Groupe ADF: Enhancing power by new purchasing organization
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„By ARAIA we have changed our purchasing structure within our company. Our team was convinced by the distinct know-how in purchasing and consistent assignment during the whole project. Organization as well as optimization potentials in purchasing costs made it possible to realize our target. Marc Eliayan, CEO ADF |
- The challenge
ADF is a spin-off of a big energy company. In 2007, ADF was founded as LMBO (Leveraged Management-Buy-Out). Being an independent company the ADF management decided to effect an optimization in organization and purchasing.
The geographical structure of ADF is particular. Clients of ADF are not regional. For this reason ADF operates from different locations as well. Due to splitting and incorporations of companies the purchasing organization mixed up and became unequal.
The purchasing organization was centralized for general purchasing, for direct purchasing it was decentralized in order to create competitive capacity for negotiations worldwide.
The target was to implement a central purchasing organization, independent from operational processes without disturbing transfer and local involvement. The general needs were aligned in order to optimize the purchasing costs. Therefore, the lever „negotiation“ could be better implemented at commodity groups and suppliers.
- The solution
After a first diagnostic phase the project was divided up into two parts being realized during the same time:
- Organization and purchasing processes: By means of the ARAIA APOS tool a purchasing organization was defined being adapted to the development strategy of ADF. The ARAIA team also created a globalized purchasing strategy, comprehensive processes and a clear role and task definition for purchasing and related departments of the company.
- Cost optimization of procurement, material and consumer goods: By means of the ARAIA tools the following could be realized:
- Separation of basic commodity groups,
- Analysis of older data,
- Restructuring of commodity groups depending on its proportion in order to create competitiveness on the supplier markets,
- Long-term access to new markets by means of standardized reference catalogues and a competitive takeover of specialized articles
- The result
The new purchasing organization contents two basic aspects:
- A common purchasing strategy, common supplier and commodity policy
- Creation of new positions in order to commercialize negotiations (together with the central purchasing department purchasers on-site negotiate conditions being relevant to the site)
In order to create such a new organization, a new purchasing information system was implemented. The system administrates negotiation catalogues, matches orders to articles, shows receipt and invoicing that led to a higher transparency and to an improvement of purchasing activities.
The optimization of the purchasing costs was particularly visible at procurement, material and consumer goods. This group was split up into 4 equal subgroups. Every subgroup was negotiated with a limited amount at national, highly presented corporate groups. The number of suppliers changed from more than 830 to less than 50. The suppliers also took the following ADF conditions:
- local services for ADF
- an optimized administration of the supplier portfolio as well as
- extremely competitive purchasing conditions.
