KWS
Digital Transformation in Procurement
DIGITAL REPORT 2020
IN ASSOCIATION WITH
02
KWS: Digital Transformation in Procurement
03
www.k ws.c o m/ c or p / en /
KWS
Peter Hagenow, Head of Strategic Procurement at KWS, discusses the digital transformation of the procurement function at his organisation
K
WS is one of the world’s most renowned plant breeding companies. Founded over 160 years ago, KWS focuses on plant
breeding and the production and sale of seed for corn, sugarbeet, cereals, rapeseed, sunflowers and vegetables. Peter Hagenow is the Head of Strategic 04
Procurement at KWS. Having joined the organisation in November 2018, Hagenow possesses over 15 years of international experience in large and medium sized industries and has held positions in sales, procurement, manufacturing and general management. Upon joining KWS, Hagenow set a roadmap and began to transform the procurement function. “When I joined the company, I was on my own in the global procurement department and it took some weeks before anyone else joined,” he explains. “At the same time, we were starting to develop the global transaction centre which my equal, Maik Mueller, headed up as the team lead. Both of us then began to create our teams and to set up the process landscape. My primary role was to search for category managers both internally
05
www.k ws.c o m/ c or p / en /
Digital Procurement: Lean Processes, Lower Costs, Better Decisions Digitization makes purchasing more efficient across all industries. An online store like Amazon Business helps companies streamline processes, control costs and make better buying decisions. The tail spend purchases outside of negotiated procurement contracts - in particular can be managed in a more cost-effective way. Small product orders account for up to 20 percent of a company’s expenditure but make up 80 percent of suppliers. With digital procurement, managers are contributing to their company’s success by saving costs. Optimizing search, approvals, order processing, and payments have a potential to cut non-material costs significantly in every order. In contracted categories, as e.g. IT accessories, office and MRO supplies, savings can be realized due to lower unit prices, e.g. about 20 percent in IT peripherals according to the recent Deloitte study “COP response to combat Covid-19”.
Another advantage is that employees know Amazon from their private shopping experience and intuitively find their way around Amazon Business. They are enabled to purchase goods themselves - critical product groups can be excluded, and approval processes applied. Amazon Business can be easily integrated into the existing ERP or procurement systems. B2B online stores are a key element of digital procurement. Companies benefit from lean processes, lower process costs, competitive prices, and volume discounts. For purchasing managers, B2B online stores should therefore be a key factor with regard to designing their procurement strategy.
LEARN MORE
and externally to create a team of true
about 65% of our workforce glob-
experts in procurement. Today, the
ally,” he explains. “The next step is to
teams are close to being completed
stabilise the core and add more stra-
and we’ve started to integrate bots
tegic processes to the digitalisation
on the operational side, while having
agenda. Ultimately, we want to make
a true expert network on the more
purchasing as simple as possible
strategic side.”
and it should be as easy as doing online
Under Hagenow’s leadership, KWS
shopping at the weekend. We want
is connecting all 70 of the countries
that same experience and to make it
it serves through its centralised pro-
as streamlined as possible.
curement function in Berlin. “We’re over
To try and make this happen, we’ve
halfway through and have connected
set up electronic catalogues in our 07
www.k ws.c o m/ c or p / en /
KWS
08 purchasing system that allows you to
desired goal in a few simple steps.
check out in six clicks only and make
With only a few clicks, the office
it easy for our internal customers.
supplies are ordered in a catalogue
That’s what we’re constantly
system, such as Amazon Business.
striving for.”
Algorithms help us to find even more
Hagenow has observed how
optimal ordering slots. Approvals are
digitalisation has transformed pur-
made on the road by mobile phone.
chasing and recognises the trend of
Contract texts can be evaluated
buying online. “We all buy something
automatically, signatures via computer
almost every day and we love to buy
have become standard. Ordering by
online. Nobody finds this process
voice or chatbot are reality. A number
difficult and we find efficiency is very
of years ago, it was my aim to have
high,” explains Hagenow. “This is
a fully paperless office and I believe
also expected of modern purchasing.
we will make this a reality very soon.”
Digitalisation allows us to reach the
“However, this means that we have
“ We must take care of the workforce of today to ensure they’re equipped with everything they need to succeed for tomorrow” — Peter Hagenow, Head of Strategic Procurement, KWS 09 to be able to control the data that
biggest benefits of a centralised
accumulates, i.e. make it available
procurement process is creating one
for evaluation and use. This is a new
unified way of doing things to make
requirement for purchasing. But we
the process more efficient. “With pur-
should not and must not be afraid of
chasing, if you have one unified way
change. I believe that with all the auto-
of doing things then it allows you
mation and optimisation, manpower
to think about automation,” says
will not be lost. It will look different
Hagenow. “During the last two years,
in the future, maybe we will automate
we’ve set up the procurement pro-
purchasing as far as possible. The
cesses in a way where the approval
concepts, the contents and the control
of a purchase is done at the very
of the systems will simply become
beginning. For example, if I want
more important and job descriptions
to buy a type of equipment above
will change accordingly.”
