Direct materials sourcing, contracting, and supplier management processes are often more complex than indirect, and spend value is significantly higher, especially in large global, diversified companies. Manufacturers must harness the buying power of their global business units and ensure that negotiated savings are fully realized in their execution processes. Join this session to learn how a diversified global manufacturer is achieving all of this and more.
8. 8 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Source: thyssenkrupp AG
• Key indicators – fiscal year 2015/2016
• Sales > 39 bn € ~ 470 Group Companies
• Adjusted EBIT ~ 1.5 bn € ~ 80 countries, ~ 2,000 locations
• Material cost 23.5 bn € > 156,000 employees
“Ingenieurkunst”
Engineering or the ability to
connect competencies
• Components Technology - Elevator Technology - Industrial Solutions -
Materials Services - Steel Europe - Steel Americas
9. 9 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Engineering expertise for sustainable progress for our customers
Product and service examples in our application areas
Mechanical
Energy
Slewing bearings
and rings for wind
turbines
Construction
Up to 66% greater
energy efficiency in
elevators
Automotive
Valve control enables
4.1 t less CO2 per
vehicle over lifetime
Minerals & Mining
Fully mobile crushers
enable up to
350,000 t less CO2
per year
Plant
Construction
Up to 40% reduction
in CO2 emissions in
cement plants
Automotive
Development of
production lines for
lithium-ion battery cells
Chemicals
EnviNOx®: Up to 99%
reduction in N2O/NOx
in fertilizer plants
Chemicals
Process technology
for polylactides: New
plastics based on
biomass
Materials
Automotive
High-strength steel
reduces weight by
up to 30%
Energy
Non-oriented electrical
steel reduces energy
transmission losses
Construction
Optimized corrosion
protection through zinc-
magnesium coating
Packaging
Ultra-thin packaging
steel improves resource
efficiency by 23%
10. 10 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp – Strategic Way Forward
Key initiatives
Strategic
push
Financial
stability
Performance
orientation
Customers &
markets
People
success
Organic
growth:
Expand
market
positions
Strengthen
innovation &
technology
Inorganic
growth
Balanced
portfolio
Strong cash
flow position
Gearing
<100%
Equity > 15%
Investment
grade
Brand
thyssenkrupp
Market
intelligence
Sector
strategies
Customer
relationships
Sales
excellence
Active
portfolio
management
Capital
efficiency
Continuous
benchmarking
Operational
excellence
Functional
excellence
Profitable
growth
Mission
statement
Leadership
Network
organization
Governance
Compliance
Systems &
processes
HR Global
2020
People
excellence
Employee
survey
Safety &
health
Diversity &
inclusion
HR
transformation
Diversified Industrial More & Better, Sustainability
Change
management
11. 11 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Leading engineering expertise supports global sustainable progress
Source: thyssenkrupp AG
Globalization
More resource
and energy use
Urbanization
More infrastructure
and buildings
More consumer
and capital goodsDemography
Reduced CO2
emissions,
renewable energies
Climate
change
Efficient resource
and energy use,
alternative energies
Finite
resources
Compliant products
& services
Regulation
& politics
Leading
engineering
expertise
Smart data,
integration, and
holistic solutions
Increasing
connectivity
Digitization
More digital
value creation
“More” “Better”
13. 13 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp Procurement & Supply Management (PSM) – Key directions for further
optimization of functional value contribution and efficiency
Source: CO/PSM
Turn
spend into
value
for tk
Drive and leverage automation & digitization
We clearly follow our PSM Strategic Way Forward
Drive technical levers along the Product Lifecycle
- Address full spend strategically with less local effort
- Local employees acting as network resources in clusters
for faster measure implementation with higher added value
- Stringent implementation and utilization of existing and
new systems and solutions (e.g. pronet/SAP Ariba) for
high efficiency
- Align activities and targets with cross-functions for new
bottom / top-line effects, ensuring optimum resource utilization
14. 14 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Successful businesses are increasingly networked and digitized – inside and out
Source: thyssenkrupp AG
Prof. Yochai Benkler,
Harvard University
“The world is becoming
too fast, too complex and too
networked for any company to
have all the solutions inside.”
