leads -Process Owners -IT architects Study the current business in the specific country Check the fitment of the template to meet the local legal requirements Discuss and suggest changes required in the template with the decision makers and decisions taken Integration of the country specific requirements into the template for a successful iollout
Process and Solution Approach Redefine Indirect Purchasing Processes to map the organizational strategies Analyze and decide upon the processes which can utilize Information Technology Map the business processes in the IT solution with a pilot location Develop a template with global processes which can accommodate local process Define Rollout Methodology and implement region wise rollouts