Emarticon Project Examples
Cost reduction / cost efficiency
"Profit is a question of purchasing," says the merchant - and "every Euro saved is a Euro profit".
In fact, in many companies there is great potential in procurement. However, it is often not easy to leverage this potential without affecting the added value, sales or quality of products and services.
That is why we at Emarticon prefer to speak of cost efficiency rather than just reducing costs. Cost efficiency is much more than just reducing costs. Cost efficiency means getting the right product or service for the long-term most competitive price. This will reduce costs in the long term while increasing competitiveness. To achieve this, we have the right approach, we have the right understanding of our clients' organization and, above all, we have the appropriate implementation experience.
Project example: Cost reduction & cost efficiency for an international group of companies in IT
We have built up the strategic procurement function for an international group of 60 companies. The client operates in Europe, India, the Middle East and North and Central America. We then took over the management of the procuremennt function as interim manager for a period of 12 months.
The focus of our activities was on achieving high cost efficiency in the material groups IT hardware, IT services, travel services, telecommunications, company vehicles and energy. Part of the task was to carry out post-merger integration for the group of companies.
Cost reduction achieved: 25%
A procurement strategy can only be successful if it takes into account the special circumstances of the client and the market. Strategies should therefore be checked regularly and adjusted if necessary.
Project example: Development and implementation of a new procurement strategy for a medium-sized manufacturer of medical technology
For a medium-sized manufacturer of medical technology, there were significant problems in the supply reliability of electronic components and in the heavy dependency on a few suppliers. Supply relationships had grown historically and were not regularly checked and optimized.
We developed a multi-source strategy as a consultant in selected material groups and then implemented it as interim manager. The particular complexity of this project was, on the one hand, the enormous longevity of the products and, on the other hand, the high quality and regulatory requirements.
Project result achieved: Significantly increased reliability of supply and, in parallel, a cost reduction of 20%
Sustainability in procurement
Sustainability in procurement means that procurement goes beyond monetary goals and is based on the criteria of preserving our environment and observing the rights of everyone involved in the supply chain. For many companies, the focus of the considerations is not only responsibility, but also regulatory requirements and, last but not least, active risk management.
Project example: Review and optimisation of the sustainability strategy for a German chemical company
For a German chemical company, we looked at the risk factors in the supply chain with regard to sustainability. At the heart of the considerations, based on the National Action Plan of the Federal Government of Germany, were the risks for the company stemming from dangers in the workplace of employees at suppliers as well as legal and publicity risks given the employees’ rights. Our task was to assess the feasibility of risk mitigating actions that had already been identified.
Project result: Achieving better risk management for sustainable business
Reorganization places particularly high requirements on a project. On the one hand, it is always about what drives people, namely the content and therefore the meaning of people’s work. In this regard every change is closely linked to fears. On the other hand, reorganisations are often under great pressure to succeed and to do this on time with a tough schedule. The art of a successful reorganisation project is to take both into account.
Project example: Development of the procurement function as a key lever in the company turn-around
As part of a corporate reorganisation, our task was to set up central procurement function including cost management. The goals of the new organisation were a) the reduction of total costs in terms of total cost of ownership and b) the establishment of target cost management processes. As part of the project, we introduced a global cloud-based e-procurement system & portal and carried out extensive business process outsourcing.
Basis for the project was the Emarticon® Functional Strategy approach.
Outstanding achievement: cost reduction € 25 million p.a.
Efficient and reliable processes are the basis of a successful organisation. For the implementation of such processes, the management of the employees via IT systems is essential. However, when implementing and using processes and systems, many companies overlook to align processes and objectives of the organisation and the employees.
Project example: Improving procurement for a consumer electronics manufacturer
Our task consisted in analysing the competitive situation after a company carve-out and building on this in the development of cost-cutting measures. As a result, a major focus of our work was to optimize corporate processes, in particular the integration of product development, supply chain and purchasing. A major challenge was the low accuracy of the demand forecast, which regularly led to high air freight and disposal costs. As the source of this, we were able to identify and eliminate conflicting objectives within the organisation.
Cost reduction achieved: 12% (TCO)
To remain competitive, your success factors such as product innovation, quality, service or reliability of supply must also be ensured by your suppliers. It is important to intensify the cooperation with exactly the right partners. Therefore, supplier management should be understood as a strategic process in your company. The starting point should be extensive analyses of the supplier. Building on this, targeted supplier integration and supplier development can take place.
Project example: Development of the supplier partner program for Siemens
For the electronics group Siemens, our task was to further develop the existing supplier management with the aim of placing a stronger focus on further development. This enables a close link between supplier and customer to be achieved, which is especially necessary for the provision of high technology.
The concept developed by us and subsequently introduced for the respective Siemens division was structured along the client’s key topics such as quality, SCM, development know-how, etc. In each of these areas, in addition to the supplier evaluation, responsible employees were defined. The Emarticon® Supplier Management Programme served as a blueprint for the project.
