Rethinking procurement

Procurement has a key role in modern companies. External suppliers account for around three quarters of a company's value creation. Millions of parts travel the globe nonstop, only to flow just-in-time into production and external services are increasing. At the same time, costs in this complex system must be optimized while environmental and social standards have reached the next level.

H&Z in der Einkaufsunternehmensberatung

A new purpose for procurement

The growing importance of procurement requires far reaching changes. Negotiating and managing costs are no longer enough. You need to actively shape the environment, search for innovations and implement digital solutions.

Suppliers are becoming partners, cost awareness is complemented by value generation, resilience and sustainability become the driving forces. We support companies that are ready to rethink procurement with the following offers.

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Sustainable transformation in companies

Environment, Society and Governance (ESG) - are the three pillars of sustainability. 
Already today companies are measured against these metrics. Not only competitors adhere to these new standards – but they are also becoming increasingly important for Investor’s decisions. Expectations and regulative pressure are increasing in all industries forcing companies to adapt to new metrics and requirements.

Sustainable action is the prerequisite in order to stay ahead of the curve. Reputational damage or fines are imminent if companies disregard laws and regulations. The public and legislators are increasingly holding companies accountable. The Supply Chain Act is one of the legal regulations designed to strengthen compliance with due diligence requirements in the value chain. Organizations that are solely driven by these external factors are perceived as reactive. Companies that see sustainability as an opportunity however and pro-actively address environmental, social and economic factors are more attractive to customers and investors - who are increasingly critical in their decision-making.

What is needed is a sustainable transformation of companies. Together with our clients, we determine the level of ambition and a target picture. We use this to develop a sustainability strategy.


Sustainability - building a responsible supply chain

Purchasing plays a key role when anchoring sustainable action in the company and the supply chain. Besides the challenge to create stable and resilient supply chains, purchasing is asked to make its contribution to sustainability. This ranges from CO2 reduction across all commodity groups and the supplier portfolio to business partner selection within the value chain.


Calculating the CO2 footprint along the value chain

Sustainability aspects are increasingly integrated into the supplier selection processes as criteria besides traditional ones such as price and quality. This includes a detailed CO2 calculation for products and services along the value chain. In "Green Lever Workshops", we work with our customers to develop ideas and measures for optimizing sustainability criteria in the supply chain, for example CO2 footprint optimization.
Sustainable action needs to be embedded in all corporate functions – from research & development to purchasing, production, supply chain, marketing and finance. That's why our projects involve key decision makers to ensure that sustainability is broadly anchored in the company.

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Digital Transformation for Procurement

Many companies share the same concern: they want to digitally transform their procurement to effectively achieve business goals. Digital transformation is more than just selecting a software solution and going live. What does digitalization really mean? What is the target setup? How and where do you have to start? Where is the added value for the company? We accompany organisations from digital strategy to system implementation with IT and procurement expertise and our understanding of sustainable transformation.

Digital strategy and roadmap for procurement

Should procurement processes be digitized end-to-end or only optimized at certain points? Which applications are needed? What is the existing system landscape? How are the roles and skills of buyers changing? These are typical questions that we answer together with our customers based on our years of expertise. We not only create more certainty but also provide our customers with additional arguments to obtain the financial means to further implement a digitization roadmap.

Specification and selection of procurement software

What are the key pain points? Which business goals should be better achieved with it? We use design thinking and agile methods to clarify the specific requirements for potential software. We incorporate a procurement perspective, but also from an IT perspective. We bring the requirements into a structure, so that these can not only be used for a tender, but their realization can be tracked up to the implementation.
In the next step, we investigate which software providers on the market can cover your requirements. In doing so, we ensure a neutral system selection. Our selection process follows a 360° logic. We provide support during the tendering process up to the negotiation of the contract with the software provider.

Procurement software implementation

Together with our subsidiary aneon we accompany and control the software implementation worldwide. We have traditional and agile implementation methods at our disposal. Especially during implementation, it is very important to understand the customer's requirements exactly. As H&Z we see ourselves as a challenger to optimize the different processes and commodity groups before they are implemented.

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Value Creation - our approach to cost reduction in procurement

Our approach to cost reduction is a 360° view of your company's procurement volume. Our experienced consultants screen the most important commodity groups for short-, medium- and long-term savings potentials. When creating your individual value creation plan, we incorporate many years of experience from our consulting projects and the industry perspective of our consultants. We deliberately go beyond the boundaries of the procurement organization and always take a product view in addition to a commodity group view - here we benefit from extensive know-how in H&Z Cost-Value-Engineering.

Fast cost reduction with head, heart and hand approach

In situations with high cost pressure, it is necessary to reduce external expenses in the very short term in order to generate an immediate positive bottom-line impact. We focus on your existing suppliers and use benchmarks as well as fast applicable analysis methods like Linear Performance Pricing (LPP) or our cost calculation solution to prepare renegotiations with suppliers. In addition to fact-based arguments, our negotiation experts use game-theoretical elements to develop the negotiation strategy. Tightly scheduled H&Z Supplier Days, a standardized approach by H&Z, are very well suited for the quick realization of savings. Our experts provide support until the successful execution of the negotiations.

Holistic Value Creation Plan

The main result of our cost-out projects is often documented in a holistic Value Creation Plan (VCP). This includes future product group strategies as well as specific optimization ideas and the new way of (cross-functional) cooperation for a sustainable successful implementation. Our clients benefit from our extensive expertise, which spans numerous industries and commodity groups in direct and indirect materials. We support companies in the creation and implementation of the VCP. From the initial data analysis of the procurement volume, through cross-functional leverage workshops, to the identification of alternative suppliers and the commercial negotiations based on a coordinated negotiation strategy. This process, which often takes several months, is supported by our professional project management, a control tower and specially developed software solutions for implementing measures.

CVE as a lever for cross-functional cost reduction and product optimization

With our Cost-Value-Engineering (CVE) method we get to the bottom of product costs in direct material. We put the product (often even physically by means of reverse engineering) on the table and examine it in all its individual parts from a functional, commercial and technical point of view. If it turns out that technical solutions are too expensive or have been developed past the customer's benefit, we introduce alternative proposals. The modified product therefore does not have less customer benefit. On the contrary. In many cases, it meets the needs of the market more than before.


Transformation of the procurement organization

Megatrends like globalization, sustainability and digitalization are driving the further development of procurement. But other influencing factors such as growth, corporate acquisitions or mergers can also be the reason to realign the procurement function. Regardless of the motive, the experts at H&Z support the transformation in procurement with instruments that are individually tailored to the goals of the company and address the challenges of the present.

Analysing procurement processes and procurement strategy

Our procurement performance analysis is the starting point for reorganizing a procurement organization. Starting with a review of the strategy, we then examine all areas of procurement and provide a qualified assessment. Is the organization efficient? Is it well integrated into the company's processes? How well does procurement use the opportunities of digitalization? A final assessment reveals the maturity level and shows the potential for optimization.

Shaping the transformation of procurement

The transformation of procurement must be supported by all team members. It is not always just about strategic issues. Sometimes, management already knows exactly how procurement should be positioned in the future. However, there may be uncertainty about how to achieve the desired goals. We accompany companies on this path analytically and pragmatically. In doing so, we follow the plans of the management just as closely as the needs and interests of the employees.

Our Experts for Procurement

Ralf Schulz


Harald Enz

Harald Enz - Experte für Einkaufsthemen bei H&Z