"We now use simple system to buy not only the piece of paper, but also the pens, the chair and everything else the employee needs, right down to the grinding wheel, the cutter knife or the gloves in the workshop," says Al-Sahwi.
The Kassel-based specialist for process gas cooling systems Schmidtsche Schack uses the e-procurement platform from simple system to show why e-procurement needs an ERP connection.
What do a welding robot and indirect purchasing have in common? They are examples of various digitalization programmes at Schmidtsche Schack, a Kassel-based manufacturer of process heat transfer solutions and part of the Arvos Group. Around 280 people are employed at the headquarters. Not only is the administration based there, but the production workshop is also located here. In both areas, a large number of orders are placed each year, whether for C-parts for production or materials for indirect purchasing. This used to be a time-consuming and costly process using paper-based orders, which entailed a long administrative effort due to checks and approvals. Rauad Al-Sahwi, Director Supply Chain Management at Schmidtsche Schack, got the ball rolling to finally optimize the processes with a digital solution.
The right connection
The main objective was to connect simple system and the established ERP system SAP so that the entire ordering process could be carried out via a single user interface in future without having to switch systems. This is made possible with the cockpit connection from simple system.
We now use simple system to buy not only the piece of paper, but also the pens, the chair and everything else the employee needs, right down to the grinding wheel, the cutter knife or the gloves in the workshop," says Al-Sahwi.
There, he can access the catalogs assigned to him and search for the right grinding wheels using a search term. The system then shows him one or more items from which he can choose. The required quantity is then added to the shopping cart. Thanks to predefined rules, the customer can now only select a delivery address specified for them. As soon as the shopping cart is sent, the supervisor is informed that the shopping cart is ready for approval and can approve or reject it with a click of the mouse. If approved, an overview of the order with all the necessary information is then transferred to the SAP system. The next step is the delivery. Here too, information such as the invoice is transferred digitally and automatically compared and assigned to the order number. Al-Sahwi estimates a total time saving of 30 minutes per order.
If an employee needs new grinding wheels, they simply log in via the user interface of the e-procurement solution, explains Andre Vieth, Strategic Buyer at Schmidtsche Schack.
Independent purchasing instead of maverick buying
Another major advantage for the company is the definition of different user groups, for each of which tailored shopping basket limits and authorizations can be specified. This prevents individual paper orders for a few euros, for example. This creates trust in the processes and the employees. In this way, departments other than purchasing are also authorized to execute orders directly within their set limits if required. Schmidtsche Schack is constantly optimizing these authorizations so that processes can be further automated. This not only reduces process costs, but also creates transparency.
Convincing users with intuitive interfaces
However, employee involvement and feedback was also crucial at the beginning. For this reason, the system was initially rolled out on a smaller scale directly in the purchasing department and later extended to the specialist departments. They appreciated the fact that they now had a solution that allowed them to carry out their ordering processes quickly and efficiently - real added value in their day-to-day work, rather than pointless digitalization.
Much more exciting was the next step of connecting the area that dominates in terms of costs and volume: production. The initial skepticism as to whether the system would be equally well received by the so-called "blue collar" workers proved to be unfounded. The user-friendly interface of the e-procurement solution, which is familiar from everyday online shopping, benefited the factory workers, who were otherwise less involved in digital processes.
The method of adding items to the shopping cart is not revolutionary, but a familiar, tried and tested solution. In this sense, acceptance also increased, says Vieth.
As the process is not rocket science, the staff were quickly converted to the new system. They were also trained with documentation on how to use the system. The next step is to connect the Düsseldorf site to the e-procurement platform.
Of welding robots and digital natives
However, the digitalization of procurement is not the only digitalization project at Schmidtsche Schack. The company wants to become paperless in the future. The Kassel-based company has already taken a first step in this direction by converting the purchase requisitions (BANF), which were previously still partly paper-based, to a fully electronic process. Another aim is to digitize tenders, i.e. to enter the field of e-auctions. In order to actively drive these projects forward, the company has created the position of Digital Officer within IT.
With regard to the future and the next generation, companies also benefit from positioning themselves in a digital and modern way. This is because the next generation, often referred to as "digital natives" because they are already growing up with digital tools, are attracted by modern equipment and digital solutions.
This also includes the latest technology on the shop floor. This is because manufacturing, like many trades, is suffering from a shortage of skilled workers and a low number of young talents interested in an apprenticeship. At Schmidtsche Schack, we are somewhat more relaxed about the challenges posed by the shortage of skilled workers, with five apprenticeships in the industrial sector being filled each year. How is that possible?
One reason could be the digitization efforts, which have an impact on the company's attractiveness to young talent. Although there is still a need for people who enjoy traditional craftsmanship, with electrodes in their hands and a career as a welder ahead of them, Al-Sahwi sees an interesting development towards digitalization. For example, a welding robot has already been introduced that can take over work but has to be programmed by employees. This requires additional training for the welders.
For employees, it is a positive argument that traditional craftsmanship is being combined with digital tools. We are also driven by the digital footprint. We have huge potential in this area and we are still a long way from where we want to be, says Al-Sahwi.
Apprentices also benefit for their future careers if they are introduced to digital tools as early as possible.