Project result achieved: New technologies could be made available more quickly and with significantly lower risk.
Many companies find it difficult to build and maintain a truly optimized supply chain. This is because a large number of both external factors and internal constraints come into play here. The availability of components on the world market or the sales and thus the demand of the own company often fluctuate. The optimisation is therefore always situational. However, there are general control mechanisms and key performance indicators (KPI) such as days-of-inventory or transport costs as a percentage of the cost of goods sold, which can be taken as clear indicators for the need for action. We support you in defining and establishing the processes and systems to measure and track such KPI efficiently and to react accordingly. This enables you to improve and continuouly maintain your supply chain.
Project example: Supply chain optimisation for a leading electronics manufacturer
Our task was to simultaneously reduce excess stocks and to increase reliability of supply in the long term. The main problem for our client was the very low transparency of both the demand as well as the inventory of the individual components and assemblies. The particular complexity lay in the distribution of individual components and assemblies between the international production locations, the ability to plan identical parts and the high number of levels over which a device had to be resolved in order to regularly measure the number of assemblies required.
As a solution, we created a component radar together with the customer and introduced it together with a stringent rolling order forecast.
Project result: The required transparency of the storage range of components and assemblies was achieved the stock levels could be lowered without jeopardising supply, and hence, the required working capital was reduced. In summary, improving the planning, the total costs were significantly reduced. We call this Strategic Cost Reduction and we have our own approach for this.
Global procurement markets are subject to constant change. This results in opportunities and risks for all companies that are not limited to local procurement and sales markets - in an ongoing sequence and with extreme effects. The corona crisis is a prime example of this.
Not only the correct selection of procurement markets and channels, but also the associated global sourcing management is therefore a dominant success factor. The implementation of a successful global sourcing strategy lowers costs on the one hand. On the other hand, it ensures that supply risks are minimized. We support you in overcoming these challenges.
Project example: Auditing and selecting ODM / OEM high-technology suppliers in Asia
For a global technology leader, we took on the task of finding new suppliers for high-tech communication modules that can be delivered at very low costs. We audited about 10 companies as potential candidates in Korea, Taiwan and Japan. We then analyzed these vendors and selected two long-term strategic suppliers.
Outstanding achievement: The project gave our customer access to new technologies at low costs and low risk.
Success and failure in IT sourcing crucially depend on the management of the contractually regulated business relationship and thus on contract negotiation and contract management.
This is where Emarticon® Efficient IT sourcing comes in. Based on four essential principles, our approach changes dysfunctional IT outsourcing contracts into successful and cost-effective collaborations.
Project example: Negotiation and implementation of intelligent IT contracts in a large bank
We took over the negotiation of our client with large IT service providers in the area of mainframe computers, server, network administration and end customer user computing. By changing the contractual metrics (KPI) along the lines of the Emarticon® Efficient IT-Sourcing Concept, we achieve significant savings. The key change we implemented was the measurement of performance based on the generated value for the client company.
Outstanding achievement: cost reduction by € 10 million over the course of three contractual years
Outsourcing / insourcing
Outsourcing is a very appropriate way to lower costs. Tasks that are not in the core competence of a company are transferred to a specialized outsourcing service provider. However, special risks arise in particular if the tasks assigned are nevertheless essential for product quality or customer perception. In case of insourcing, similar challenges and risks arise with regard to task definition and the respecitve transfer and operations management and contractual regulation.
Outsourcing and insourcing require intelligent and efficient concepts to minimize these risks. We help you to develop and implement these concepts. This task starts with the right make-buy decision.
Project example: Management of near-shoring and off-shoring for a leading European transportation company
The challenge for our client was to efficiently lead IT projects to success with more than a thousand team members and several participating outsourcing companies. The project participants were active in Germany, Eastern Europe and India.
We have developed a new, intelligent control concept for this, which is based on an external trusted adviser and which has become an essential component of project management.
A particular success: Significant reduction in standard throughput times and increased planning reliability
In the past fifteen years, e-procurement has become a basic requirement for state-of-the-art procurement in most industries. In many companies, however, the role of the underlying procurement and approval processes is underestimated. Historically grown processes are often not questioned and processes are transferred to new systems without major changes. In addition, process digitization is often driven heavily by the respective software provider. As a result, the processes are often not sufficiently flexible, too slow in critical cases and the reporting is confusing and not effective.
Thus, often procurement processes become inefficient despite modern systems being used. We help you check and optimise your procurement in this regard.
Project example: Customised introduction of electronic procurement
For an international company with a procurement volume of approx. € 350 million, we first examined the status of the purchasing processes and then simplified them. In the next step, we found a suitable SAAS provider for a cloud-based e-procurement solution together with the customer and negotiated a contract. Finally, the system was adapted and implemented for the customer under our leadership. Complete access via smartphones was ensured.