15. 15 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Network building step 1: Closely connected internal procurement network involving all
thyssenkrupp businesses, regions and functions
For illustration purposes only, not comprehensive, individual business entities not depicted
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
tk
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
BA
BA
BABA
BA
RHQ
RHQ
RHQ
RHQ
RHQ
tk
AG
BA
Global Supply Markets
Shared functional procurement
strategies and aligned targets that
deliver business value
Joint commitment to highest levels of
professionalism
Flexible, agile structures involving
businesses,
regions and functions
High synergy utilization from knowledge
and task sharing
16. 16 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Network building step 2: Cluster teams positioned to implement material field strategies
and ACT AS ONE thyssenkrupp in global supply markets
tk
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
Global Supply Markets
BA
BA
BA
BA
BA
RHQ
RHQ
RHQ
RHQ
RHQ
tk
AG
C
C
C
C
C
C
C
C
C
C
C
CC
C
C
C
C
C
C
BA
For illustration purposes only, not comprehensive, individual business entities not depicted
Cluster Teams set up as virtual agile
teams, firmly anchored in tk / PSM
network
Responsible for translating business
strategies and supply market intelligence
into innovative, value adding material
field strategies
Possible future step: digitize and
combine strategy documentation and
real-time supply market intelligence for
faster decision-making
17. 17 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Network building step 3: Clusters bring strategically selected suppliers into a high-performing
network
For illustration purposes only, not comprehensive, individual business entities not depicted
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
tk
Global Supply Markets
C
C
C
C
C
C
C
C
C
C
C
CC
C
C
C
C
C
C
BA
BA
BABA
BA
RHQ
RHQ
RHQ
RHQ
RHQ
tk
AG
BA
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
SupplierSupplier
Supplier
Supplier
Supplier
Supplier
Supplier
SupplierSupplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Cluster Teams strategically select best
suppliers for tk
Suppliers to be digitally connected to tk
processes and systems for high
transparency and efficiency, without tk
loosing agility or market leverage
18. 18 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Efficient and effective collaboration between multiple internal and external partners requires
standardized common processes and formats
Source: thyssenkrupp AG
Big step forward to digitization and smart collaboration for thyssenkrupp procurement together with strategically
selected solutions provider
Implementation ongoingAmbitious rollout target: Three strategic modules to be
rolled out globally in 24 months (> 250 legal entities)
Supplier life-cycle
• Supplier Registration
• Supplier Qualification
• Supplier Evaluation
• Supplier Development
• Supplier Phase-out
Contract life-cycle
• Contract Drafting,
Negotiation & Approval
• Storage & Repository
• Contract Compliance
• Monitoring & Search
Tendering & and
negotiations
• eRfI
• eRfQ / eRfP
• e.bidding & e.auctions
• Awarding
Self-service procurement
• Enablement of
supplier
and tk-internal
catalogs
• Automated catalog
verification
• Integrated with SRM
Electronic data exchange
• Business Network for
Supplier Collaboration
• Transactions such as
- PO exchange
- Invoice exchange
- Supply Chain
capabilities
Integrated „Source to Contract“ process Operational procurement
19. 19 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp group companiesdaproh*
pronet replaces the current stand-alone solutions and will be integrated into the daproh / ERP system
world - Invest to gain even higher efficiency through further integration for (direct) sourcing
Non SAP system
thyssenkrupp pronet
SRM
Group Master Data
System (GMDS)
- Global Supplier Master
Data-
Local non-daproh
ERP System (SAP)
Local daproh ERP
System (SAP)
Catalog Ordering
+
*) daproh – data & process harmonization
Local ERP System
newnew new
Distribute contract ERP
create outline agreements
Integration enhancement
to upload BOM/BOS
Connect non daproh-systems
e.g. tkE US Oracle
20. 20 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Involvement of PSM in PLM process
Today the main involvement of PSM professionals takes place after Requirements Engineering phase.
Source: CO/PSM
Design-to-Cost
Simultaneous Engineering
Production & Logistics ConceptsValue Engineering
Demand Planning …
Supplier Innovation Roadmap
Market Intelligence
Standardization, Substitution
Value Analysis
Future direction of PSM involvement
From operational to more tactical & strategic
21. 21 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
pronet as enabler for full integration of PSM in cross-functional collaboration
illustrative
powered by
Purchase to order/pay
22. 22 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Full procurement contribution from creating strong bottom-line and top-line effects throughout
integrated value chains
Source: thyssenkrupp AG
SUPPLIER`S
SUPPLIER
CUSTOMER END
CUSTOMER
SUPPLIER
Linking our suppliers Linking our internal
cross-functions
Linking our customers
Creating new (digital) products, services, solutions, business models with suppliers
23. 23 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
pronet / SAP Ariba solutions fully aligned with daproh IT-Strategy – further involvement into
daproh templates required