HOERBIGER Maintains a Passion for Excellence in Procurement
HOERBIGER is a leading company in the compressor, engine technology and hydraulics industries. Approximately 7,000 employees achieved 1.1 billion Euros in revenue in 2014. The HOERBIGER brand stands for high performance components and systems in compressors, industrial motors and turbines, in engines for motor vehicles and for many other purposes in mechanical and systems engineering.
In order to increase efficiency in procurement, HOERBIGER wanted to automate its procurement processes and optimize communication with its suppliers. A further goal was to increase opportunities for synergy by implementing a combined category management system. HOERBIGER decided to update the company’s IT to meet new transactional and strategic requirements by introducing a customized supplier portal. As a central hub, this portal needed to map out and display all communications between HOERBIGER and its suppliers and also needed to cover all of the various aspects of procurement, from supplier registration and RFQs to purchase orders, evaluations and action point management. Ensuring data security and SAP connectivity were also key concerns for HOERBIGER. Suppliers are often sent important technical designs that contain valuable information. A tech company’s value is determined by its innovation and technical expertise, which make the protection of such information critical.
HOERBIGER first consulted other companies that were already using JAGGAER modules, inquiring about the software solution’s performance. After receiving overwhelmingly positive feedback, the company chose to work with the provider. A core issue was how to set up SAP connectivity. While Strategic Procurement gradually began working with JAGGAER’s SRM portal, Sourcing continues to work in the SAP system. It is therefore critical that the transfer and calibration of data is seamless and free of errors. Finding a solution for these demands is one of the core competencies of the specialists at JAGGAER. Their task was to guarantee that JAGGAER’s SRM portal was fully functional. Data is transferred seamlessly between the two systems and is used by the departments for further processes. In addition, the SRM portal was set up in such a way that it now functions as the central platform for communications between HOERBIGER and its clients. Suppliers can register themselves in the portal, and are then evaluated by undergoing a rigorous qualification process. They are then assigned to a specific category in the supplier pool based on the product they are offering, and can be easily contacted in the portal in the event of inquiries. Purchasers can also see which RFQs are currently being coordinated within the company at any given moment. This improves communication between colleagues, and allows for more transparent discussions about which suppliers should be included in the RFQ process in order to negotiate better prices.
The new IT tool allows all of HOERBIGER’s branches to develop and evaluate suppliers together. A stoplight function shows a supplier’s excellence rating at a glance, with ratings of excellent, very good, good, or at an escalation level. Users can benefit from
this information instantly, which guarantees that high performance partners are given a preferred status when it comes to awarding commissions. Furthermore, HOERBIGER will soon be able to evaluate how often A-parts are requested, and can easily search for and view previous offers. Central data storage saves the company both time and money.
Goals Reached with JAGGAER
- Guaranteed connection between SAP and SRM portal
- Combined category management from all departments create synergy effect
- SRM: registration, evaluation and qualification of suppliers in the portal
- Interdepartmental supplier rating and qualification
- Data security during RFQ process and automated non-disclosure agreement
Data security is a top priority for HOERBIGER. With JAGGAER, HOERBIGER users can save all of their data in the cloud where it can be accessed by all involved parties. This data often consists of technical construction designs that contain the company’s expert know-how and must therefore be protected from unauthorized use. To protect this information, the system automatically deletes technical designs and instructions 30 days after the RFQ deadline, leaving only the raw data supplier communication attachments available online. In the SRM portal, users can also confirm that suppliers have submitted a secrecy agreement. Suppliers can confirm the non- disclosure agreement by checking a box. If the NDA is not confirmed, the RFQ process will not continue. This allows HEORBIGER to adhere to their internal compliance regulations.
In July 2015, the first rollout of the SRM portals began in two pilot factories. Employees were then trained to use the new processes in best practice workshops before the rollout in all of the other European and U.S. factories at the end of the same year. At the end of the project, HOERBIGER directs processes and communication with more than 2,000 suppliers using JAGGAER’s SRM Portal.