Outstanding achievement: Significant acceleration and transparency of the procurement processes
Industrie 4.0 / procurement 4.0
For us, Procurement 4.0 stands for the increased digitisation of procurement processes by means of comprehensive end-to-end integration without media breaks and for the possibilities of cross-company networking along the supply chain. E-procurement is the prerequisite for this. Procurement 4.0 is the expansion of E-Procurement both within a company, namely by connecting different corporate functions, and outside through networking with suppliers and customers - i.e. along the entire value chain.
Companies are successful if, in addition to process management, data management is set up in such a way that it can be flexibly expanded in the long-run. With our experience from projects in different industries, we help you to identify and eliminate pitfalls.
Project example: Integrated process automation
For a leading global manufacturer of telecommunications infrastructure, we have analysed the possibilities of integrated process automation. Our task was to show a system landscape with which a fully electronic process chain can be built. Procurement, supply chain, product definition & development, manufacturing and sales had to be integrated into the solution.
Outstanding achievement: Our solution was a very low-risk approach that achieved a significant leap in innovation through series of individual pilot projects.
Artificial intelligence (AI) is about to change our lives and our industrial landscape. Tasks that until recently could only be performed by experts, such as the analysis of X-ray images are at least increasingly being supported very efficiently by machines and will be taken over entirely in many areas in the future. Companies in all industries are therefore faced with the challenge of having to adapt accordingly to this change and to use the advantages of this development adequately.
Application example: AI-based procurement market analysis
In procurement, the area of market analysis is currently in the foreground when using AI. The intelligent collection and processing of large amounts of data about vendors and their products and services helps companies to recognize opportunities and risks.
Emarticon has particular expertise in this area, since we dealt with AI and its use very early on. Our employees have experience in the use of AI machines and have tested them. For test purposes, we also developed our own inference engines in Lisp based on fuzzy logic.
We have a very good market overview of suppliers of solution parts and can support you in identifying opportunities for your company and in finding, assembling and implementing the right solution.
Emarticon GmbH is currently collaborating with the Institute for Compliance & Corporate Governance at the Rheinische Fachhochschule Köln gGmbH / University of Applied Sciences on a research project to use AI in procurement.
As interim manager, Emarticon offers you the solution when special skills in the area of strategic procurement and supply management are required for a limited time. We are experienced experts for exceptional corporate situations.
Our management approach is respectful and pragmatic even in difficult situations. We have the right inner attitude, equally appropriate for your employees and customers even in difficult situations, i.e. to act both humanly fair and persistent in pursuing the goal at the same time.
We see ourselves as real team players, because the respectful handling of arguments and counter-arguments brings the best solution. And we believe that honesty also make us very pragmatic.
Project example interim management: Clemens Rinnebach had taken on the task of completely rebuilding strategic procurement and cost management for the turn-around and restructuring of the HypoRealEstate. Part of the task was to lead, develop and build up the existing team in procurement. First, he redefined the direction and toolset of the corporate function in coordination with the Executive Board. Afterwards, the challenges of the task were to establish new procurement and controlling processes and to find and hire new employees. Clemens Rinnebach led the department beyond the successful spin-off of the healthy core bank.
The project was particularly successful because the individual personalities of the employees was dealt with were taken into account.
Project management / leading projects is dominated in many companies by the corresponding methods and tools, which are rightly an important basis. However, the success of difficult projects does not depend on the choice of the right project management software, but on understanding complex situations, comparing conflicting objectives, identifying critical situations in good time and quickly finding solutions together.
The consultants and managers of Emarticon GmbH not only have the necessary professional competence, but also a very extensive project management experience build up over many years. Also, we have the right consulting and management approach.
Project example: For Siemens AG, we had taken on the task of optimising indirect procurement of a large business unit. The project included over 45 project participants. The aim was to define improvement measures together with the managers along 10 excellence topics and to implement them in the current financial year. This was successful because we recognized early on which measures needed direct support and which did not. In addition, thanks to the Emarticon® high-achievement sourcing concept, we were able to access a ready-made tool case.
Contracts are the linchpin of external business relationships. Successful negotiations are the basis of these contracts. However, many companies and purchasing managers underestimate the complexity of large negotiations and the value and scope of good preparation.
We regard every negotiation as a project that can be successfully achieved along a few, but in some cases complex, dimensions. Such a dimension is, for example, an exact, coordinated target definition. Another is the broadest possible definition of alternative courses of action.
With our professional negotiator's tools and our experience, we help you to achieve your negotiation goal as precisely as possible and efficiently and within the required time frame.
Project example negotiation management: As an interim manager for a large German insurance group, we took over the contract negotiations for two large software contracts. The negotiated contract volumes were in some cases well over € 20 million. Thanks to good negotiation and project management, we managed to achieve significant savings in this task.