Internationales Bodensee-Forumfür Einkauf und Materialwirtschaft

Professionelles Spend Management –

Wertbeitrag des Einkaufs zur Profitabilität

Marco Schlimpert

Vice President Operations Europe & Americas

Leading Fiber Innovation

Lenzing Group

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The Lenzing Group 2014

Sales: EUR 1,864.2 mn (2013: 1,908.9 mn)

Export share: 92.3% (2013: 90.8%)

Fiber sales volumes: 960.000 tons (2013: 890,000 tons)

Staff: 6.356 (2013: 6,675)

Listed at Vienna Stock Exchange, Prime Market (ATX)

Major shareholders:

B&C Privatstiftung >50%

Oberbank AG >5%

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Our core market:Man-made cellulose fibers

Produced from the raw material wood

Halfway position between natural and chemical fibers

Natural wearing properties of natural fibers combined with the advantages ofsynthetical fibers such as purity and consistent quality

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Global network for our customers1)

1) as at 31/12/20132) air-dried

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362

238

112

154

Production (42%)

Non Production (27%)

RM/Technical Parts (13%)

Equipment & Construction (18%)

Purchasing volume Lenzing Group 2013: € 866 mio. (w/o pulp and wood)

Global Purchasing centralizes allpurchasing activities (w/o pulp and wood)

values in mio. €

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Situation 2012

Source: Investor Presentation FY 2012, page 33 , www.lenzing.com

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Situation 2012

Plant specific material master data management

No uniform commodity keys, material description and part numbers

Approx 30% of spend w/o part numbers („non-stock“ items)

4 different SAP templates

Approx 150k different order positions and 7.000 suppliers

80% of purchasing volume with top 300 part numbers

20% of purchasing volume not on the „radar“

Time consuming spend analysis (spend cube) on an annual basis

Insufficient overview of degree of „maverick buying“

Time consuming reporting and price controlling

Difficult planning and prioritizing of purchasing initiatives

Low trust and credibility due to lack of facts and figures

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Early Involvement of Purchasing inthe Procurement Process

Source: Studie BME-Benchmark 2012

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Administrator or strategic function?Yesterday Tomorrow Three main factors

Value instead ofprice

- cost management- value management for

internal customers

Networking- organisation- process- skills

Creator instead ofadministrator

- supplier management- local and global

sourcing- innovation

management

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2

3

CompetenceCenter

Supplier networkmanagement

Creation of value

Cost managerCompetent partner

Tough negotiatorPerfect administrator

„Somebody with your negotiation stylewould perfectly fit into our purchasing

department “

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High visibility adds value to the company

Controlling of spend on a monthly basis

Identifying areas for improvement („quick wins“) Identifying and implementing new savings potentials („commodity

strategies“) Improve compliance in purchasing (trust is good, controlling is necessary) Starting point for improving master data in SAP

Creating transparency

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How does it work?

TSV

Classified &enriched data

Unstructuredmulitlingual data

Standardontology Customer specific

ontology

Automated classification &attribute extraction

SEMANTICENGINE

SEMANTICENGINE

Classification: quality & flexibility

ready to use both standard as wellas customized ontology

flexible and full customizable high detail level (+15k categories) high precision (min 95%)

Operation: high performance real time analysis on demand maximum drill down detail high data volume fully automated process easy to use

Project: no invading approach no impact on legacy systems only few weeks of implementation customer orientation: high flexibility

during project

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Total Spend Analysis

SemanticClassification

SupplierAnalysis

Brand Analysis

StandardReports

Customizedreports

KPIs Tracking

AutomaticDatarefresh

ERPs

…

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Display item details

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Brand analysis

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Supplier Analysis

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Easy to create specific analysis…

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…and fast results

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Create and save individual reports

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Case Study: RM/Technical PartsStandard Fasteners – RFQ Scope Austrian Sites

Target: Clarify comparability, bundle spend to 2-3 partners (2013: 27 suppliers)

0

100

200

300

400

500

Mat.Nr. Non Stock

433

145

230

98

K€

PV 2013 Best Prices

Screws Nuts Shims

Rivets Lock ring Others

PV 2013: 653 k€

Offered scope: 578 k€

Potential savings: 250 k€

- 47%

- 32%

Source: Creactives, TSV

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Purchasing Roadmap 2013 - 2014EfficiencyTransparency Effectivity

Commodity Key Spend Analysis SAP Purchase to payprocess

PurchasingInitiative

Management

Organisation

Uniform keyworldwide

Special tool foranalyzing SAP

data

Using standardfeatures in SAP

Using state ofthe art e-

procurementsolution

Special tool totrack purchasing

initiatives

StreamliningOrganisation

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Situation 2013:

Source: Investor Presentation FY 2013 page 24, www.lenzing.com

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Situation 2014:

Source: Investor Presentation FY 2013 page 24, www.lenzing.com

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Lessons learned Spend visibility in purchasing is the starting point of 7 Steps of Sourcing

Spend visibility helps to get early involvement

Early involvement of demanding department helps buy-in during theprojects

Commodity strategies can be developed together with the demandingdepartments based on hard facts and figures

Structured approach of the projects increases recognition of purchasing

Purchasers need to get used to using new IT tools

Implementation is fast, taking advantage of TSV takes time

Training, training, training

Beginning of the long journey of master data management

No fancy graphics, but quick facts and figures

As CPO be a role model and use TSV actively

Thank you for your attention!