De­prec­ated element
MAHLE cent­ral­ises
the Pur­chas­ing
Con­tract Man­age­ment

Global cor­por­a­tion op­tim­ises pur­chas­ing with digital con­tract man­age­ment

MAHLE is a leading in­ter­na­tion­al de­vel­op­ment partner and sup­pli­er for the auto­mot­ive in­dustry. More than 72,000 em­ploy­ees develop and produce at around 160 loc­a­tions on five con­tin­ents. The large order volumes that the pro­cure­ment de­part­ment awards to sup­pli­ers gen­er­ate pur­chas­ing power. MAHLE further ex­pan­ded this stra­tegic ad­vant­age with cent­ral­ised con­tract man­age­ment. The di­git­al­isa­tion partner for the chal­len­ging project: otris soft­ware AG.

The MAHLE Group is divided into various busi­ness units and profit centres. The Group or­gan­ises pro­cure­ment via a central pur­chas­ing de­part­ment and ad­di­tion­ally via de­cent­ral­ised pur­chas­ing de­part­ments, which are main­tained by each busi­ness unit and profit centre. The de­cent­ral­ised or­gan­isa­tion has ad­vant­ages: lean ad­min­is­trat­ive struc­tures are ef­fi­cient and know­ledge of local con­di­tions is a prof­it­able factor in an in­ter­na­tion­ally op­er­at­ing company. At the same time, a de­cent­ral­ised or­gan­isa­tion can lead to in­form­a­tion that is rel­ev­ant for an optimal ne­go­ti­ation result not being avail­able cent­rally.

Provid­ing trans­par­ency
Before the in­tro­duc­tion of the central con­tract man­age­ment plat­form, the in­di­vidu­al pur­chas­ing de­part­ments of the MAHLE sub­si­di­ar­ies managed their con­tract port­fo­lio locally. Ne­go­ti­ated prices, de­liv­ery or payment terms were only avail­able to the other MAHLE com­pan­ies by act­ively sharing the doc­u­ments.

The con­sequence: It was not im­possible for a MAHLE company to ne­go­ti­ate de­liv­ery terms with a sup­pli­er without knowing that another MAHLE company was already a cus­tom­er. However, in order to ne­go­ti­ate optimal con­di­tions, it is helpful if buyers are in­formed about ex­ist­ing con­trac­tu­al re­la­tion­ships as well as ex­ist­ing con­tract con­tents. On the one hand, this in­form­a­tion pre­vents rene­go­ti­ations that could result in less fa­vour­able con­di­tions. On the other hand, there are no blind pay­ments if an ex­ist­ing con­tract content is to be taken over instead of a rene­go­ti­ation.

In order to provide the pur­chas­ing de­part­ments at all loc­a­tions with an optimal in­form­a­tion basis, MAHLE decided to tackle a com­pre­hens­ive project: A central con­tract man­age­ment soft­ware was to gen­er­ate trans­par­ency across the entire group of con­tracts rel­ev­ant to pur­chas­ing.

„Users like the struc­ture and clear layout of the soft­ware.“
Carsten Möbus
Leiter Supply Chain Col­lab­or­a­tion und Prozes­sexzel­lenz bei MAHLE

Making in­form­a­tion useful.
The aim of the project was to lever­age the eco­nom­ic po­ten­tial in­her­ent in re­struc­tur­ing con­tract man­age­ment. After spe­cify­ing the re­quire­ments for the system and an ex­tens­ive search for sup­pli­ers, MAHLE opted for the con­tract man­age­ment soft­ware otris con­tract. A de­cis­ive factor in the de­cision was not least the ad­apt­ab­il­ity of the system. Many in­di­vidu­al ad­apt­a­tions were ne­ces­sary simply because of the size and di­versity of the group.

Im­ple­ment­ing cus­tom­isa­tions.
An ex­tens­ive con­fig­ur­a­tion that otris con­sult­ing im­ple­men­ted was the ex­pan­sion of the search and sorting func­tions: The system now auto­mat­ic­ally gen­er­ates ad­di­tion­al cri­ter­ia when a con­tract is created, which help the user with the search. Example: A new supply con­tract for a certain product group is created in the system. The con­tract partner is the main plant in Stut­tgart. The con­tract is then found under the su­per­or­din­ate re­gion­al des­ig­na­tion (i.e. Germany or Europe) as well as under the su­per­or­din­ate product cat­egory. The special search func­tions make it easy for the user to conduct an exact search for all ex­ist­ing con­tracts that could be rel­ev­ant for an up­com­ing pur­chas­ing ne­go­ti­ation. An ad­di­tion­al full-text in­dex­ing func­tion enables the user to conduct an un­com­plic­ated search for freely se­lect­able keywords, which the system matches not only with the metadata, but also with all doc­u­ment con­tents.

Reg­u­lat­ing access
The size of the group as well as the diverse system land­scape with several data centres in dif­fer­ent coun­tries re­quired special at­ten­tion when im­ple­ment­ing the au­thor­isa­tion concept. Global, web-based access to the solu­tion but also pro­tec­tion against un­au­thor­ised access and strong data pro­tec­tion were main re­quire­ments for the system. Another re­quire­ment that the otris con­sult­ants im­ple­men­ted: Not only access but also the scope of au­thor­isa­tion is granted de­pend­ing on the user group. For example, only a user in a certain po­s­i­tion (e.g. lead buyer) in a certain region (e.g. Asia) has the right to edit a certain con­tract file and users in other regions have read-only access.

Con­clu­sion
The con­tract man­age­ment soft­ware otris con­tract is avail­able in all MAHLE pur­chas­ing de­part­ments world­wide. Around 1,000 em­ploy­ees use the system to main­tain the con­tract port­fo­lio and to re­search spe­cif­ic in­form­a­tion that sup­ports optimal pur­chas­ing ne­go­ti­ations. Fol­low­ing the global roll-out of otris con­tract in pur­chas­ing, the sales de­part­ment is cur­rently plan­ning to im­ple­ment the solu­tion for its busi­ness unit. “The re­sponse has been very pos­it­ive,” notes Carsten Möbus, Head of Supply Chain Col­lab­or­a­tion and Process Ex­cel­lence at MAHLE. “The users like the struc­ture and the clear layout of the soft­ware.” A system char­ac­ter­ist­ic that is of great im­port­ance for user ac­cept­ance. “Con­vert­ing MAHLE’s world­wide pur­chas­ing con­tract man­age­ment to a central system was a chal­len­ging task and could not be im­ple­men­ted overnight. Now we are at the point of be­ne­fit­ing from the changeover. The effort was worth it,” Carsten Möbus sums up.

About MAHLE.
The MAHLE Group is a leading in­ter­na­tion­al de­vel­op­ment partner and sup­pli­er to the auto­mot­ive in­dustry. The product port­fo­lio covers all im­port­ant issues along the power­train and air-con­di­tion­ing tech­no­logy – for power­trains with com­bus­tion engines as well as for elec­tro­mobil­ity. MAHLE products are in­stalled in at least every second vehicle world­wide. MAHLE com­pon­ents and systems are also used off the road – whether in sta­tion­ary ap­plic­a­tions, mobile ma­chines, ships, or on the rail­ways.

Picture credits:
The photos used (logo, banner, quote) were kindly provided by MAHLE.