Case Study Salzgitter
Goodbye to paper and faxes in the tendering process
Wiesbaden, April 2008
The purchases of Salzgitter Flachstahl GmbH range from coffee cups to spare parts
and from services to blast furnaces. The volume sums up to approximately
185,000 items with a value of about EUR 1.8 billion a year. The steel producer
has chosen the eSourcing platform myFutura by Futura Solutions to assist its employees
and to optimise the extensive bidding process electronically.
"Bearing in mind a certain process pressure, we took our decision in
favour of the eSourcing platform myFutura as a tendering system - to cope with
the growing demands on purchasing and the challenges that result from it",
says Axel Kresse, project manager for the implementation of myFutura at
Salzgitter Flachstahl, about the beginnings. The procurement processes became
more complex and the market requirements on purchasing more demanding. Kresse:
"We had to find an instrument to facilitate the sourcing process."
The requirement was to implement an IT solution capable of being integrated
into existing processes and their mapping in the SAP environment.
Spare parts according to drawings
At Salzgitter, steel is produced in five shifts all around the clock, including
Christmas and New Year´s Eve. A potential disturbance would cost the company a
lot of money. "To minimise possible downtime, the crucial system
components are on stock as spare parts", says Kresse. Therefore,
requirements on procurement at the sixth largest European steel producer are
high; it is always important to obtain many different spare parts for the machinery.
The most expensive option is to buy it without competition from the
manufacturer of the equipment. But whoever has the rights to the drawings, which
usually has itself, can produce the necessary spare parts individually. These
parts are tendered on myFutura. Kresse: "It’s a very complex process because
you have to enclose the drawings." So far, it is partially completed
electronically. Kresse: "In the final stage of the roll-out of myFutura we
are planning to combine the drawing archive with the R/3 System and myFutura
and to transfer it automatically to the internet platform."
"These days it’s all about improving the tendering process, the so-called
sourcing process, and continuing to optimise it."
Axel Kresse, Project Manager for the implementation of the eSourcing platform
myFutura at Salzgitter Flachstahl GmbH
Material and Services
The eSourcing platform myFutura does not only handle the procurement of
materials and spare parts: "We started off with materials from the system
and created an interface between R/3 and myFutura", says the project
manager. The interface works also in the opposite direction.
Since myFutura serves to tender complex services at Salzgitter Flachstahl, the
project manager illustrates another 'highlight'. Kresse: "We currently
tender the third major service or rather construction work tender with
myFutura, a feature that not every system can handle with ease."
Complete SAP process integration
At Salzgitter Flachstahl the ERP system SAP R/3 and the eSourcing platform
myFutura work hand in hand by the way of an integrated interface. Kresse states
that "SAP alone does not offer us the functionalities that we have gained
from using the eSourcing platform myFutura" whilst thinking of the not too
distant times of fax and mail. For the steel producer, it is crucial that all data
input from the eSourcing platform can be transferred without problems into the business
processes of SAP R/3. Salzgitter
will go on to tender primarily by the way of the R/3 system, but now completed
by the eSourcing platform myFutura. Kresse: "All companies that we invite
to tender can make their entries there and submit their offer."
On the right track
After six months in operation, project manager Axel Kresse considers Salzgitter
Flachstahl on the right track with an established combination of the eSourcing
platform myFutura as tendering system and SAP R/3 as ERP system. Some
suppliers still need to be convinced, though, to participate in technical
progress and to dispense with the usual letter or fax. Futura Solutions
specialises in powerful, integrated solutions in the fields of procurement,
planning and maintenance. The Wiesbaden-based company was founded in 1997 and
has many years of experience in the SAP environment. The eSourcing platform myFutura
was launched in 2000 and is used by major companies such as BASF, Bayer, Henkel
Salzgitter Flachstahl GmbH is a 100 percent subsidiary of the steel division of
Salzgitter AG and employs about 4,500 people. The integrated steel mill with
three modern blast furnaces has full vertical integration, from the production
of pig iron to the rolled products. Salzgitter Flachstahl GmbH is a premium supplier
of several major car manufacturers and cost leader for iron and steel in Europe.
The SAP R/3 system alone classically generates a piece of paper for the
tendering process. This is sent or faxed and you would receive a letter back. This
data must be entered again in the classic system. This old process was reorganised
completely at Salzgitter Flachstahl using the eSourcing platform myFutura.
In 2005, Salzgitter Flachstahl GmbH decided to use the eSourcing platform myFutura
as a tendering system. The system supports the steel company in all stages of efficient
handling of the sourcing process. The procurement of services is carried out by
the system - without any boundaries. At Salzgitter Flachstahl, the eSourcing
platform myFutura is closely integrated into the processes of the SAP
environment, but can also be used stand-alone.
Flachstahl, tenders are distributed for suppliers on the internet using the
eSourcing platform myFutura. Companies receive an invitation by e-mail to
participate in a tender. The credentials can be accessed via a link. That way, suppliers
log on directly to a current bid to enter their data and prices.