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Danfoss IT Procurement Case Study 2019

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Summary how Danfoss secured 15% savings on their IT purchasing (hardware and accessories) in 24 EMEA countries.

This project was shortlisted for the World Procurement Awards 2020: External Collaboration Category. See https://worldprocurementawards.com/shortlist/

Published in: Engineering
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Danfoss IT Procurement Case Study 2019

  1. 1. PARTNERSHIP AVERAGE PRODUCT PRICE REDUCED: 14,5% IN YEAR ONE, 10-14% THEREAFTER. THOUSANDS OF HOURS SAVED FROM REDUCING PROCESS AND PURCHASING TIME. REDUCED SUPPLIER COUNT... FROM 130 DOWN TO 1 AVERAGE DELIVERY TIME CUT 90% FROM 28 DAYS TO 2.75 ACROSS 25 COUNTRIES. STABLE FOR 5 YEARS. GOALS • Reduce costs of products purchased • Reduce time spent on purchasing processes • Increase insights into purchasing patterns • Data visualization and cost awareness • Total automation for optimal workflow • Simple system with transparent supplier information and pricing • Reduce their supplier count DANFOSS SITUATION 2014 €2M annual spend on IT accessories from 130 suppliers across EMEA region. DANFOSS IS AN IDEAL PARTNER The Danfoss team’s commitments to professionalism, innovation and delivering value to their shareholders allow us to consistently deliver significant savings in both actual product costs and IT purchasing process time. Our relationship a perfect example of win-win for all concerned, with a bright future in EMEA and beyond. Margus Vahemäe Head of Sales at Markit KEY IMPACTS The Danfoss Group manufactures products and provides services used in cooling food, air conditioning, heating buildings, controlling electric motors, gas compressors, variable-frequency drives and powering mobile machinery. Danfoss Procurement employs more than 500 people employees worldwide that aim to increase supplier performance, develop active partnerships to expand business opportunities as well as minimize complexity and annual costs. Danfoss makes significant investments in growth initiatives and digitalization to advance its connected, intelligent solutions. In 2018, Danfoss invested a record-high EUR 255m equal to 4.2% of sales into innovation. ABOUT DANFOSS • Centralised, approved product catalogue management for all countries • Special prices for high volume categories and brands • Automated Ariba integration • Clearer overview of spending patterns, with detailed, visualised insights • Reduced carbon footprint (shorter delivery distances) • Ability to rollout in a new country in days, not weeks or months DANFOSS SUCCESS STORY EMEA consolidation project cuts IT purchasing costs by 15% in 24 countries ENGINEERING SERVICES IN 100 COUNTRIES WITH 28,000 EMPLOYEES DANFOSS.COM
  2. 2. THE PROCESS MARKIT ADDRESSED OUR CHALLENGES HEAD ON The Markit system gives us a single, simple and transparent, cross-border Danfoss IT purchasing system. Markit has consistently impressed us with their long-term business view, flexibility, quality of service and, most importantly, their ability to repeatedly deliver cost savings. Claus Mikkelsen Danfoss Global Category Manager INTEGRATION Integration with our ERP and Ariba was quick and easy, for example in one quarter, we rolled out in 7 countries. The Markit infrastructure and system is geared towards internationalisation and has the flexibility to tailor special features to meet our needs. Peeter’s team is friendly, professional and fast. Joanna Siemiatkowska Global Project Manager Christine Christensen Vendor Operations Specialist CONFIGURATION Configuration of the catalogue, customisation of management report dashboards & templates, defining user roles and setting limits for various end users were all straightforward. Carsten Matthiesen IT-Purchaser at Danfoss Global Services, Procurement Order Management ONBOARDING Onboarding of users was efficient. It’s a complex system but easy to use. Much easier than the process we had before. Jüri and his team in customer service are always there for us if we need help too, which is rare. Casey Gigler Head of IT Services Americas LET’S TALK Let us help you succeed. Streamline your IT purchasing process and reduce your total cost of purchase. Margus Vahemäe Head of Sales at Markit Phone: +372 666 9905 E-mail: margus.vahemae@markit.eu Christian Lunøe Country Manager at Markit Denmark Phone: +45 60 98 80 88 E-mail: christian.lunoe@markit.dk TAKE THE CHASING OUT OF IT PURCHASING ABOUT MARKIT Markit is helping IT buyers save time and money by making IT purchasing simple and transparent. Since 2003, thousands of international companies, including 20% of the Forbes Global 2000, have been using the Markit online IT purchasing solution to manage, centralise and streamline their IT purchasing and reduce the Total Cost of Purchase for their IT hardware and device requirements. WWW.MARKIT.EU 2019

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