a certain threshold and my manager
Hagenow believes one of the
needs to approve it to ensure we www.k ws.c o m/ c or p / en /
KWS
“ We want to make purchasing as simple as possible and it should be as easy as doing online shopping at the weekend” — Peter Hagenow, Head of Strategic Procurement, KWS have the budget then this can be easily done. This means that when it’s all 10
approved and the item is delivered, we don’t need to look at the invoice anymore, we can automate the payment. This is
less required to approach the supplier
why it’s important to have a centralised
base with a club on their back, but
procurement process.” Over the past
rather to seek strategic approaches and
two decades, Hagenow believes that the
partnerships.”
job profile of the buyer has transformed
With over 160 years of experience
as the world continues to embrace digi-
in the industry, Hagenow acknowledges
talisation at scale. “Digitalisation is the
the added challenge of convincing every
keyword,” he explains. “ERP systems
employee to transform operations and
have been occupying us for some time
the day-to-day process. “Our company
now, the operative buyer has become
has been around for such a long time
less and less a mere typist who some-
that it makes it more challenging to
how transports the order into the ERP,
change the process,” he explains. “We
and is increasingly developing into
constantly get asked: why change
a Content & RPA Manager. At the same
something that works? So, this took
time, strategic purchasers are less and
a little time to get everyone onboard.
11 E X E C U T I V E P R O FILE :
Peter Hagenow Title: Head of Strategic Procurement Company: KWS Industry: Agriculture
Location: Einbeck
Peter Hagenow is KWS’ Head of Strategic Procurement, reporting to the CFO Eva Kienle. Since joining in late 2018, he is responsible for the Procurement Expert Hubs for Direct and Indirect Material and Investment & Technical Procurement. Prior to joining KWS, Peter worked at Akelius Residential where he also built up the central procurement function. Before Akelius, he worked in various industries, each time related to procurement but also to the production environment. Peter earned a Master of Engineering degree in Industrial Engineering from Rostock University. www.k ws.c o m/ c or p / en /
12 34 1
REGIONAL MANAGERS THAT NEED TO INCREASE SALES DEPARTMENT HEADS THAT NEED TO REDUCE COSTS
CEO THAT WANTS INSIGHTS INTO TOMORROW
SAP S/4HANA® provides the agility you need in times of great uncertainty, by turning your ERP data into insights with the power of prediction. TOGETHER
WE GOT THIS © 2020 SAP SE or an SAP affiliate company. All rights reserved.
sap.com/s4together
The Spirit of Independence CLICK TO WATCH
|
1:31
T:297 mm
13
“ With purchasing, if you have one unified way of doing things then it allows you to think about automation” — Peter Hagenow, Head of Strategic Procurement, KWS
to try and reassure people when it comes to digitalisation and help make them understand that there is no danger to new technologies.” Having partnered with SAP for a number of years, Hagenow understands the importance of key, strategic collaborations to success. “In the beginning, Maik and I needed
The larger the company, the more com-
to connect to the business so that
plex it gets to drive digitalisation and
we could build the procurement func-
we have to remember that we’re not
tion. Our company has used SAP for
a small company anymore. It’s vital to
decades so we were reaching out to
sell your idea and convince people that
them to search for the right tool for
it’s for the best. I believe it’s important
us,” he says. “One of the best things www.k ws.c o m/ c or p / en /
KWS
14
AMAZ ON B U SI NE SS Hagenow believes that his company’s relationship with Amazon Business has been a key component to success. “In terms of COVID-19, it has been very helpful for us that we had partnered up with Amazon Business at an earlier stage of our journey,” he says. “Our requestors were already used to kind of online shop the day to day requirements online since we introduced the Amazon portal. This is a big plus when you’re suddenly connected to your company through the internet.”
“A big advantage in the international context is that we have been able to introduce Amazon business and the possibility of restricting the access to certain product categories. Soon we will be managing the tail end spend through Amazon in 17 countries with a one-creditor approach, but we are also looking to integrate other partners with their pre-negotiated assortment of goods to the portal.”
www.k ws.c o m/ c or p / en /
15
KWS
16
“ I believe it’s important to try and reassure people when it comes to digitalisation and help make them understand that there is no danger to new technologies” — Peter Hagenow, Head of Strategic Procurement, KWS
about working with SAP is that when we have a certain development need, they always listen and try to build our requirements into the products over time. They’re a big reason why after our five year transformation journey, we will almost have a fully digitalised purchasing experience.” Looking to the future, Hagenow believes that digitalisation will only become more influential and prominent in the supply chain industry. “I think we will see even more
17
digitalisation, not just at KWS but also
“We’ve started introducing bots and are
the sector itself,” he affirms. “I believe
looking at our operational purchases of
that strategic procurement will transi-
today and reviewing what their role will
tion from the pure negotiation of finding
be tomorrow,” he explains. “All of our
other added value and move towards
employees in Berlin that are working in
common development with suppliers.
our transaction centre are multilingual
There will be lots
so we’re trying to get connected to all
of new technology implemented that
of our countries. We must take care of
will allow us to manage our day in
the workforce of today to ensure they’re
a quicker and more efficient way and
equipped with everything they need to
the future is bright.” Hagenow adds
succeed for tomorrow.”
that the development of the workforce is essential to long-term success. www.k ws.c o m/ c or p / en /
KWS GRIMSEHLSTRASSE 31 EINBECK GERMANY T +0 55 61/ 31 10
www.kws.com/corp/en/
P0WERED BY