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The specialist machinery manufacturer KOSME is a typical Austrian SME with around 160 employees. In a three-phase project, the purchasing department is now realizing the value creation potential of business digitalization. Phase 1 includes the installation of the DIG.procure catalog platform and the connection of the company's suppliers - from very large to very small.
"Until a few years ago, digitalization and eProcurementwere strongly oriented towards EDI - but this is too narrow for medium-sized companies with an extensive supplier network," explains Purchasing Manager Thomas Mikl. The large suppliers that would be suitable for EDI can be counted on one hand at KOSME: "Bernecker & Rainer for classic catalog items, Schinko as a contract manufacturer - but we see the main benefit in eProcurementin connecting the many small partners, some of whom do not even use an ERP system and are therefore used to sending documents by email. This is where DIG really comes into its own."
The day-to-day procurement of indirect materialshas been carried out via the eProcurment solution of the DIG catalog platform since November 2019 : the purchasing department's specifications were implemented precisely , particularly with regard to account assignments, purchasing authorizations, cost-specific approvals and supplier catalogs. Depending on the user group to which they belong, defined products are available for the individual user. Approval processes depending on value limits and the dual control principle for each order can thus be easily complied with: "The eProcurement workflow has proven itself particularly in the Corona-related home offices: The approvals of individual orders can be issued from the workplace or even mobile via laptop or smartphone - instead of printing them out and obtaining signatures!"
A total of 7 catalogs with thousands of products are currently linked to the system, and work is underway to expand it. "The free text orders were particularly important to us: We use these for maintenance contracts, spare parts, services, etc. These are all things for which a separate order number would have to be created in our ERP system, which is ultimately expensive.
Regardless of whether an order is placed from the catalogs or via free text or OCI stores (e.g. Amazon Business - not used by KOSME eProcurement), different information can be assigned to each order: from a specific delivery address or company location to the respective recipient of the goods. 44 different positions have been integrated for account assignment, and a project and investment number can also be freely assigned. Together with the optional purpose of use, a clear assignment of each order is therefore possible. Approval is also multi-level , depending on the product group and value limit: "At KOSME, we always use the four-eyes principle, but three approvals may also be necessary - the system is completely flexible in this respect." The persons responsible are derived directly from the cost center, the product group and the management. Once the order has been approved, it is stored in the in-house document management system, while the supplier receives a PDF in a defined KOSME layout - or an EDI file, depending on the type of connection.
> Thomas Mikl emphasizes the flexibility in the digital mapping of the specific release guidelines depending on the product group, cost centre and value limit.
"We were aware that we weren't IT experts," says Mikl, explaining the starting point of the eProcurement project. This made the choice of partner all the more important to him: "The problem already arises during the tendering process: what is the basis for the offer? We don't have the opportunity to work out the project so gradually that all the steps are clear in detail." That's why flexibility and handshake quality were important to KOSME: "I saw a presentation by Harald Allerstorfer at the Partner Day 2018 and was convinced: they live our values, work flexibly and suit us."
With this impression of handshake quality, the project got off to a fairly agile start - even DIG's extensive blueprint was constantly updated: "In coordination with the individual specialist departments, there were always changes, new fields, etc. DIG implemented all of this extremely quickly and flexibly without exceeding the budget." And this despite the fact that the project took six months longer than originally planned, which was due to the sustainable structuring of the master data and the ECLASS strategy.
The key to the solution is the availability of product data. That's why those responsible at DIG take care of the connection once the (content catalog) suppliers have been announced: The technical conditions are clarified and the eProcurement catalogs are imported. These are then randomly checked - especially with regard to prices and general conditions. The entire supplier master data record is updated once or twice a day and any changes are summarizedin a clear delta report for approval.
Various points with single sign-on have been provided for accessing the eProcurement system: the company's own intranet, the INFOR ERP system and the company's own wiki. In this way, the working environments of the individual user groups (management, IT, design, mold making, purchasing, etc.) are taken into account in the best possible way. "As KOSME is integrated into the IT system of the parent company KRONES AG, appropriate coordination had to take place when embedding it into the intranet," Mikl recalls with satisfaction: "This worked out excellently with DIG, as did the cooperation with our providers for the ERP and document management system." There are currently 40 users working with the system; new users automatically receive standard rights, which an admin can adjust accordingly.
"Digitalization has a high priority in procurement at KOSME: with the available technologies, process cost reductions and a high level of security are also achievable for SMEs. However, eProcurement is not just a necessity for us to increase our competitiveness," says Mikl, painting a picture of the near future. Phase 2 will focus on the document flow in the area of direct materials: "Here, DIG offers a solution with convenient alternatives to EDI that is very much in line with our supplier structure. However, our business model makes this an exciting task." This is because numerous parts of the special machines are manufactured according to specific specifications: "These are transmitted as PDFs, in 2D and 3D representations, as the basis of the order. Automatically assigning all of these specifications from our document management system to the specific order will certainly be very challenging."
The next phase will then focus on supplier management in the form of efficient tenders and tools for strategic buying: "But that won't be the last step: Digital processes also open up new options for handling complaints or evaluating key figures." For the buyer, value creation is what counts above all: "It is extremely valuable to know in which product group there is the greatest potential for optimization - daily updated key figures provide a reliable basis." And freeing up employees provides the necessary resources - for example, to optimize the cost calculation together with the design department: "Technically equivalent alternatives to price drivers make us competitive. The buyer's time is more profitably invested here than in manually comparing documents." As a manufacturer-independent, flexible expert in the central areas of business digitization, DIG is the ideal partner on this path into the future, even beyond eProcurement.
