A procurement function can be defined by two key components: the customer and the supplier. How an organisation, through its procurement process, engages and works with those two factors is crucial.
The procurement industry is transforming as more and more organisations begin to recognise that what has been historically seen as a support function is now becoming far more aligned to the core business strategy, enabling growth through efficiencies and innovation. However, Uniper, a leading international energy company, realized this at a very early stage and has already prepared for the future by implementing a large-scale transformation of its procurement and supply chain process.
Ultimately, procurement is about engagement with the suppliers and engagement with the customers or end users in order to deliver the best possible service to both parties. Uniper, tackled the challenge by asking one simple question: what is it that suppliers and customers really want?
“Ultimately, customers want speedy execution and seamless interaction,” says Susanne Thöle, Director of Procurement, Spot Buy and Indirect, for Uniper. “The way we achieve that is through understanding the market and identifying opportunities to enable cost savings, or technologies that can accelerate that. We then look at our engagement with existing suppliers and how we approach new suppliers.”
This journey started back in 2016 with Uniper looking at how it can create far greater supplier relationship management, incentivising suppliers to unlock more value and potential within those relationships.
For Thöle, this starts from within and Uniper develops their Operational Excellence capabilities to challenge the status quo, to look at the company’s workforce and continuously strive for ways to improve and approach new or existing challenges with fresh ideas and more innovative approaches.
“We attend bootcamps, workshops and training talks to ultimately find easier, better solutions to reduce complexity. The idea was to exercise methodologies that we had learned previously to solve issues in our day-to-day business,” Thöle says.
“For me, it’s been a real game changer as it has helped foster a culture of unconventional thinking, bringing fresh and innovative ideas to the business. We are looking at where we are as a function in the business, challenging the status quo and finding new pragmatism.”
Ultimately, the Operational Excellence project epitomises the entire transformation and growth journey of Uniper’s procurement as it answers a demand identified by Thöle. As an international company, serving customers all around the world, Uniper needs to have a level of proactivity, reactivity and, most importantly, flexibility.
Thöle believes that by continuously supporting staff in developing their talents and skills through targeted KPIs, personal development strategies and of course by valuing their staff and their capabilities, Uniper possesses a workforce that is extremely focused and knowledgeable.
“Growing and empowering my team is my focus here. Backing up the decisions of my colleagues and providing flexibility in the daily work are important cornerstones of providing a work environment that motivates my team to strive for success. We have developed a very solid framework to challenge our employees and enable their development so that they can understand exactly what their strengths are and where they can continue to push their capabilities,” she says. “What it also does is help us concentrate on the things that matter. We can focus on areas of improvement or development that will drive true value. We put our staff on a path where they get the right insight and the perfect training to take into supplier engagements and bring back innovations and learnings into our business.”
Another important aspect of striving for excellence with a team is the appreciation of diversity Thöle thinks.
“At Uniper we drive a diversity initiative that puts emphasis on the opportunities that pluralities bring which I highly support. I see a big value in a diverse workforce and also in an inclusive culture, because obviously: the happier our people feel in their teams, the more value they are able to bring to Uniper.
Part of the development plan, and a cornerstone of the company’s transformation, is digitisation and technology. Technology is redefining industry sectors all over the world, with more and more businesses investing heavily into technology to embrace the digitally enabled customer and marketplace.
Uniper’s approach to continuously developing its workforce extends into the digitisation sphere and Philip Höchstödter, VP Spot Buy/Operational Procurement, has experienced first-hand the need to adapt to technology and to bring a new innovative approach to the business.
“When looking to implement technologies like Robotic Process Automation (RPA), naturally it is met with some scepticism because people feel their role or their work is becoming redundant,” he says. “What we learned very quickly was that if we applied new technologies to repetitive and somehow boring tasks, those fears were allayed and actually people started appreciating and embracing new technologies, because it makes their lives easier.”
“Soon we were receiving so many ideas and ways that people felt we could continue to push further that we had to use a proper assessment framework provided by our IT colleagues to ensure the right prioritization. Today our virtual workforce consisting of robots and a chatbot supported by A.I. is a well perceived standard and a fully integrated part of our processes. These technologies among others have enabled us and our staff to focus on higher value tasks,” Höchstödter says.
Another key way in which Uniper is embracing technology is through data management which in turn allows the company to better serve its customer base. Through its very nature, the procurement function needs to know and understand the demand, the market and the suppliers to deliver insights to the business and capitalise on the market.
Höchstödter points out that the procurement team has to accurately capture supplier data, contract data, material master data and operational process data, but more importantly the company has to be able to extract value from it, because all future analysis and development strategies within procurement are built from this data.
Working in an integrated environment is key to enable these activities. So, in addition Uniper decided to renew their Procurement platform to SAP ARIBA until the end of 2018 to create a new and user-friendly experience for their requesters, their suppliers and their purchasers. This will reduce the administrative effort and workload considerably. In parallel SAP Fieldglass has been implemented as a contingency workforce solution, which provides additional process stability.
“Our systems like SAP ARIBA or SAP Fieldglass, our chatbot and our ACD solution provide us with incredible amounts of operational data,” says Höchstödter. “When communicating with our requesters or a supplier, we pool the information we receive and can now use that information to target the key areas where we can develop and we can do it far quicker and more effective than ever before.”
As a procurement function, Susanne Thöle recognises that it can only be successful and can only achieve any real growth with a strong network of suppliers and key partners like SAP. “Procurement is a strategic function and, simply put, we’re trying to improve the profitability of the company, so our key to this is our supplier relationship management,” she says.
“We are very clear on who our strategic partners are, how we identify them, and that we really put effort into developing these relationships and grow the business together.”
Having started this transformational journey back in 2016, after the split from German energy provider E.ON, Uniper can already point to considerable successes and cost efficiencies that represent the company and its procurement heading in the right direction.
Eyes inevitably turn to the future: with technological advancements and an ever-changing market and customer demands, procurement will continue to evolve further and Uniper will stay agile to be ready for the challenges of tomorrow so it can keep shaping the energy world.
For Thöle though, the future challenges will be tackled by greater collaboration with the customers and the suppliers of today. “Procurement has brought and will continue to bring innovation, new solutions and cost savings and efficiencies to Uniper,” she says.
“And we will continue to work with our supplier base and our customer base and use that knowledge to help solve the questions of the future.”